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A view of some of the servers at a Google data storage facility in California. Under pressure from Google and other tech giants, U.S. President Barack Obama is moving to curtail the NSA’s mass data sweeps.Connie Zhou

Facing unprecedented criticism from the technology industry whose members once ranked among his biggest corporate supporters, U.S. President Barack Obama will order the National Security Agency to greatly limit its bulk collection of digital data.

The White House is poised to ask Congress to end the NSA practice of collecting millions of records known as "metadata." Broadly, the term refers to information about information – for example, metadata collected by the NSA includes records of phone calls made between different phone numbers, allowing the agency to learn significant clues about the call, even if it doesn't hear the contents of the call itself.

On Tuesday, Mr. Obama publicly endorsed an overhaul developed by Justice Department and intelligence officials

"I'm confident that it allows us to do what is necessary in order to deal with the dangers of a terrorist attack, but does so in a way that addresses some of the concerns that people had raised," he said at a news conference in the Netherlands.

Although it appears to focus specifically on phone records in the possession of telecom companies, the decision to limit such bulk collection, first reported by The New York Times, is in many ways a direct result of the myriad secret documents describing the previously unpublicized extent of NSA digital spying. Former NSA contractor Edward Snowden has leaked many of those documents over the past year and has stated that many more are yet to come.

"I think this is a milestone," said Jameel Jaffer, an attorney with the American Civil Liberties Union. "Since the disclosures started in the summer of last year, there has been this very active public debate about these sort of issues, but until now there hasn't been a major policy shift relating to any of the government's most significant surveillance programs."

But Mr. Obama's policy shift was also undoubtedly influenced by the outcry from many of the world's biggest technology companies. As a result of the Snowden leaks, companies such as Google, Microsoft and Facebook have scrambled to reassure their customers that their data is safe. Should those reassurances not work, many customers will likely walk away, opting instead for competitors that are based in Canada or elsewhere around the globe – and in the process, costing Google and others billions in lost revenue.

"There is a great concern since news broke a year ago about the NSA probing data," said Kevin Liang, co-founder of Canadian Web Hosting, a Vancouver-based company. "A major point with companies from the U.S coming on board … is that the data needs to reside in Canada."

Mr. Liang said Canadian businesses once made up about 90 per cent of his customers. Today, almost a third are American companies.

"We've had insurance companies from California come and do a walk-through of our data centres."

It is precisely that exodus that has executives at the biggest American technology companies deeply concerned. Last week, Google chairman Eric Schmidt, Facebook CEO Mark Zuckerberg and other technology industry leaders met with Mr. Obama, where they continued to press for digital-surveillance reform.

Revelations that the NSA has effectively been hacking into corporate servers has resulted in public-relations insults and financial injuries for many of Silicon Valley's biggest names. Not only do the companies now risk losing major clients, they have also seen a resurgence of consumer concern over privacy issues, and a subsequent rise in criticism of the privacy practices of firms such as Facebook, whose business model relies on users sharing as much information as possible.

"To me it's almost as though the fox had raided the chicken coop and is now upset that another fox is stealing the chickens he stole," said Mark Weinstein, CEO of Sgrouples, a privacy-focused social network. "The government has inadvertently shown us how much companies are spying on us."

Through an industry group called the Reform Government Surveillance Coalition, nine of the world's biggest technology companies, including Apple, Microsoft, Yahoo and Twitter, applauded Mr. Obama's move.

"We will continue working with both Congress and the administration to advance meaningful legislative reform as set forth in our principles," the firms said. "Specifically we support reform that prohibits bulk data collection of Internet communications, promotes transparency, avoids conflicting international laws and respects the free flow of information globally."

But as consumers and corporations await the details of Mr. Obama's proposal, the prospect of more Snowden leaks and an increasingly public debate on digital privacy suggests that the President's measures may not do enough to put the issue of digital snooping to rest.

"The question is, as human beings, as free people in democracy, are we willing to give away our privacy?" said Mr. Weinstein. "And as you're starting to see now, the answer is absolutely not."

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