The Downside of Brand Loyalty: Apple Fights to Protect Clients Against Government Overreach

William Todd Farmer, KLJ Staff Editor[1]

Who has your back? According to the Electronic Frontier Foundation (“EFF”), a group that aims to promote digital rights and protect personal freedoms from government overreach, Apple Inc. has your back and is to be commended for “its strong stance regarding user rights, transparency, and privacy.”[2] In their same annual report, the EFF gives Apple five out of five stars for protecting users’ personal data from government requests, due to Apple’s privacy policies that include requiring a warrant before giving content to law enforcement and opposing deliberate security weaknesses that create backdoors for law enforcement access.[3]

This steadfast commitment to user privacy has been on display recently, as Apple, even in the face of a search warrant, refused to unlock an iPhone 5s for federal law enforcement in a case pending in the Eastern District of New York.[4] While the Justice Department argued that the All Writs Act gave the court authority to compel Apple’s acquiescence, Apple requested that the court deny the government’s application for an order due to its belief that performing the extraction would “threaten the trust between Apple and its customers and substantially tarnish the brand.”[5]

Before the court was able to reach a conclusion on the issue, the defendant in the case entered a guilty plea.[6] Although the government continues to pursue its application for a court order compelling Apple’s assistance in bypassing the lock-screen, the guilty plea effectively alleviated pressures for expedited treatment of the issue.[7] Thus, the consideration of this question may extend for some time. Prior to the guilty plea, Magistrate Judge James Orenstein, presiding over the case, seemed doubtful as to whether the government could successfully use the All Writs Act to force Apple to assist in law enforcement investigations, and he requested Apple comment on whether the order would be unduly burdensome to the company.[8]

What might happen if the court allows the government’s All Writs Act argument to proceed? This is not outside the realm of possibility, as a separate New York court has held that the All Writs Act authorized it to order a cell phone manufacturer to assist in extracting data by bypassing the passcode of the phone to execute a search warrant.[9] The All Writs Act provides, in pertinent part, that “all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”[10] In lieu of the Act’s broad language, would Apple’s “tarnished brand” argument be sufficient to show that the order was unduly burdensome on the company, thus defeating the government’s application for the order?

Relevant statistics seem to indicate that Apple would likely be unsuccessful arguing that compliance would be unduly burdensome by tarnishing its brand image. In the first three quarters of 2015, Apple astonishingly captured ninety-two percent of profits in the smartphone industry.[11] But this staggering attachment to Apple isn’t based on customer concerns about privacy; in fact, fifty-nine percent of iPhone users have admitted to “blind loyalty,” stating that they would not even consider looking into other cell phones when upgrading.[12] More tellingly, seventy-eight percent said that the reason they felt this way was because “they couldn’t imagine having a different type of phone now,” while fifty-two percent further stated that they were simply “really impressed” with their iPhones.[13] Considering Apple has reached this level of brand loyalty, while in the past complying to assist law enforcement execute warrants,[14] it is unlikely that the claimed “tarnished brand” effect would be seen as unduly burdensome by a court.

If and when Apple litigates on this issue in the future, it will need to find and focus on other exceptions to the All Writs Act to prevail. As I believe the company’s commitment to customer privacy and protection is admirable, I hope they succeed.

[1] J.D. expected May 2017.
[2] Nate Cardozo, et al., Elec. Frontier Found., Who Has Your Back? Protecting Your Data From Government Requests 18 (2015), https://www.eff.org/files/2015/06/18/who_has_your_back_2015_protecting_your_data_from_government_requests_20150618.pdf.
[3] See id. at 18–19.
[4] Sam Shead, Apple is Refusing to Unlock an iPhone 5s for US Law Enforcement, Business Insider (Oct. 26, 2015, 8:08 AM), http://www.businessinsider.com/apple-is-refusing-to-unlock-an-iphone-5s-2015-10.
[5] Id.
[6] John Ribeiro, Man Whose iPhone Passcode DOJ Wanted Apple to Bypass Enters Guilty Plea, Computerworld (Oct. 30, 2015, 4:25 AM), http://www.computerworld.com/article/2999792/security/man-whose-iphone-passcode-doj-wanted-apple-to-bypass-enters-guilty-plea.html.
[7] See id.
[8] See id.
[9] See In re Order Requiring [XXX], INC. to Assist in the Execution of a Search Warrant, No. 14 Mag. 2258, 2014 WL 5510865, at *1–3 (S.D. N.Y Oct. 31, 2014).
[10] 28 U.S.C.A. § 1651 (West, WestlawNext through Pub. L. No. 114–61 (excluding Pub. L. 114–52, 114–54, 114–59, and 114–60)).
[11] Felix Richter, Apple Claims 92% of Global Smartphone Profits, Statista (Nov. 18, 2015), http://www.statista.com/chart/4029/smartphone-profit-share/.
[12] Gordon Kelly, The Majority of iPhone Users Admit to ‘Blind Loyalty’ – Why This is a Problem for Apple, Forbes (Mar. 21, 2014, 9:00 AM), http://www.forbes.com/sites/gordonkelly/2014/03/21/the-majority-of-iphone-users-admit-to-blind-loyalty-why-this-a-problem-for-apple/.
[13] Id.
[14] Ribeiro, supra note 5.