Artifact: OL 634

Artifact OL 634: Apple vs. FBI: The iPhone Controversy

Laura Inlow

Saint Mary’s University of Minnesota


Artifact OL 634: Apple vs. FBI: The iPhone Controversy

An intercultural organizational impact analysis paper entitled “Apple vs. FBI: The iPhone Controversy” demonstrates the sixth program learning outcome, evaluating the ethical and legal implications of one’s actions (“Saint Mary’s University”, 2016). The analysis, based on various news stories detailing the investigations and aftermath of the 2015 mass shooting in San Bernadino, California, details how foundational ideologies impact ethical and legal judgment, as well as a corporation’s community responsibility (“Saint Mary’s University”, 2016).

Course outcomes demonstrated include the synthesis of cultural, economic, political, and social perspectives, the analysis of different viewpoints and the articulation of the challenges experienced by global organizations (“Saint Mary’s University”, 2016).

A U.S.-based global company, Apple experienced pressure from the FBI to aid in the criminal investigation of a terrorism suspect by giving investigators backdoor access to his iPhone (New York Times, 2016). The company took the stance that forced compliance would be a violation of the right to free speech (New York Times, 2016). In the end, its refusal was about protecting the company’s triple bottom line – not only financial, but also environmental and social (Meyer and Kirby, 2012).

Apple realized that while helping the FBI might put a criminal behind bars, it might also open up vulnerabilities for hackers to violate other customers’ private information. It would also violate the company’s employees, many of whom threatened to quit if forced to comply. Lastly, complying with the FBI order would have set precedents for similar situations in other countries like China, impacting customers internationally.

This paper demonstrates the difficult decisions and considerations that global companies sometimes have to make to continue operating successfully in a global market.


References

Meyer, C., & Kirby, J. (2012). Standing on the sun: How the explosion of capitalism abroad will change business everywhere. Boston, MA: Harvard Business Review Press.

Saint Mary’s University of Minnesota. (2016, September). 2016-2017 catalog & student handbook, Organizational Leadership, M.A. Retrieved from http://catalog.smumn.edu/preview_program.php?catoid=21&poid=2237&returnto=1185

The New York Times. (2016, March 21). Breaking down Apple’s iPhone fight with the U.S. government. Retrieved from http://www.nytimes.com/interactive/2016/03/03/technology/apple-iphone-fbi-fight-explained.html?_r=1


Apple vs. FBI: The iPhone Security Controversy

Laura Inlow

Saint Mary’s University of Minnesota

Schools of Graduate & Professional Programs

OL 634: Economic and Political Contexts

Rick Bernardo

Curt Fernandez

August 14, 2016


Apple vs. FBI: The iPhone Controversy

In December 2015, Syed Rizwan Farook and his wife, Tashfeen Malik, committed a mass shooting in San Bernadino, California (New York Times, 2016). They killed 14 and injured 22 others in the incident (Blake, 2016). During the aftermath, the United States Federal Bureau of Investigations attempted to force Apple Inc. to give them backdoor access to Farook’s iPhone, and Apple refused.

The FBI alleged that Apple’s refusal violated its “right to due process” (New York Times, 2016). After the Justice Department sued for Apple’s help, a judge ruled that Apple would be required to create software to aid the FBI’s efforts (Reisinger, 2016). Apple stood firm, however, in its claims that forcing its engineers to write new code would risk the security of iPhone users worldwide, and would constitute a violation of their First Amendment right to free speech (New York Times, 2016). So who was in the right?

FBI’s Case

The FBI dug itself into a deeper hole when it ordered that Farook’s iCloud account be reset shortly after the shooting (New York Times, 2016). Instead of giving investigators access to the information they sought, it had quite the opposite effect. Because security on newer-model iPhones wipes a phone’s data after 10 incorrect password attempts, the FBI sued for Apple’s assistance in breaking the encryption (New York Times, 2016).

