American Tech Companies Are Getting Ripped Off Overseas

May 10, 2023

What Is Government Doing to Protect American Tech Companies in Foreign Places?

American tech companies are actively expanding into global markets to both grow their customer bases and access new pools of talent. However, this international reach also exposes them to new threats to safety and security. For instance, foreign threat actors including governments regularly target American data and intellectual property.

A security breach can cost a business in numerous ways. Lost data impacts its ability to continue operations. What’s more, criminals may sell an organization’s confidential information or commit blackmail. There’s also the threat of fines for failure to protect sensitive information.

The Government’s Role in Protecting American Tech Companies

Fraud protection and data security are the responsibility of American tech companies and the government. The U.S. government has taken some steps to protect businesses from foreign influence. For instance, the Committee on Foreign Investment in the United States (CFIUS) reviews foreign investments in U.S. companies—and their national security implications.

But is this enough? China has been accused of acquiring American tech companies to steal technology and overtake America as a tech innovator. Russia actively fights against American interests. Foreign countries may also use stolen tech to spy on U.S. citizens.

As innovation becomes more critical to the economy, there’s growing pressure for the American government to do more to protect the nation’s tech firms. Otherwise, we risk the collapse of a company’s—or even the country’s—infrastructure.

Technology fuels everything from businesses and personal activities to military applications. It’s so widespread that people take it for granted. But the United States can’t afford serious losses to its IT sector; finance, health, and transportation rely on secure data. Reinforced policies are necessary.

American flag microchip

Source: Shutterstock

The Threat of Data Theft to American Tech Companies

As data becomes a more valuable commodity, it’s attracting the attention of criminals. Thieves who make off with business data can sell it on the black market or exploit it for themselves. For instance, hackers can drain bank accounts using stored credentials or threaten to expose customers’ private information to the public.

American tech companies are particularly susceptible to threats because they rank among the most innovative on the planet. Criminals plot against these organizations for economic and political gain. They can steal data from company servers or from American employees working overseas.

Now that people and resources depend heavily on information, the government must defend it.

The Cost of Data Theft

Companies should know the risks of doing business overseas. For one thing, they’re vulnerable to data breaches, ransomware, and other attacks. Financial losses can add up to millions of dollars for a single occurrence. But the loss of reputation and customers can be even more severe.

And in the aggregate, it’s not just about individual companies—they’re also putting the country at risk. American security depends on tech leadership. The defense and finance of the nation are now tied to its technology.

Tech enlarges the size of an attack—a single exploit can affect thousands of organizations. What’s more, practically everyone is now exposed to data in the cloud. Medical and financial data are especially vulnerable to hacks. And it’s not just outright theft that’s a risk, but also the acquisition of sensitive data through corporate mergers and joint ventures.

For example, foreign companies may offer several times the market value to acquire American companies. That should raise suspicions. These companies may have close ties to their governments and may be purchasing American companies for their data and trade secrets.

How to Improve Current Policies

The U.S. government can improve its defense of American tech companies by increasing its oversight of international mergers. After all, takeovers risk putting unique tech in enemy hands. And it’s not just military technology that’s sensitive; medical technology also exposes U.S. lives to threats and should have stronger oversight.

Oversight should focus on a combination of risks: corporate takeovers, exports of sensitive technology, overseas operations, and security policies for data stored in international cloud facilities. A new federal agency specifically dedicated to this task would make sense.

Often enough, the U.S. government responds to threats only after tech companies report them. The government should instead anticipate security risks more actively and collaborate more closely with the private sector.

At the same time, U.S. government intervention has already slowed down some investment in American tech companies. Therefore, policies must strike a balance in which they protect businesses against overseas threats without unduly interfering in the market.

America Needs Firm Policies in Place

The U.S. intelligence community has recently started advising American tech companies on emerging technologies to protect. This information should be more widespread and updated as new advances unfold. For instance, artificial intelligence (AI) and other developments may overturn the world order. If America wants to remain ahead, policies must recognize which technologies and companies need defense.

The Chinese and Russian governments are employing all means at their disposal — including illegal measures — to gain a strategic advantage. They’re willing to hack into U.S. companies and place insiders to access data.

As a result, America and its tech companies must understand the situation as a potential conflict and enact policies appropriate to this level of implications. Foreign governments are attempting to usurp America’s technology lead. Only firm policies will staunch the loss of data and security.

The foreign powers threatening U.S. technology companies are run by dictators who don’t share American values. Therefore, the United States should enforce strict requirements on proposed mergers and joint ventures. It should also spend resources securing data on particularly important innovations. Finally, violations of American data security must be found and punished.

Russian microchip

Source: Shutterstock

Protecting American Tech Companies

While there’s plenty of opportunity for American tech companies doing business internationally, there are also plenty of risks. Data breaches have become more common and larger in size. Foreign attackers are working to undermine the safety and security of U.S. data—and the American public.

Government protections have only gone so far. More resources geared toward modern security threats and greater public-private cooperation will help protect American technology and data. Innovation will continue as policies improve. In the meantime, tech companies and the people who rely on their products and services must remain alert.

American tech companies like Approyo are working to improve data security internationally. For instance, Approyo’s Overwatch monitors IT infrastructure for clients globally, 24/7/365. Contact us today to see how we can help secure your business.

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