In FBI versus Apple, government strengthened tech’s hand on privacy

Apple

The ongoing fight between Apple and the FBI over breaking into the iPhone maker’s encryption system to access a person’s data is becoming an increasingly challenging legal issue.

With a deadline looming, Apple filed court papers explaining why it is refusing to assist the FBI in cracking a password on an iPhone used by one of the suspects in the San Bernardino shooting. CEO Tim Cook has declared he will take the case all the way to the Supreme Court.

The tech company now wants Congress to step in and define what can be reasonably demanded of a private company, though perhaps it should be careful what it wishes for, considering lawmakers have introduced a bill that compels companies to break into a digital device if the government asks.

But there is an irony to this debate. Government once pushed industry to improve personal data privacy and security – now it’s the tech companies who are trumpeting better security. My own research has highlighted this interplay among businesses, users and regulators when comes to data security and privacy.

For consumers, who in coming years will see ever more of their lives take place in the digital realm, this heightened attention on data privacy is a very good thing.

The business case for better privacy grows

Not too long ago, everyone seemed to be bemoaning that companies aren’t doing enough to protect customer security and privacy.

The White House, for example, published a widely cited report saying that the lack of online privacy is essentially a market failure. It highlighted that users simply are in no position to control how their data are collected, analyzed and traded. Thus, a market-based approach to privacy will be ineffective, and regulations were necessary to force firms to to protect the security and privacy of consumer data.

The tide seems to have turned. Repeated stories on data breaches and privacy invasion, particularly from former NSA contractor Edward Snowden, appears to have heightened users’ attention to security and privacy. Those two attributes have become important enough that companies are finding it profitable to advertise and promote them.

Apple, in particular, has highlighted the security of its products recently and reportedly is doubling down and plans to make it even harder for anyone to crack an iPhone.

Whether it is through its payment software or operating system, Apple has emphasized security and privacy as an important differentiator in its products. Of course, unlike Google or Facebook, Apple does not make money using customer data explicitly. So it may have more incentives than others to incorporate these features. But it competes directly with Android and naturally plays an important role in shaping market expectation on what a product and service should look like.

These features possibly play an even more critical role outside the U.S. where privacy is under threat not only from online marketers and hackers but also from governments. In countries like China, where Apple sells millions of iPhones, these features potentially are very attractive to end users to keep their data private from prying eyes of authorities.

Regulators hum a different tune

It is clear that Apple is offering strong security to its users, so much so that FBI accuses it of using it as a marketing gimmick.

It seems we have come a full circle in the privacy debate. A few years ago, regulators were lamenting how businesses were invading consumers’ privacy, lacked the proper incentives to do so and how markets needed stronger rules to make it happen. Today, some of the same regulators are complaining that products are too secure and firms need to relax it in some special cases.

While the legality of this case will likely play out over time, we as end users can feel better that in at least in some markets, companies are responding to a growing consumer demand for products that more aggressively protect our privacy. Interestingly, Apple’s mobile operating system, iOS, offers security by default and does not require users to “opt-in,” a common option in most other products. Moreover, these features are available to every user, whether they explicitly want it or not, suggesting we may be moving to a world in which privacy is fundamental.