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I wonder how far Apple are prepared to go? Does anyone know how far they need to go to put themselves outside of US jurisdiction? I know some companies already

by junto 11y ago

I wonder how far Apple are prepared to go? Does anyone know how far they need to go to put themselves outside of US jurisdiction? I know some companies already sign their software releases outside the US for tax reasons. Is that also enough to exclude themselves from being forced to hand over the keys? I'm starting to picture a world, where software development (as well as corporate structures and finance) are off-shored to development havens, similar to the Swiss and their banking. We already have the start of data havens. How long until these large companies see the benefit from a legal perspective to defend themselves from an over-reaching government? How would Wall Street react to such a move? Is such a move away from Wall Street even possible? Can companies switch exchanges?

SEJeff 11y ago
Well wall St would react very negatively if the US could demand source or back doors. It would severely hurt Apple's stock, of which the iPhone is their top performer. I suspect knowing this, they would go all the way and with their 150ish billion in pure cash reserves, the FBI has an awfully big fight on their hands. Apple could easily waste 10-15 years in red tape and appeals with a case like this all the while designing the iPhone so that even with the source it is hack resistant
ThrustVectoring 11y ago
It's very difficult to sell phones to Americans while thumbing your nose at the American legal system.
- foota 11y ago
  Just like it's difficult to sell anything to Americans while thumbing your nose at taxes? Oh, wait....
  - ams6110 11y ago
    Who is thumbing their nose at taxes? I'm pretty certain Apple pays all the taxes it is obligated to pay.
    - foota 11y ago
      The comment was not directed at Apple's tax avoidance, but rather at the fact that most people don't care about what companies do. Regardless, this is a quote from Apple's 2015 10K filing (whatever that is) "The Company’s effective tax rates for 2015, 2014 and 2013 differ from the statutory federal income tax rate of 35% due primarily to certain undistributed foreign earnings, a substantial portion of which was generated by subsidiaries organized in Ireland, for which no U.S. taxes are provided when such earnings are intended to be indefinitely reinvested outside the U.S. The higher effective tax rate during 2015 compared to 2014 was due primarily to higher foreign taxes. The effective tax rate in 2014 compared to 2013 was relatively flat."
kelnos 11y ago
Keeping the signing keys and servers outside the US wouldn't help much. The FBI could simply start arresting Apple executives who refuse to comply, charging them with obstruction of justice or whatever seems to apply.
- junto 11y ago
  What about plausible deniability? You offshore the control of the key signing, source code and development. If demands are made on US based execs, even through NSL, the execs can state that they do not hold the power to force the outside Apple entity to give over keys or source code. It isn't unlike how US companies outsource the production of their clothes to Bangladesh in order to avoid problems with US labour laws that prevent children working in factories. Not that this example is noble one I might add. But the similarities are striking.
- lallysingh 11y ago
  So people in the tech industry stop living in the US. The world's a big place, and the tech industry is full of immigrants as is.
mattkevan 11y ago
Maybe one of the first everyday uses of space travel won't be colonisation or exploration, but corporations with nation-state level resources, like Apple, basing themselves off-planet for just these reasons...
- zarify 11y ago
  Fascinating idea. To what degree would a company need to exist outside national boundaries (physical and legal) before something like this could become a reality? The idea of a giant Apple logo beaming down at us from the moon is mildly terrifying :) Surely it'd be cheaper to essentially buy a small country (Shadowrun style megacorp?).
Shivetya 11y ago
You mention Swiss banking but even that has proven to not safe from the US Government. Simple matter is, if you want to sell a product in the US or visit the US you are going to have to play by whatever rules are currently in place. So taking development off shore or the like won't do much. If anything if the FBI is successful then Apple's business will be hurt world wide as China had already "checked" Apple products to insure there weren't US back doors or such already. I am curious when it will come to the point where source code is published to ensure that there aren't back doors.
studentrob 11y ago
The economic and security impacts of mandating a back doors in phones go far beyond what the President realizes. Once he sees that he'll change his mind. However, a lot of damage has been done in that law enforcement believes they could get access to data if only us technology wizards would stop being lazy and do some work for them. Aside from the compelled speech argument, on balance, we are not more secure with back doors, we are less secure. So long as law enforcement does not understand this, they will not be effective at their jobs, and they will point the finger at technologists in future terrorist attacks. Even if law enforcement officers do not point the finger, they've already convinced so much of the public that it is the technologists' fault. We need to continue educating each other on how technology works. Seek public figures and ask them to support our cause. This could go on for years, potentially coming up during every terrorist attack.
- saiya-jin 11y ago
  don't underestimate those power hungry guys up there, we can accuse them of many things, but not for being stupid...
  - studentrob 11y ago
    Don't be so sure. We have very little tech representation in the White House. We only have a CTO as an advisor, and a Digital Services team. The DS team is not in an advisory role. They are focused on fixing broken government tech. We don't even have any tech journalists in the Press briefing room to bring further transparency. In the daily White House Press Briefing on Monday, the 14th, which is the one following Obama's remarks at SXSW, nobody asked any questions about what he said. I'd like to see us get a tech journalist in there. Megan Smith is CTO of the United States. She is calling for more computer security experts to join her at the White House [1]. > The thrust of Obama's remarks, said Smith, was "making sure that the tech communities are understanding the challenges that law enforcement and their colleagues face so that they're conscious as they're thinking through this." > So is this still an open policy-making process? "Yes," said Smith. And like others involving "complicated stuff," there's a wide range of voices at the table — including hers. To Smith, the public policy challenges and possibilities raised by the broad range of digital security issues echos the topic she was in Austin to highlight: the need to draw smart technologists to government service. In other words, the CTO is outnumbered at the table in discussions about encryption. I'd also like to see her produce meeting minutes for discussions about encryption, or some further transparency. The Digital Services team's self stated founding goal was to increase transparency of our government. However, on this encryption issue, they and Megan Smith have been too opaque. We need more details on what they are talking about. They are our public servants. [1] http://www.politico.com/tipsheets/morning-tech/2016/03/us-cto-smith-on-encryption-were-still-in-the-middle-of-that-conversation-security-worries-for-the-internet-of-things-scoop-fcc-gets-open-internet-complaints-over-t-mobiles-binge-on-213214 http://www.politico.com/tipsheets/morning-tech/2016/03/us-ct...