This wasn’t the first time the FBI sought to gain access to information on private iPhones. In fact, there are currently other pending cases (New York Times, 2016), and the bureau is thought to have made between 9 and 17 similar requests between October 2015 and February 2016 alone (Sullivan, 2016). Though the FBI claims its reasoning is for the protection of Americans against terrorism (New York Times, 2016), lawful precedent is not necessarily on the government’s side. In a drug case in Brooklyn earlier this year, a judge ruled in Apple’s favor to block law enforcement officials from accessing an iPhone (Bennett and Goldstein, 2016), even though the phone in question was an older model, which would have been easier to crack (New York Times, 2016).

Some say this trend in heightened smartphone security actually causes more harm to the process of prosecuting criminals than it creates effective protection for everyday users (Bernstein, 2016). Smartphones like the iPhone can offer a wealth of digital information that can be helpful in prosecuting or defending criminal cases. Especially in situations where time is an issue, important evidence could be unnecessarily lost (Bernstein, 2016).

Inside Apple Inc.

Apple, headed by CEO Tim Cook, maintained its pro-privacy stance for multiple reasons––stakeholder privacy, maintaining the right to free speech, and to protect its employees, to name a few. In addition, the company maintained that the FBI could not reasonably prove there wasn’t a way around Apple’s compliance (Sullivan, 2016).

For everyday users, the benefits of security may outweigh the risks, especially now that our phones can store very personal medical and financial information (Bernstein, 2016), according to privacy advocates. Creating a backdoor for the FBI would mean ignoring a significant hole in security, which could create access for the wrong people (New York Times, 2016).

For Apple’s employees, compliance would have meant going against their professional nature, according to Mark Rotenberg, executive director of the Electronic Privacy Information Center (Markoff, Benner, and Chen, 2016). Apple said it could take as many as 6-10 engineers up to a month to create an entirely new operating system to allow the FBI access, and maintains that forcing them to write code against their will would be a violation of their First Amendment rights (Markoff, Benner, and Chen, 2016). During interviews with more than half a dozen current and former Apple employees, some indicated they would refuse, or even quit, if ordered to comply (Markoff, Benner, and Chen, 2016).

Apple may have acted in an effort to maintain the trust of both of these important stakeholder groups (Zand, 2010), which is commendable from an organizational development standpoint. Other Silicon Valley giants, including Google and Facebook, stood behind Apple’s decision as well (New York Times, 2016), and are not new to supporting tech security. Even in the face of $10,000 per day fines, similar to those Apple could have faced in this situation, the small email servicer Lavabit, for example, chose to close down operations rather than comply with orders to give the government access to information on Edward Snowden during the Wikileaks scandal (Markoff, Benner, and Chen, 2016).

Not everyone in tech, however, feels this way. BlackBerry CEO John Chen came out as an opponent of Apple’s decision when, in a blog post, he wrote, “we reject the notion that tech companies should refuse reasonable, lawful access requests. Just as individual citizens bear responsibility to help thwart crime when they can safely do so, so do corporations have a responsibility to do what they can” (Blake, 2016). Where Apple could have gone wrong in the eyes of opponents was its apparent lack of patriotism, which is necessary to a point (Brown, 2009). At the same time, it is commendable that the company stayed true to its idealistic commitment to stakeholders, rather than crumbling under the pressure of the U.S. government (Brown, 2009).

Larger Implications

The difficult decision between the personal privacy of iPhone users around the world and national security illustrates the conundrum facing leaders of multinational and transnational companies today. Because Apple is based in Silicon Valley, it is largely connected with the United States, which also represents its largest customer base, and therefore, determines its dominant identity (Nijhof, Forterre, and Jeurissen, 2008). As a multinational or transnational corporation, however, they needed to consider their stakeholders around the world, including those in China, the company’s second largest market at $59 billion (New York Times, 2016). One concern was that compliance in the U.S. would make it even harder to say no if faced with a similar request in China, where refusal could have serious negative implications for Apple’s bottom line (New York Times, 2016). This concern might lead some to believe that what Apple did was in its best interest as a company focused on profit, whether or not that was the case.

