Liz Peek

Why Apple Really Lost Its Privacy Fight with the FBI

Liz | 03/30 at 10:40 AM

The battle between the FBI and Apple ended on Monday with “no clear winner,” according to The New York Times. Not so. The clear winner is the American people, and the clear loser is Apple.

The FBI had requested Apple’s help in unlocking a cell phone used by the San Bernardino killers—Apple refused. The Justice Department took the dispute to court, arguing that a search warrant required Apple to program a “backdoor” into Syed Farook’s password- protected iPhone5. A judge initially decided in favor of the government, but Apple appealed the ruling; the case was expected to end up at the Supreme Court.

Monday, everything changed when the FBI announced it had gained access to Farook’s phone and didn’t need Apple’s help after all. Several issues in the case remain unresolved, but for the moment, the Justice Department has the information it sought.

Related: Apple Case Exposes Ongoing Government Rift Over Encryption Policy

Apple, on the other hand, looks foolish. Now we know that their much-vaunted privacy settings are not

so private after all. By literally making a federal case out of its refusal to comply with the government, Apple CEO Tim Cook meant to show the world that his company was willing to buck the system to protect customer security. Instead, the world has learned that iPhone passwords can be hacked.  

Apple’s position was never popular. For sure, some anti-government technology nerds and civil liberty crusaders revere Cook for not knuckling under to the FBI. But the majority of Americans, according to Pew Research, supported the Justice Department. Some 51 percent of respondents surveyed in late February thought Apple should unlock the phone while 38 percent thought they should not. It may come as a shock to the wizards of Silicon Valley, but most of us are more concerned about terrorists in our midst than about our emails becoming public.  

For those of us not in the tech world, it is difficult to see why the government can subpoena your telephone records and letters, but not your emails. If one form of communication is open to scrutiny, why not all forms? If you commit a crime, and the feds are entitled to search your office, why should they not be given access to your cell phone?  

Related: Apple Fight Could Escalate With Demand for ‘Source Code’

It is true that under the Computer Fraud and Abuse Act of 1986, unauthorized access to a protected network or computer is a federal crime. In asking Apple to hack a terrorist’s phone, the government effectively asked the company to break the law. Congress needs to fix this problem going forward, but it is clear that in this case Apple would have been protected against prosecution.

 Cook’s Us-vs.-Them position appears to be nothing more than a marketing ploy. Apple is battling it out with Samsung for smart phone dominance, and the most recent figures show the Cupertino vendor slipping in global market share. 

Apple’s iPhone sales are actually expected to drop this quarter for the first time since the device was introduced nine years ago. Phones make up 68 percent of Apple’s revenues; other top products include iPads (9 percent of sales) and Macs (also 9 percent)—revenues for both products are declining.  

The dip in iPhone sales flows in part from product introduction cycles. If the company’s next device offering contains major improvements, sales will pick up. But, uncertainty about the pace of product development persists. The stock is selling about 20 percent below its 52-week high.

Related: Apple’s Encryption Battle With United States Still Alive in Brooklyn

In other words, Apple is facing a mid-life crisis. In the past few years, troubling surveys have shown Apple in danger of becoming less “cool.” Some customers see the company as following Samsung, in making a larger phone for instance, reversing Apple’s history of first-to-the-market innovation. Samsung has sold the idea that its phone is the more durable product, which resonates especially with young buyers. 

The absence of Steve Jobs continues to hang over the company. Tim Cook is not known as a visionary, but rather a savvy CEO who has done a good job keeping the giant company moving forward. He knows it is essential to woo Apple’s tech-happy young customers. What better way than standing up to the authorities?

In a letter to customers, Cook says the FBI asked the company to build a “backdoor” to the iPhone – something they do not have. He argues, “If the government can use the All Writs Act to make it easier to unlock your iPhone, it would have the power to reach into anyone’s device to capture their data. The government could extend this breach of privacy and demand that Apple build surveillance software to intercept your messages, access your health records or financial data, track your location, or even access your phone’s microphone or camera without your knowledge.”

Related: Apple ‘Privacy Czars’ Grapple With Internal Conflicts Over User Data

Cook’s argument will resonate with those worried about surveillance in the post-Snowden world. Interestingly, a survey last year showed few millennials to be in that camp. Some 80 percent worry “only a little” or “not at all” about online privacy; of those who are concerned, only one third are alarmed about government snooping. In contrast, Americans across the board list terrorism as one of their principle concerns. Apple, it seems, took the wrong side of the fight. 

Cook is selling Apple, and he came up short. It isn’t the first time Cook has taken a misstep in promoting the giant tech firm. In 2012, Henry Blodgett criticized Cook for ridiculing rival companies at a product launch. “These jokes are funny and aggressive, in keeping with the role Apple has played for decades – that of feisty underdog.” But, as Blodgett points out, Apple is now a feisty “overlord,” and the “digs come off as the gloating of a cocky, graceless winner instead of the admirable pluck of a small competitor.”  

In taking on the government and refusing to help in the search for terrorists, that cockiness morphed into hubris. That was a mistake.

Posted in Fiscal Times
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