Apple is in the spotlight for having kicked off a battle against the Federal Bureau of Investigation (FBI), after the FBI demanded that Apple unlock the encrypted iPhone belonging to San Bernardino, California shooter Syed Rizwan Farook. An encrypted iPhone means that nobody is supposed to be able to have access to the data on the device – including contacts, photos, emails etc. – unless the passcode is entered. The FBI is using a 227-year-old law, the All Writs Act of 1789, as legal justification for its request. By refusing the FBI’s demand that it make available a backdoor to get around its encryption, Apple’s CEO Tim Cook picked up the torch for privacy rights. Tech industry executives and privacy advocates rallied behind him; and the U.N. High Commissioner for Human Rights, Zeid Ra’ad Al Hussein, declared that Apple should be supported for acting as a beacon for privacy and freedom of expression. The case then escalated further as the FBI’s parent agency, the US Justice Department, considered whether to bring a court case against the encryption used by Facebook’s WhatsApp – the world’s largest mobile messaging service.
Is the tech industry’s stand a crusade based on political principle – a relinquishment of commercial self-interest by companies that are fired with public purpose? How may we untangle the economic and political elements that are being expressed in this legal drama?
Market-Driven Privacy Right
“At Apple, your trust means everything to us,” proclaims the company in its privacy statement. By showcasing that its products are secure from government’s hands, Apple has all but stolen the motto of one of its foremost rivals: “Don’t Be Evil.” And in fact, through the FBI case, Tim Cook is attempting to differentiate Apple’s business model from that of Google and other competitors. On several occasions, Cook has reiterated that “our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers.” While he didn’t name-check Google, his statement was unmistakably aimed at the king of search, whose business is to sell ads predicated on user data.
Google, for its part, requires full encryption for Android phones and promotes end-to-end encryption in Gmail, ads platforms and other products; and Google also retains access to copious quantities of user data to exploit for its profit making. Vint Cerf, Google’s Chief Internet Evangelist, confessed that:
We couldn’t run our system if everything in it were encrypted because then we wouldn’t know which ads to show you. So this is a system that was designed around a particular business model.
Yet Google, like Microsoft and several other big tech companies, had little choice after Apple took on the FBI but to join Apple’s side. Though they are exposed, because the rely so heavily on user data, the risk of appearing to be a stooge of the US government was too great.
Cook tries to emphasize that, because Apple generates a majority of its profits by selling devices, not selling ads like Google, its economic interests align the company with privacy rights. This is, however, a convenient fiction. Apple not only collects lots of personal data through its App Store, but also has acquired Twitter’s fire hose of tweets to gain commercial access to particular types of behavior- and language data. Apple also has experimented with building its own ad-based businesses, attempting to figure out ways to tap into the gigantic and lucrative ads market. It was only after a five-year effort to monetize apps and challenge Google on the mobile ads front that Apple abandoned this business.
This said, it is in Apple’s commercial self-interest to proclaim its support for privacy rights. In 2014, Apple generated more than $130 billion from the sale of its iPhones and iPads, compared to $11.8 billion for Google’s mobile search revenue during the same year. In light of this, Apple’s strategy was refocused. For both offensive and defensive purposes, it began to promote ads-blocking apps on its devices. Well before the current face-off, in other words, Apple began to sell privacy as a marketing feature – exactly as the US Government has recently charged. Privacy is a business strategy rather than a political principle.
That Apple is not in fact acceding to principle is evident from developments touching a different corner of its global business. At the same time that it is loudly challenging the US government, Apple is willing to dance around to please the Chinese state by agreeing to comply with government security checks on all Apple products sold in China. In 2014, after being criticized for iPhone’s national security risk by the Chinese media, likewise, Apple moved its Chinese consumer data to a Chinese facility operated by state-run China Telecom. But the Apple-FBI drama possesses ramifications that go beyond all of this.