by junto 11y ago

SEJeff 11y ago

Well wall St would react very negatively if the US could demand source or back doors. It would severely hurt Apple's stock, of which the iPhone is their top performer. I suspect knowing this, they would go all the way and with their 150ish billion in pure cash reserves, the FBI has an awfully big fight on their hands. Apple could easily waste 10-15 years in red tape and appeals with a case like this all the while designing the iPhone so that even with the source it is hack resistant

ThrustVectoring 11y ago

It's very difficult to sell phones to Americans while thumbing your nose at the American legal system.

foota 11y ago
Just like it's difficult to sell anything to Americans while thumbing your nose at taxes? Oh, wait....
- ams6110 11y ago
  Who is thumbing their nose at taxes? I'm pretty certain Apple pays all the taxes it is obligated to pay.
  - foota 11y ago
    The comment was not directed at Apple's tax avoidance, but rather at the fact that most people don't care about what companies do. Regardless, this is a quote from Apple's 2015 10K filing (whatever that is) "The Company’s effective tax rates for 2015, 2014 and 2013 differ from the statutory federal income tax rate of 35% due primarily to certain undistributed foreign earnings, a substantial portion of which was generated by subsidiaries organized in Ireland, for which no U.S. taxes are provided when such earnings are intended to be indefinitely reinvested outside the U.S. The higher effective tax rate during 2015 compared to 2014 was due primarily to higher foreign taxes. The effective tax rate in 2014 compared to 2013 was relatively flat."

kelnos 11y ago

Keeping the signing keys and servers outside the US wouldn't help much. The FBI could simply start arresting Apple executives who refuse to comply, charging them with obstruction of justice or whatever seems to apply.

