National Security

U.S. says profit driving Apple’s refusal to unlock San Bernardino shooter’s phone

The Justice Department is charging that Apple’s refusal to help the FBI unlock the cell phone of San Bernardino shooter Syed Farook is about profit and not a principled stand to protect the data of all iPhone users.

In a court filing Friday, Justice Department lawyers said Apple’s objection to a court order “appears to be based on its concern for its business model and public brand marketing strategy.”

Analysts of the hotly competitive cell phone market said in interviews that Apple’s stand against the government is indeed likely to be good for business – even if the company genuinely cares about privacy.

Apple is challenging federal Magistrate Judge Sheri Pym’s order to help unlock the phone used by Farook, who along with his wife killed 14 people in a San Bernardino, California, terror attack in December.

Justice Department prosecutors asked the judge in their Friday filing to dismiss Apple’s challenge, which the company has yet to file, and order the company to immediately start assisting the FBI to open Farook’s phone.

The prosecutors also revealed that Farook’s employer, San Bernardino County, may have been responsible inadvertently for the inability to read the phone’s data. According to a footnote, county administrators, in an effort to access the phone, remotely reset the phone’s iCloud password after the attack. The change effectively severed the connection between the phone and its iCloud account, preventing further backups, the footnote said.

During a Friday appearance in Sacramento, Sen. Dianne Feinstein of California, the top Democrat on the Senate Intelligence Committee, also called on Apple CEO Tim Cook to reverse course.

“Apple is not above the laws of the United States,” Feinstein said.

Cook, in a public letter this week challenging the court order, called the implications of the government’s demand “chilling.”

He said the order would require Apple to create software to circumvent the phone’s security system, producing a key that could be used by hackers to steal data from anyone’s iPhone.

“The U.S. government has asked us for something we simply do not have, and something we consider too dangerous to create. They have asked us to build a backdoor to the iPhone,” Cook wrote.

The Justice Department prosecutors argued on Friday that Cook is mischaracterizing the government’s request. Their filing said Apple would be under no obligation to share how it unlocked the phone with the FBI or others once it had complied with the court order.

“Apple may maintain custody of the software, destroy it after its purpose under the Order has been served, refuse to disseminate it outside of Apple, and make clear to the world that it does not apply to other devices or users without lawful court orders,” the prosecutors wrote.

The Justice Department said Apple is capable of unlocking the phone and seems worried about “a perceived negative impact on its reputation and marketing strategy were it to provide the ordered assistance.”

Apple did not respond to questions about the Justice Department’s claims. The company is expected to formally tell the court by next Friday why it finds the order “unreasonably burdensome.”

“I think that Tim Cook very much personally cares about privacy,” said Alvaro Bedoya, executive director of the Center on Privacy and Technology at Georgetown University Law Center. “If you look at his language he talks about privacy in a way that few of these other tech CEOs do.”

Bedoya and other observers of the tech industry noted, though, that Apple’s refusal to help the FBI access the encrypted data also neatly aligns with the company’s current business strategy.

“They’re basically making a big push on privacy, and it benefits them financially,” Bedoya said.

Unlike Facebook and Google, which make their money from collecting data on users, Apple’s revenue comes from selling hardware. A reputation as a defender of consumer privacy might benefit that business.

Cook’s denunciation of the order came as Apple launched its smartphone-based payment system in China, where the electronic payments market is already dominated by an arm of e-commerce giant Alibaba.

“I think it’s going to be a reason for people to upgrade or move to Apple or back to Apple,” said John Feland, CEO of Argus Insights, a research company that specializes in smartphone marketing. “Especially in other markets where privacy considerations are even higher than they are in the United States, it will become a boon to Apple,” he added.

Daniel Matte, who analyzes the cell phone industry for the market research firm Canalys, said challenging the government “is a marketing advantage to them to tout their privacy and security ideals.”

But there could also be blowback against Apple for refusing to cooperate with the government in a terrorism case, he said.

“It helps them with users who appreciate their stance on data security but it also will anger a lot of people who have a different political viewpoint on the issue,” Matte said.

Feland of Argus Insights said he expected any backlash against the company to be short lived. “I think longer term it fits into their overall story of taking care of their customers,” he said. “I think it’s going to be a positive for them.”

Feland said the move could build momentum for the upcoming release of the iPhone 7.

Apple could especially benefit in the enormous China market, Feland said, where the company is in fierce competition with Xiaomi and Huawei, two Chinese cell phone manufacturers.

Feinstein, in her Friday remarks about Apple at a Public Policy Institute of California event, did not assign a motive to Apple’s refusal to cooperate with the FBI. But she said the company is wrong.

“We don’t know whether that couple were lone wolves . . . or whether they are part of some cell planted here, developing here, with more people connected,” she said. “And that’s where the iPhone comes in.”

The government has only been able to obtain incomplete backup iCloud data from Farook’s phone up until Oct. 19, a month and a half before the attack, according to the Justice Department’s court filing.

Because of the security features of Farook’s phone, data could be destroyed if the FBI tries 10 incorrect passwords.

“Rather than assist the effort to fully investigate a deadly terrorist attack by obeying this Court’s order of February 16, 2016, Apple has responded by publicly repudiating that Order,” the prosecutors wrote.

Sean Cockerham: 202-383-6016, @seancockerham