US cloud service providers could suffer loss of business following the revelations about the US National Security Agency's Prism surveillance system.
European Commission vice president Neelie Kroes told the Guardian European businesses are likely to abandon US service providers if clients fear the security of their material is under threat.
“If businesses or governments think they might be spied on, they will have less reason to trust cloud, and it will be cloud providers who ultimately miss out."
"If European cloud customers cannot trust the United States Government, then maybe they won't trust US cloud providers either. If I am right, there are multi-billion euro consequences for American companies.
"If I were an American cloud provider, I would be quite frustrated with my government right now.”
News International CISO Amar Singh said data would always be vulnerable if it were unecrypted.
“Regardless of where you are - you could be anywhere on the planet - if you don't want anyone to look at your data and you don't encrypt it, you have no assurance it is safe from prying eyes.