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Are New Political Dark Clouds Forming Over Apple Regarding their Stance on Encryption?


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I think we all knew that while Apple appeared to win round one with the government over encryption, that the government was in this fight for the long haul and that the battle would continue behind the scenes. In March Apple's CEO rubbed salt in that wound by taking up key time in a product keynote to once again make Apple's position known about encryption. In January Apple was called to a meeting to discuss a balance between nation security and consumer privacy. Apple's CEO wasn't just against the government, he openly rebuked and chastised Loretta Lynch and the government for not standing for encryption. On June 9 the DOJ led by Loretta Lynch delivered a little payback to Apple for causing the government so much grief by being so vindictive and mean spirited in public. The DOJ decided to side with Samsung in their legal battle with Apple over patent infringement. It was truly a stunning development. Should Apple lose their case with Samsung, it would be a huge embarrassment for Apple. Exactly what the Government would like to exact upon Apple.


On Friday Fortune ran a report titled "Top Prosecutor Blasts Apple and Google over 270 Encrypted Phones." Speaking at a Bloomberg legal summit, Manhattan District Attorney Cy Vance complained the companies have chosen to "engineer themselves out of criminal investigations," and allowed cyber-criminals to operate with impunity. He said the problem is becoming acute in America's largest city.


"In my office alone, we now have 270 lawfully-seized iPhones running iOS 8 or 9 that are completely inaccessible," he said, according to a copy of his remarks. "These devices represent hundreds of real crimes… that cannot be fully investigated, including cases of homicide, child sex abuse, human trafficking, assault, robbery, and yes—cybercrime and identity theft."


Vance of course has never changed his tune and so I decided not to cover the same old ground on this issue on Friday. But then on Saturday I read a surprising report that was published on Friday titled "Pelosi: The iPhone was invented by 'federal research,' not Apple."


According to the report, "House Minority Speaker Nancy Pelosi doesn't believe the iPhone came into existence because of Apple or Steve Jobs.


At a Democratic Platform Drafting Committee hearing on Thursday, Pelosi pulled out what seemed to be an iPhone 6S Plus and said the smartphone was built through federal research, not by Apple's or Steve Jobs' ingenuity.


"Anybody here have a smartphone? In this smartphone, almost everything came from federal investments and research," Pelosi said. "GPS, created by the military, flatscreens, [LCD], digital camera, wireless data compression, research into metal alloys for strength and lightweight, voice recognition — the list goes on and on … They say Steve Jobs did a good idea designing it and putting it together. Federal research invented it."


Essentially, the idea is that businesses and individuals find success through other people, things, and, as Pelosi says, "federal research." It's up to these businesses to give back to the government, and Pelosi believes that federal research contracts deserve just as much of limelight.


Although the report noted that Pelosi has already tried to dial back the rhetoric in discrediting what Apple or Steve Jobs had done. – it goes to show you how both sides of the isle are not pleased with Apple's open and ugly fight that they decided to wage. If the Democrats are angry at Apple, then you know that the grumblings echoing in Congress and the Senate could spell trouble for Apple down the road. Most understand encryption for financial products like Apple Pay and infrastructure and so forth. But on general communications, the war is still on.


At least twice this past weekend I heard analysts who were ex-US security agency executives display their anger with Apple's fight with the government over encryption and saying that it was high time that new laws were put into place to force Apple to comply with warrants over unlocking iPhones. The anger appeared to be misplaced as there was no mention as to the make of the smartphone that was used by the terrorist on Sunday morning and selfies taken by the shooter that are found on the net have shown him to be using a non-Apple smartphone.  


Yet Sunday morning's horrific terrorist attack in Orlando Florida has once again opened a wound on the issue of encryption and round two of this debate is likely on the way. It was once thought that the issue would live or die in Washington depending on which politic party wins the election this fall – but with Pelosi pounding the table against Apple on Friday, I'm not sure either party will be willing to go to bat for Apple when it comes to thumbing their nose at lawful search warrants.


For now there are new dark clouds forming over Apple, though it's just a little too early to detect whether there's a light rain shower on the way or an unexpected monsoon.


On a side note: Later this morning Tim Cook will take to the WWDC 2016 stage and one has to wonder if he'll say something about the terrorist attack that occurred this past weekend against a gay club. Being one of the top gay CEO's in America there's more than a strong chance that he'll have an opening statement on this tragedy - so stay tuned.


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