Google and Cisco claim the US National Security Agency's (NSA) PRISM programme has not only damaged trust but could also be harmful to American businesses.
Cisco made the claim as it warned its revenue would shrink by up to ten per cent this quarter, claiming demand in China had caused a backlash against American communications firms.
Indeed, rivals Oracle, IBM and EMC were reported to be facing an official investigation by the Chinese government in August following revelations that the NSA had been carrying out wide-scale monitoring of global electronic communications.
According to an earnings results call transcribed by Seeking Alpha, Rob Lloyd, president of development and sales at Cisco, said: "This issue has caused increasingly customers to pause and [it is] another issue for them to evaluate...it's certainly causing people to stop and then rethink decisions and that is I think reflected in our results."
Meanwhile, Google's law enforcement and information security director Richard Salgado became the first representative of a major technology company to testify before the US Congress following the PRISM revelations.
Salgado said: "The current lack of transparency about the nature of government surveillance in democratic countries undermines the freedom and the trust most citizens cherish, it also has a negative impact on our economic growth and security and on the promise of an internet as a platform for openness and free expression."
Echoing comments made by Box's CEO at a recent London conference, Salgado warned the scandal could lead to the creation of a "splinter-net" by putting up internet barriers.
After the hearing, Salgado told Reuters: "You can certainly look at the reaction, both inside the United States and outside of the United States to these disclosures, to see the potential of the closing of the markets through data location requirements.
"This is a very real business issue, but it is also a very real issue for the people who are considering using the cloud and for those who currently use the cloud and may have their trust in it rocked by the disclosures."
