Yesterday, Apple Inc. AAPL tasted sweet victory in a privacy battle against the FBI.
Case and Verdict
With regard to the New York drug trafficking case, federal judge James Orenstein’s verdict was in Apple’s favor. The judge said, “after reviewing the facts in the record and the parties' arguments, I conclude that none of those factors justifies imposing on Apple the obligation to assist the government's investigation against its will.”
The government had earlier ordered Apple to unlock an iPhone for a crime investigation leveraging the All Writs Act which authorizes the court to "issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law."
However, Apple stood by its security and encryption standards and opposed the order.
How Will the Verdict Help Apple?
This legal victory is important for Apple not only because it wipes off one legal blemish, but also because it may help the tech giant to secure the court’s favor in a separate but similar case. Since Dec 2015, Apple has been contesting another court ruling (in California) that had ordered it to assist the FBI in unlocking an iPhone used by one of the attackers in the San Bernardino shooting that claimed 14 lives.
The FBI had wanted Apple’s assistance in creating a backdoor to unlock the iPhone of the alleged criminal. Apple devices are so designed that the operating system erases all data after 10 incorrect password attempts. Since neither Apple, nor FBI has the passcode to the device, the investigative agency required the iPhone maker to make another operating system that would have the backdoor to bypass the encryption and security.
Apple has been maintaining that it would have to make compromises with the security of other devices, if it fulfils the FBI’s requirement. Furthermore, it would have meant additional costs and time for the company apart from an obligation to meet more such requests in the future. In fact, Apple is already involved in nine similar cases that require it to assist the government.
Orenstein’s ruling specified, “In considering the burden the requested relief would impose on Apple, it is entirely appropriate to take into account the extent to which the compromise of privacy and data security that Apple promises its customers affects not only its financial bottom line, but also its decisions about the kind of corporation it aspires to be.”
This legal victory should strengthen Apple’s position in the San Bernardino shooting case for which the company is facing FBI at a Congressional hearing today.
Additionally, Apple is also being supported by most of the leading tech players including Alphabet GOOGL, Facebook FB, Twitter TWTR, Amazon and Microsoft in the San Bernardino shooting case. Even other institutions like the Electronic Frontier Foundation and the American Civil Liberties Union backed Apple, emphasizing the need to ensure security and privacy of devices.
Zacks Rank
Apple carries a Zacks Rank #3 (Hold).
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