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Qualcomm CEO says NSA surveillance affecting business in China

Paul Jacobs says the company is seeing increased scrutiny from foreign business partners

Sure, the fallout from the NSA surveillance scandal has impacted American consumers’ impressions of major technology companies. But have those negative feelings also extended abroad? According to one major technology CEO, the spy scandal has affected business abroad as well as on the homefront.

Qualcomm Inc. CEO Paul Jacobs recently told The Wall Street Journal (WSJ) that the NSA fallout has clearly impacted the company’s business in China. While Jacobs did not explicitly say that the scandal has impacted business, he did say the company is seeing increased scrutiny from foreign business partners.

“We are definitely seeing increased pressure,” Jacobs told the WSJ. “All U.S. tech companies are seeing pressure.” He also added that in dealing with foreign business associates, “[You] have to be very cautious,” he said. “We are always very careful with whatever steps we take. How we sell. How we interact.”

Many CEOs from technology companies have spoken out against the NSA spy scandal, with Facebook CEO Mark Zuckerberg recently saying that the U.S. government “blew it” with its surveillance tactics. Meanwhile, Google GC David Drummond said, “We have long been concerned about the possibility of this kind of snooping, which is why we have continued to extend encryption across more and more Google services and links.”

According to Jacobs, this public perception has led to a “very delicate balancing act that goes on” when conducting dealings abroad. “There's no question there is an impact.”

But this isn’t a fight that Jacobs believes he can lose. China is important to Qualcomm’s business model; the company generated $1 billion in revenue from the growing market during the fiscal year that ended Sept. 29. And despite the NSA spying and some IP troubles in the U.S., Jacobs believes that the company is still on solid footing in the Asian country. He said Qualcomm “can gain significant share of the China market” and expects to see continued growth.

“Hopefully in short, medium and long term that things will move forward with the way that they have and with the market really driving things,” he said. 

For more on the impact of U.S. government surveillance, check out these InsideCounsel stories:

Facebook CEO says government “blew it” with surveillance tactics

6 notable GCs in the news

Proposed Brazilian action hopes to deter NSA spying

5th Circuit ruling drops restriction on wiretap authorizations

EU panel approves new rules to outlaw NSA surveillance practices


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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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