junto 11y ago
What about plausible deniability? You offshore the control of the key signing, source code and development. If demands are made on US based execs, even through NSL, the execs can state that they do not hold the power to force the outside Apple entity to give over keys or source code. It isn't unlike how US companies outsource the production of their clothes to Bangladesh in order to avoid problems with US labour laws that prevent children working in factories. Not that this example is noble one I might add. But the similarities are striking.
lallysingh 11y ago
So people in the tech industry stop living in the US. The world's a big place, and the tech industry is full of immigrants as is.

mattkevan 11y ago

Maybe one of the first everyday uses of space travel won't be colonisation or exploration, but corporations with nation-state level resources, like Apple, basing themselves off-planet for just these reasons...

zarify 11y ago
Fascinating idea. To what degree would a company need to exist outside national boundaries (physical and legal) before something like this could become a reality? The idea of a giant Apple logo beaming down at us from the moon is mildly terrifying :) Surely it'd be cheaper to essentially buy a small country (Shadowrun style megacorp?).

Shivetya 11y ago

You mention Swiss banking but even that has proven to not safe from the US Government. Simple matter is, if you want to sell a product in the US or visit the US you are going to have to play by whatever rules are currently in place. So taking development off shore or the like won't do much. If anything if the FBI is successful then Apple's business will be hurt world wide as China had already "checked" Apple products to insure there weren't US back doors or such already. I am curious when it will come to the point where source code is published to ensure that there aren't back doors.

studentrob 11y ago

The economic and security impacts of mandating a back doors in phones go far beyond what the President realizes. Once he sees that he'll change his mind. However, a lot of damage has been done in that law enforcement believes they could get access to data if only us technology wizards would stop being lazy and do some work for them. Aside from the compelled speech argument, on balance, we are not more secure with back doors, we are less secure. So long as law enforcement does not understand this, they will not be effective at their jobs, and they will point the finger at technologists in future terrorist attacks. Even if law enforcement officers do not point the finger, they've already convinced so much of the public that it is the technologists' fault. We need to continue educating each other on how technology works. Seek public figures and ask them to support our cause. This could go on for years, potentially coming up during every terrorist attack.

saiya-jin 11y ago
don't underestimate those power hungry guys up there, we can accuse them of many things, but not for being stupid...
- studentrob 11y ago
  Don't be so sure. We have very little tech representation in the White House. We only have a CTO as an advisor, and a Digital Services team. The DS team is not in an advisory role. They are focused on fixing broken government tech. We don't even have any tech journalists in the Press briefing room to bring further transparency. In the daily White House Press Briefing on Monday, the 14th, which is the one following Obama's remarks at SXSW, nobody asked any questions about what he said. I'd like to see us get a tech journalist in there. Megan Smith is CTO of the United States. She is calling for more computer security experts to join her at the White House [1]. > The thrust of Obama's remarks, said Smith, was "making sure that the tech communities are understanding the challenges that law enforcement and their colleagues face so that they're conscious as they're thinking through this." > So is this still an open policy-making process? "Yes," said Smith. And like others involving "complicated stuff," there's a wide range of voices at the table — including hers. To Smith, the public policy challenges and possibilities raised by the broad range of digital security issues echos the topic she was in Austin to highlight: the need to draw smart technologists to government service. In other words, the CTO is outnumbered at the table in discussions about encryption. I'd also like to see her produce meeting minutes for discussions about encryption, or some further transparency. The Digital Services team's self stated founding goal was to increase transparency of our government. However, on this encryption issue, they and Megan Smith have been too opaque. We need more details on what they are talking about. They are our public servants. [1] http://www.politico.com/tipsheets/morning-tech/2016/03/us-cto-smith-on-encryption-were-still-in-the-middle-of-that-conversation-security-worries-for-the-internet-of-things-scoop-fcc-gets-open-internet-complaints-over-t-mobiles-binge-on-213214 http://www.politico.com/tipsheets/morning-tech/2016/03/us-ct...