This is how the fear of government snooping takes its toll on tech companies

Two very different technology offerings were dropped because of fears that the US and China might be trying to spy on the customers using them.

In Baltimore, Maryland—just down the road from the headquarters of the National Security Agency in Ft. Meade—a US company called CyberPoint International lost a contract to provide a videoconferencing system to the federal government after US Customs determined that CyberPoint’s offering was in fact Chinese, substantially made by telecom equipment maker ZTE. A US House Intelligence panel has recommended that government agencies and contractors should avoid using equipment made by ZTE and its larger Chinese counterpart Huawei, because of fears that they might have ties to the Chinese military that could compromise the security of federal computer networks. ZTE and Huawei have strenuously denied the claims.

China is already planning to probe EMC, IBM, and Oracle over “security issues,” according to the state-run Shanghai Securities News. Trade groups have projected that the NSA hacking could end up costing US technology firms billions in lost sales if their foreign clients suspect that the NSA will have surreptitious access to their systems. The allegations against ZTE and Huawei have not been backed up with any evidence that their products have any intentional vulnerabilities that hackers from China or elsewhere could exploit. But it is becoming very clear why American intelligence officials, knowing what their own spy agency has been up to, are so worried about China doing the same thing.