Multinational Companies Blacklisting Australia Over Anti-Encryption Laws

The damage caused by Australia’s anti-encryption laws is by no means domestic. Companies are reportedly blacklisting the country as well.

Earlier this month, we brought you reports of a mass innovation and investment exodus happening in the country. It’s all in response to Australia’s anti-encryption laws.

While this shows what is happening with companies already operating within the country, there isn’t much being said about companies operating outside of the country contemplating on sinking investment dollars. That is, until now. In a submission to the Australian government, cloud computing company, Vault, is offering more details on what corporate response has been outside of the country. From The Sydney Morning Herald:

In its submission to a parliamentary committee review of the 2018 laws, Vault Cloud said companies had chosen not to set up operations in Australia after the laws were passed.

“We have seen multinationals ‘blacklist’ Australia as a place to store data and, in some cases, that same company continues operations in China and Russia,” Vault Cloud’s chief executive Rupert Taylor-Price said.

The paucity of local operators means Australian companies are often forced to use overseas IT infrastructure.

“The impact for Australians is that their personal and sensitive data becomes less and less sovereign,” Mr Taylor-Price told The Herald and The Age. “That isn’t the intention of the law, but it is the unintended consequence.”

In its cyber security guidelines, the government warns that “outsourced information technology or cloud services located offshore may be subject to lawful and covert collection, without an organisation’s knowledge,” including by foreign powers.

The news is an interesting followup to an earlier report which says that these laws were developed with little consultation. According to a Freedom of Information request, the Australian government reportedly did not even bother asking tech companies for input on the anti-encryption laws. From ABC:

Telecommunication providers such as Telstra, Optus, Vodafone and Vocus are also named.

But no brands from Australia’s IT sector appear among the dozens of pages released so far, further fuelling industry complaints that the impact of the laws on local industry was not adequately considered as the bill was developed.

Among other things, the laws give authorities power to compel a company to create a new technical way to access encrypted communications — a text message sent in the WhatsApp messaging service, for example.

During a committee inquiry into the legislation in November 2018, Francis Galbally, chairman of Australian encryption provider Senetas, suggested companies like his own would be unable to prove to customers they had not made a product modification to help a government agency.

“The bill, should it become law, will profoundly undermine the reputations of Australian software developers and hardware manufacturers in international markets,” he said at the time.

Regardless, the damage caused by Australia’s anti-encryption laws will continue to ripple across the economy. With no sign of the government backing down after using the law to crack down on journalism, it seems things will only get worse from here.

Drew Wilson on Twitter: @icecube85 and Facebook.

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