In a society increasingly based on computerized communications, there is concern about the privacy of such communication. Considerable resources have been devoted to encryption of messages. Because public-key encryption systems allow people who have never met to communicate with privacy, the problem of identity verification and authentication arises. When someone's published public key is used to encrypt a message, how does the sender know that it is really the other's key ? Governments favour a hierarchical identification system, preferably with themselves at the top of the hierarchy. In such a system, each layer of identification is derived from the next level of a constantly narrowing pyramid, leaving those at the top with the absolute power to abuse the system.
In the USA in 1991, through Senate Bill 266, an effort was made to force manufacturers of secure communications equipment to insert special "trap doors" in their products so that any encrypted messages could be read by government agencies. The proposal did not pass into law but other legislation has been formulated with similar objectives. The USA continues long-standing restrictions on exports of powerful encryption devices that it is unable to break. It encouraged installation of a Clipper chip that makes it relatively easy for the government to eavesdrop on encrypted communications. Governments have explored the possibility of allocating the control of encryption keys to trusted third parties, namely government approved agencies -- a process known as key escrow.
Users, especially foreign corporations, employing standard encryption technology approved by governments such as the USA must recognize that their communications could be monitored for the benefit of nationally based corporations.
If privacy is outlawed, only outlaws will have privacy. Ordinary people do not have access to the crytographic technology available to government agencies and large corporations.
Strong encryption makes surveillance of of communications practically impossible for government. Law enforcement agencies have a legitimate concern that criminals, drug dealers or terrorists may make use of unbreakable encryption codes and could not easily be restrained without special government control of such technology.