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Can National Security Letters can be used to require companies to issue outright lies to the public? The bloomberg article indicates that the investigation is

Can National Security Letters can be used to require companies to issue outright lies to the public? The bloomberg article indicates that the investigation is not complete, so that could be on explanation for the apparent disconnect between a seemingly well-reported story and the unsually forceful denials.

close04 8y ago
I would say not. If the outcome of the investigation is that they were hacked and knew they open themselves up to all sorts of litigation. What's stopping someone to sue after buying stock under the assumption that the companies are sound? I assume they have a duty to the shareholders.
burlesona 8y ago
That's what I was wondering too.
ProAm 8y ago
No but the gov might be unhappy that the secret is out while they were trying to use the chips to infiltrate/reverse engineer wherever the chips were reporting to? Amazon has gov contracts it wants to protect so Im not surprised they would deny this at the govs request, and Apple's #1 product is privacy so having something like this show up on their servers would undermine that product strategy so I can understand their denial too (homegrown or at the govs request)
- thebooglebooski 8y ago
  This seems like the most likely reason for domestic companies to deny everything, and for their supply chain distributors to play along. 1) Big company partners with distributor. 2) Distributor has security issues. 3) Gov is already aware of security issues, says nothing. 4) Big company becomes aware of issues. 5)Gov steps in and pitches a deal: i)Both big company and distributor must deny. ii)In return, gov gets to: iii)Preserve any existing contracts iv)Protect the big company and distributor, with any legal, trade, or commercial benefits
- drawkbox 8y ago
  > Amazon has gov contracts it wants to protect so Im not surprised they would deny this at the govs request, and Apple's #1 product is privacy so having something like this show up on their servers would undermine that product strategy so I can understand their denial too Additionally, Amazon and Apple are two of the still allowed to compete western companies in China that they haven't booted out of their markets, it could be that Amazon and Apple also want to retain the Chinese market and don't want to appear like they are helping while they have the cover of the NSL. Amazon and Apple are caught in a tough spot and the hardware issue/espionage device is definitely true. It is probably just that the people that know in the company aren't allowed to say and the PR team is not part of that 'need to know' group. Either way, trust of Chinese manufacturing is over, which hits Apple very hard in both market and domestic trust.
paulgb 8y ago
Today's Money Stuff ponders another angle of this: whether those companies would be committed securities fraud by abiding by such a request: > I do not think that the securities laws explicitly allow companies to make false statements of material fact if required for national security, but you could see giving them a pass here. https://www.bloomberg.com/view/articles/2018-10-04/computer-spies-hacked-reality https://www.bloomberg.com/view/articles/2018-10-04/computer-...
- adventured 8y ago
  What if the story is bigger than Bloomberg or anyone else publicly knows at this point? That is, if the government turned over this rock and found something worse. The US Government could easily find it in its self-interest to make a deal, involving the SEC, on a national security basis, to allow Amazon and Apple to go the denial route with the US Government giving them guarantees regarding fallout. If it's worse than Bloomberg has reported, it would be highly desirable by the US Government to keep the rest as quiet as possible for as long as possible, to get at as much of what China is doing as possible. They might be running a counter intel program by now that relies on something China was doing.
  - fermienrico 8y ago
    What you're talking about is fantasy. "The US Government could easily find it in its self-interest to make a deal, involving the SEC, on a national security basis, to allow Amazon and Apple to go the denial route with the US Government giving them guarantees regarding fallout." Can you point out a legal mechanism for this to be possible?
    - Varcht 8y ago
      Unofficially, the policy is called "Too Big to Fail".
heartbreak 8y ago
> But in my experience, Apple PR does not lie. Do they spin the truth in ways that favor the company? Of course. That’s their job. But they don’t lie, because they understand that one of Apple’s key assets is its credibility. They’d say nothing before they’d lie.
- microtherion 8y ago
  "Saying nothing" is indeed an extremely common move for Apple PR. "An Apple spokesperson declined to comment" is such a proverbial reaction that it would be considered completely standard operating practice here.
Gokenstein 8y ago
What's more likely is someone on the inside of one of these companies was privy to the discovery, but not the follow up. I've been in such a situation myself where I was in the room during what LOOKED like a DDOS by Akamai 10 minutes after we got off the phone with them to turn down their CDN services. In much the same way as Apple is refuting this claim, after a few weeks of internal debate above our pay grade we decided we didn't see it and it didn't exist and therefore it didn't.
moduspol 8y ago
Perhaps these things aren't handled at the level of "company"? For a national security-related issue, you might just include the minimum number of people that need to know, which would naturally not include your PR team. Then when an article like this comes out, the PR team responds in exactly the way they would if it were an outright fabrication, which is what the goal would be.
- dguaraglia 8y ago
  Even though this could be the case (that the security team is under a gag order and the marketing/PR team don't know about it), I'm pretty sure a "no comment" response from security would signal the PR team to maybe downplay the whole thing. The active refusal is a bit too strong for just being a miscommunication.
  - minxomat 8y ago
    NSL-type deals are explicitly denied. E.g. Apple wrote: > Finally, in response to questions we have received from other news organizations since Businessweek published its story, we are not under any kind of gag order or other confidentiality obligations.
wyldfire 8y ago
If the US files injunctions for relief, federal court (FISA) justices can probably compel you to do just about anything. Presumably the Bill of Rights still pertains and takes precedent. But it's not ludicrous to think that you could be compelled to issue a denial or not issue an affirmation of the public claims.
- notatoad 8y ago
  I'm pretty sure FISA has no relation to any of this.

close04 8y ago

I would say not. If the outcome of the investigation is that they were hacked and knew they open themselves up to all sorts of litigation. What's stopping someone to sue after buying stock under the assumption that the companies are sound? I assume they have a duty to the shareholders.

burlesona 8y ago

That's what I was wondering too.

