Apple Fights for Your Privacy Rights

Written By Geoffrey Pike

Posted February 19, 2016

Apple is currently in a fight with a California court over its customers’ privacy. It is quickly becoming a classic debate between those who favor more government power to achieve greater security against those who favor privacy.

Apple is basically invoking the quote attributed to Ben Franklin that those who would trade liberty for safety will get neither. While giving up customer privacy could potentially help the government catch more criminals, it also has the potential of giving criminals more access to people’s data. In addition, it has the potential of giving the government more power for possible abuse and corruption.

The case at hand revolves around the San Bernardino shootings, which perhaps makes this privacy issue even more contentious because it involves a high-profile case.

One of the shooters had an iPhone that the FBI is now trying to hack in order to obtain data. The data in question obviously wouldn’t solve the case, as it is believed that all of the shooters have already been identified. The information might be valuable in determining a motive and any other possible information on whether anyone else knew about it.

The problem for the FBI is that the data on the iPhone is encrypted and can’t be accessed. The current operating system creates a delay every time a password is entered incorrectly. If there are 10 incorrect password attempts in a row, then the encryption key is deleted and the data stored on the iPhone essentially becomes inaccessible forever.

The court wants Apple to develop a way to force a password hack to “unlock” the iPhone. This would require a change in the operating system and would essentially be a permanent backdoor for access to anyone’s iPhone data.

The problem is that this would make customers vulnerable to having their data hacked. So it isn’t just a matter of Apple helping or not helping the authorities with this particular case. In order to help with this one case, it would involve compromising everyone’s privacy.

Tim Cook Stands Up

I have to admit that I have not been all that impressed with Tim Cook as the Apple CEO up until now. He has had some difficult shoes to fill after Steve Jobs.

In this case, Tim Cook has taken a strong stand against the courts on behalf of his customers.

It makes sense that a CEO would go to bat on behalf of his customers. But we know in reality that many company leaders have no problem simply obeying any government edicts at the expense of their customers. In most cases involving a big company, the company will likely side with sacrificing customer privacy, even just to get special favors from the government.

Also consider that the government can issue fines and even jail time to companies that don’t cooperate.

I have to say that I was pleasantly surprised by Tim Cook’s boldness. He issued a statement that said, “The FBI wants us to make a new version of the iPhone operating system, circumventing several important security features, and install it on an iPhone recovered during the investigation.”

Cook continued, “In the wrong hands, this software — which does not exist today — would have the potential to unlock any iPhone in someone’s physical possession. The FBI may use different words to describe this tool, but make no mistake: Building a version of iOS that bypasses security in this way would undeniably create a backdoor.”

Cook goes on to state that changing the operating system with a bypass mechanism would allow the encryption to be defeated by someone with the knowledge to do so. He also says that the government is wrong in saying that this tool could only be used one time per phone.

We don’t know where this case will go from here and if Apple will ultimately capitulate, but it is nice to hear a major company’s CEO standing up for his customers, especially when it involves a case where emotions are still running high.

There is No Monopoly

Back in 2000, the Clinton administration went after Microsoft due to its supposed monopoly powers. The “Justice Department” claimed that Microsoft was keeping out competition by bundling Internet Explorer with its operating system.

At that time, Microsoft was basically the only game in town. Still today, Microsoft Windows is used in most offices across the country.

Perhaps the Clinton administration went after Microsoft because the lobbyists and special interests were not forking over enough money. It is hard to believe, given how entrenched Bill Gates is with the establishment now. Maybe he learned his lesson from not paying enough attention to the politicians and bureaucrats prior to 2000.

Regardless of the motivations by government officials, the lawsuit didn’t do much to Microsoft other than cost it some money and headaches.

Meanwhile, over the last 15 years, Apple has proven that there is no point in worrying over a supposed monopoly, unless it is a government-granted monopoly. While Microsoft still dominates in many ways, it has lost significant market share to Apple. I can confirm this as I type in Microsoft Word using an Apple computer.

Customers have choices in this world. They are voting every day by spending or not spending their dollars. When a company has a large market share, it has an advantage as far as customer trust and customer familiarity with the products. But if a company doesn’t keeping innovating and offering great service, the goodwill won’t last long.

Take Microsoft’s Windows 8 as an example. It was a disaster. Most companies refused to switch to that version due to the steep learning curve for employees. Microsoft will likely survive that mistake, but if it releases another disaster in the future, you may see competitors come in quickly and take those dissatisfied customers.

So Tim Cook taking a stand against court orders is a business move. He is not doing it to sound tough or to be uncooperative with authorities. He is doing it because some customers care about privacy, and he is trying to show that Apple cares about its customers.

Satisfying Consumers

Recently, my family found an iPhone in our front yard. We did not know who lost it. I was going to call one of the contact numbers to locate the person, but the phone was password protected, so I couldn’t do a thing with it.

It ended well because we found out our neighbor had lost it. But I can imagine it doesn’t end well in a lot of cases.

This is a consideration on whether to password protect your phone. Are you more likely to get it stolen or to lose it? And if someone finds it, are they more likely to contact you or steal information off of your phone?

It really is up to each individual to decide. But privacy is an important element to many customers, and Apple is acknowledging this. This isn’t just an issue of privacy versus security but an issue of consumer choice. Most people don’t want privacy because they are going to do bad things but because it is part of human nature.

Apple now has a dominant role in many technology sectors including computers, smartphones, and tablets. But as expected, many competitors have imitated Apple’s products in various ways and taken market share.

In a relatively free market, no company is immune to losing customers, no matter how big. Apple will have to keep innovating and meeting customer needs in order to remain successful. Obviously Apple is noting that privacy is highly desirable to a certain segment of its customer base.

And like any company, Apple is not just vulnerable to competition from its current competitors, but also vulnerable to replacement technology.

Cell phones took the place of home phone lines for many people. Smartphones have replaced most basic cell phones. What will replace smartphones? Companies are already planning how to knock off the iPhone.

Ultimately, it is up to the innovators to develop and enhance products, and it is the customers who will determine what sells and what doesn’t. There is no monopoly on customer satisfaction.

Until next time,

Geoffrey Pike for Wealth Daily

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