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Apple, Inc. and Google, Inc. Team Up Against Uncle Sam

By Leo Sun - May 27, 2015 at 8:30AM

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What common foe has brought Apple and Google together?

Apple (AAPL 0.63%) co-founder Steve Jobs once declared that he would go to "thermonuclear war" against Google (GOOG 0.19%) (GOOGL 0.33%) over Android, which he considered a "stolen product." Apple CEO Tim Cook never followed up on those threats, but the two companies are still fierce rivals in the mobile market.

However, Apple and Google recently set aside their differences to tackle a more urgent problem: the American government's controversial digital surveillance practices. Apple, Google, Facebook (META 0.22%), other tech giants, and several noted cryptologists recently signed a letter to the Obama administration, urging it to not force tech companies to lower encryption standards or create "back doors" for law enforcement agencies.

Source: Pixabay.

Why law enforcement hates encryption
Most U.S. law enforcement agencies oppose universal encryption across electronic devices, claiming it helps bad guys cover their tracks. Tech companies note that all data backed up on cloud services like iCloud and Google Drive can already be subpoenaed legally.

Last October, FBI director James Comey argued that criminals could elect to not back up their data on the cloud, and that local disk encryption tools like Apple's FileVault were creating "a black hole for law enforcement."

In addition, even if devices are subpoenaed, there's no guarantee that agencies can decrypt them. Over the past few years, several defendants refused to enter passwords to decrypt their hard drives on the basis of Fifth Amendment rights. Some of them were eventually forced to decrypt their hard drives by court rulings, but courts across the U.S. remain divided on the issue. Furthermore, "remote wipe" tools can wipe devices that have already been seized.

Therefore, law enforcement agencies have suggested that device makers add back doors that only they can exclusively access, similar to a digital version of TSA locks for luggage. Apple, Google, and others pointed out that there's no guarantee that those back doors won't be exploited by hackers as well.

Why it's bad for business
Ethical questions aside, lower encryption standards and back doors would be bad for business. After whistleblower Edward Snowden exposed the extent of the NSA's surveillance operations -- which included access to personal emails, video chats, and phone calls -- U.S. tech and telecom companies have been eyed with suspicion in overseas markets.

Last year, the German government warned that Microsoft's (MSFT 0.53%) Windows 8 could serve as an NSA back door when paired with a certain surveillance chip. Shortly afterwards, the Chinese government banned Windows 8 from its computers.

Source: Pixabay.

The German government also dumped Verizon for Deutsche Telekom, citing surveillance concerns after the Angela Merkel phone-hacking scandal. This February, the Chinese government banned the government use of Apple and Cisco devices, as well as Intel's security software. Facebook and Google both face constant questions about the legal "right to be forgotten" -- the idea that people should be able to erase their digital pasts -- across Europe.

The U.S. government then exacerbated this problem by bypassing national governments while requesting data stored on government servers. Last year, Microsoft lost an appeal to block the U.S. government's search warrant for a customer's emails stored in an Irish data center, which it called an "astounding infringement" on Ireland's national sovereignty. Apple, a big supporter of Microsoft's argument, notably started storing Chinese iCloud data in China last year, presumably to keep it away from the NSA.

Necessary or naive?
All these cases indicate that overseas customers are starting to see American tech companies as extensions of the NSA. As a result, countries are developing homegrown alternatives to American tech.

China already has Ubuntu Kylin, a Linux-based alternative to Windows for government computers, and Loongson processors, which power several supercomputers in place of Intel's industry-standard Xeon chips. If this trend continues, some U.S. tech companies could lose their competitive edge in foreign markets.

In my opinion, both sides of the argument between tech companies and law enforcement agencies are naive. Tech companies that want bulletproof encryption for all devices neglect the fact that they are creating ideal storage devices for criminals. Law enforcement agencies that want exclusive back doors to mobile devices overlook how easily hackers could exploit them. Letting "cyber police" quietly snoop through mobile devices also tramples all over civil rights.

There aren't any easy answers to this problem, but a line clearly has to be drawn somewhere. That's what Apple, Google, and Facebook are trying to do, but it's unclear if the Obama administration will listen.

Leo Sun owns shares of Apple, Facebook, and Verizon Communications. The Motley Fool recommends Apple, Cisco Systems, Facebook, Google (A shares), Google (C shares), Intel, and Verizon Communications. The Motley Fool owns shares of Apple, Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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