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Data Sheet—Saturday, February 20, 2016

February 20, 2016, 7:08 PM UTC

This is Jonathan Vanian, filling in for Robert Hackett while he is off.

The battle between the public and private sector over encryption technology kicked into warp speed this week.

On Tuesday, a federal judge in Riverside, California ordered Apple to build a custom version of its iOS operating system that can be installed into the iPhone of one of the shooters responsible for the December rampage killings in San Bernardino.

Because the data inside the shooter’s iPhone is encrypted, the FBI can’t simply retrieve the information it wants from the device’s memory chips. Instead, it needs the device to be unlocked with the appropriate PIN number.

However, Apple’s tough iPhone security measures make the process of guessing the phone’s PIN number a risky business. If the FBI enters the wrong PIN number too many times, the phone will permanently delete the stored data.

A special version of the iPhone operating system that would either bypass or remove that data-deletion feature would presumably make it easier for the FBI to crack the PIN number without fearing a total data wipeout.

Apple CEO Tim Cook was displeased with the court order and wrote a letter to customers in which he said the custom operating system is “too dangerous to create” because it circumvents the company’s security features.

Cook claims that the government is asking Apple to weaken the measures it takes to encrypt its data. To create the custom software would set a bad precedent that “would hurt only the well-meaning and law-abiding citizens who rely on companies like Apple to protect their data.”

That’s balderdash, the Department of Justice responded in the form of a court motion. The DOJ claimed that it won’t “require Apple to create or provide a ‘back door’ to every iPhone.” Apple’s public stance on the issue is only a “public brand marketing strategy.”

Now, representatives of the House Energy and Commerce Committee have invited Cook and FBI Director James Comey to appear at a yet-to-be-scheduled hearing to discuss encryption, a topic that will almost certainly be debated during the upcoming presidential elections. Additionally, the House Judiciary Committee reportedly asked Apple officials to testify at a similar hearing on March 1.

This chain of events presents a perfect storm to bring the topic of encryption to the public stage.

You have the world’s most valuable company, the U.S.’s leading criminal investigation and enforcement agency, and the controversial issues of terrorism, national security, and data privacy all intermingling.

Over the past few years, the topic of whether companies should ease up on encryption seemed to be of interest to only those deeply involved in the issue. Occasionally, there would be a mainstream news report on the issue. But generally speaking, the topic seemed to be of concern primarily to insiders or security conference attendees.

This time, considering the powerful players involved and its relation to a terrorist attack, the topic of encryption might stick around in the public forum.


Jonathan Vanian


Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. Fortune reporter Robert Hackett is off for the week. You can reach him via Twitter, Cryptocat, Jabber, PGP encrypted email, or however you (securely) prefer. Feedback welcome.


In Apple vs. FBI, many top government officials side with Apple. Michael Hayden, former director of the National Security Agency, says several current and retired top government officials side with Apple in its war with the Federal Bureau of Investigation. (Fortune)

If the FBI can't decrypt the contested iPhone, John McAfee says he can. John McAfee wants to lend his services to Apple and the FBI over the contested iPhone and will decrypt it for free, thus negating a legal dispute. If he can't do it, he claims he will eat his shoe. (Fortune)

HSBC wants its customers to embrace "Biometric Banking." The giant bank is experimenting with replacing traditional passwords with voice and touch identification technologies. (Fortune)

Proposed encryption bill would criminalize companies. Proposed legislation by the Chairman of the U.S. Senate Intelligence Committee Richard Burr would impose criminal penalties on companies that fail to unscramble encrypted messages under court orders. (Fortune)

Hollywood hospital pays off hackers to restore computer system. A Hollywood hospital whose internal IT systems were held hostage by hackers decided that it would pay a $17,000 ransom in order to gain back access to its systems. (Fortune)

Former IBM chief named to Obama cybersecurity team. President Barack Obama named former IBM chief executive Sam Palmisano to a new cybersecurity commission. (Fortune)

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The U.S. vs. Apple: Does the FBI Have a Case?

It’s the biggest tech case of the year, and maybe the decade. Taking place in a California federal court, the case pits Apple against the U.S. government over control of the iPhone, with terrorism and privacy as the backdrop. The outcome will ripple across the entire technology sector and influence governments around the world.

So who is right? Does the FBI, which wants to force Apple to override the iPhone’s encryption features, have a legal right to do so? Here’s a plain English guide to the legal issues, including constitutional questions, and what will happen next.

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