Least Favored in 2013: Featuring the year's shockers from Wall Street to Washington. Read Fed Policy shenanigans; Tech spies; SeaWorld tragedy; Caterpillar-China scandal; Bud Beer scandal; Bill Ackman's Herbalife; LIBOR rigging; Forex Scandal; and check out this video CEO Walk of Shame.
NEW YORK (TheStreet) -- The two-hour meeting Tuesday between President Obama and top tech execs, many of whom had supported his campaign, may yet prove a turning point in the history of technology.
What people like Eric Schmidt of Google (GOOG) were saying, in effect: "Mr. President, you're stealing our act."
Yahoo (YHOO), Google, Zynga, and other cloud-based companies routinely sift the data they collect on customers, building detailed dossiers of our preferences. They do this to sell us stuff, and to decide what page to show in response to a search request.
Records leaked by former National Security Agency contractor Edward Snowden indicate that agency is doing much the same thing. They're collecting everything they can, with call records as well as Internet caches, and sifting it to find potential terrorist threats.
Connecting data to people, and using it, brings us to the heart of social networking, the industry consumer cloud services have created.
What's happening in Obama's home town of Chicago is illustrative. As Governing Magazine reported in October, police there have been using social networking to learn not only who might kill, but who might be killed, and discovered they're the same people.
The controversial result is that many people, many of them juveniles, are routinely being tracked and questioned by police without having any police record. The aim is to prevent murders before they happen, and murders in Chicago this year are down by about one-fifth.
That's not the same thing as "listening to all phone calls" but to the advocates now hammering the Obama administration, it comes down to the same thing. While they're at it, these same advocates are noticing what the tech companies are doing, they're connecting the dots, and they're doing damage to the goodwill that these companies need to operate.
There has long been unease at how police use data. One of my own early "scoops" as a tech reporter involved Steve Jackson, my first editor at the Rice Thresher in 1973, who later became a big wheel in the games industry, but was nearly driven under over a game that launched his General Universal Role-Playing (GURP) engine, because he was learning, from hackers, how they did what they did.
This abuse of police power over innocent data use stimulated creation of the Electronic Frontier Foundation (EFF), a sort of ACLU for cyberspace, which has been fighting for users against government and corporate power ever since.
The NSA revelations brought the EFF's concerns about government abuse of data to the mass market. The NSA made what the EFF started a global concern, because it turns out that leaders in Brazil and Germany don't like having their private conversations recorded any more than you and I do.
Thus a backlash has begun, one that threatens not only the cloud service providers but all cloud companies, including IBM (IBM) and Hewlett-Packard (HPQ). Computing is a global market, and if customers in Europe, South America or Asia don't trust American suppliers, because they don't trust the U.S. government, then we all have a problem.
Both parties know they have to be on the same side. They share the same problem. The rest of us don't believe them. The Internet now faces a credibility gap.
At the time of publication the author owned shares of GOOG.