The Workaround

The day before a hearing scheduled on March 22, the government was granted a postponement saying it might no longer need Apple’s help to break the encryption (New York Times, 2016). On March 28, the Justice Department dropped the case, apparently hiring third-party hackers to break the iPhone’s encryption without Apple’s compliance (Benner and Lichtblau, 2016). Moving forward, there is a risk that the government could classify the tool rather than share it with Apple so the company can patch the security issue and protect its customers (Benner and Lichtblau, 2016).

In April, the FBI announced that as a result of hacking into the phone, it found that Farook “likely did not make contact with another ‘plotter’ during the 18-minute period” following the shooting (Reisinger, 2016). It is unclear how significant the finding was, however, and as of April 20, investigators planned to continue searching (Reisinger, 2016).

Conclusion

Apple’s leadership chose to make their stakeholders around the world, as well as their own employees, a priority over their national government. In this way, they acted as a transnational company would––in which the decisions of leadership were made in contemplation of the world market as a single economic unit (Drucker, 1997). As Apple is a U.S.-based company, it is not a surprise that their reaction did not sit well with the FBI, an entity of the U.S. government. That doesn’t mean, however, that the decisions made by Apple to not comply were the wrong ones. It is apparent that Apple’s leadership saw the bigger picture and made the difficult decision to go with the choice that would be the most beneficial to the largest number of the company’s stakeholders, both locally and worldwide.

This is not likely to be the last case of its kind, and future cases will likely set legal precedents moving forward. As technology continues to evolve and globalization continues to change the world market, it will be interesting to see if tech companies like Apple continue to hold steady on these decisions or if they end up making concessions to local and global governments.


References

Bennett, K. and Goldstein, J. (2016, February 29). Apple wins ruling in New York iPhone hacking order. New York Times. Retrieved from http://www.nytimes.com/2016/03/01/technology/apple-wins-ruling-in-new-york-iphone-hacking-order.html

Bennett, K. and Lichtblau, E. (2016 March 28). U.S. says it has unlocked iPhone without Apple.  New York Times.  Retrieved from http://www.nytimes.com/2016/03/29/technology/apple-iphone-fbi-justice-department-case.html

Bernstein, B. (2016 April 7). What if Apple is wrong? MIT Technology Review, 119(3). Retrieved from https://www.technologyreview.com/s/601145/what-if-apple-is-wrong/

Blake, A. (2016 July 21). Blackberry CEO chides Apple over encryption stance in San Bernadino iPhone case. The Washington Times. Retrieved from http://www.washingtontimes.com/news/2016/jul/21/blackberry-ceo-chides-apple-over-encryption-stance/

Brown, G. (2009). Global ethic vs. national interest. [Video]. TEDGlobal. Retrieved from http://www.ted.com/talks/gordon_brown_on_global_ethic_vs_national_interest?language=en.

Drucker, P. (1997). The global economy and the nation-state. Foreign Affairs, 76(5), 151-171.

Markoff, J., Benner, K., and Chen, B. (2016 March 17). Apple encryption engineers, if ordered to unlock iPhone, might resist.  New York Times. Retrieved from http://www.nytimes.com/2016/03/18/technology/apple-encryption-engineers-if-ordered-to-unlock-iphone-might-resist.html

The New York Times. (2016 March 21). Breaking down Apple’s iPhone fight with the U.S. government.  New York Times. Retrieved from http://www.nytimes.com/interactive/2016/03/03/technology/apple-iphone-fbi-fight-explained.html?_r=1

Nijhof, A., Forterre, D., & Jeurissen, R. (2008). Managing legitimacy issues in global supply chains: The case of the athletic footwear industry. Corporate Governance, 8(4), 506-517.

Reisinger, D. (2016 April 20). FBI got useful information off San Bernadino iPhone. Fortune. Retrieved from http://fortune.com/2016/04/20/fbi-san-bernardino-iphone/

Sullivan M. (2016 February 26). These are Apple’s top 10 legal points in the iPhone encryption case. Fast Company. Retrieved from http://www.fastcompany.com/3057187/these-are-apples-top-10-legal-points-in-the-iphone-encryption-case

Zand, D. (2010). An organizational development odyssey: In search of inward light. Journal of Applied Behavioral Science 46(4), 424-435.

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