ProAm 8y ago

No but the gov might be unhappy that the secret is out while they were trying to use the chips to infiltrate/reverse engineer wherever the chips were reporting to? Amazon has gov contracts it wants to protect so Im not surprised they would deny this at the govs request, and Apple's #1 product is privacy so having something like this show up on their servers would undermine that product strategy so I can understand their denial too (homegrown or at the govs request)

thebooglebooski 8y ago
This seems like the most likely reason for domestic companies to deny everything, and for their supply chain distributors to play along. 1) Big company partners with distributor. 2) Distributor has security issues. 3) Gov is already aware of security issues, says nothing. 4) Big company becomes aware of issues. 5)Gov steps in and pitches a deal: i)Both big company and distributor must deny. ii)In return, gov gets to: iii)Preserve any existing contracts iv)Protect the big company and distributor, with any legal, trade, or commercial benefits
drawkbox 8y ago
> Amazon has gov contracts it wants to protect so Im not surprised they would deny this at the govs request, and Apple's #1 product is privacy so having something like this show up on their servers would undermine that product strategy so I can understand their denial too Additionally, Amazon and Apple are two of the still allowed to compete western companies in China that they haven't booted out of their markets, it could be that Amazon and Apple also want to retain the Chinese market and don't want to appear like they are helping while they have the cover of the NSL. Amazon and Apple are caught in a tough spot and the hardware issue/espionage device is definitely true. It is probably just that the people that know in the company aren't allowed to say and the PR team is not part of that 'need to know' group. Either way, trust of Chinese manufacturing is over, which hits Apple very hard in both market and domestic trust.

paulgb 8y ago

Today's Money Stuff ponders another angle of this: whether those companies would be committed securities fraud by abiding by such a request: > I do not think that the securities laws explicitly allow companies to make false statements of material fact if required for national security, but you could see giving them a pass here. https://www.bloomberg.com/view/articles/2018-10-04/computer-spies-hacked-reality https://www.bloomberg.com/view/articles/2018-10-04/computer-...

adventured 8y ago
What if the story is bigger than Bloomberg or anyone else publicly knows at this point? That is, if the government turned over this rock and found something worse. The US Government could easily find it in its self-interest to make a deal, involving the SEC, on a national security basis, to allow Amazon and Apple to go the denial route with the US Government giving them guarantees regarding fallout. If it's worse than Bloomberg has reported, it would be highly desirable by the US Government to keep the rest as quiet as possible for as long as possible, to get at as much of what China is doing as possible. They might be running a counter intel program by now that relies on something China was doing.
- fermienrico 8y ago
  What you're talking about is fantasy. "The US Government could easily find it in its self-interest to make a deal, involving the SEC, on a national security basis, to allow Amazon and Apple to go the denial route with the US Government giving them guarantees regarding fallout." Can you point out a legal mechanism for this to be possible?
  - Varcht 8y ago
    Unofficially, the policy is called "Too Big to Fail".

heartbreak 8y ago

> But in my experience, Apple PR does not lie. Do they spin the truth in ways that favor the company? Of course. That’s their job. But they don’t lie, because they understand that one of Apple’s key assets is its credibility. They’d say nothing before they’d lie.

microtherion 8y ago
"Saying nothing" is indeed an extremely common move for Apple PR. "An Apple spokesperson declined to comment" is such a proverbial reaction that it would be considered completely standard operating practice here.

Gokenstein 8y ago

What's more likely is someone on the inside of one of these companies was privy to the discovery, but not the follow up. I've been in such a situation myself where I was in the room during what LOOKED like a DDOS by Akamai 10 minutes after we got off the phone with them to turn down their CDN services. In much the same way as Apple is refuting this claim, after a few weeks of internal debate above our pay grade we decided we didn't see it and it didn't exist and therefore it didn't.

moduspol 8y ago

Perhaps these things aren't handled at the level of "company"? For a national security-related issue, you might just include the minimum number of people that need to know, which would naturally not include your PR team. Then when an article like this comes out, the PR team responds in exactly the way they would if it were an outright fabrication, which is what the goal would be.

dguaraglia 8y ago
Even though this could be the case (that the security team is under a gag order and the marketing/PR team don't know about it), I'm pretty sure a "no comment" response from security would signal the PR team to maybe downplay the whole thing. The active refusal is a bit too strong for just being a miscommunication.
- minxomat 8y ago
  NSL-type deals are explicitly denied. E.g. Apple wrote: > Finally, in response to questions we have received from other news organizations since Businessweek published its story, we are not under any kind of gag order or other confidentiality obligations.

wyldfire 8y ago

If the US files injunctions for relief, federal court (FISA) justices can probably compel you to do just about anything. Presumably the Bill of Rights still pertains and takes precedent. But it's not ludicrous to think that you could be compelled to issue a denial or not issue an affirmation of the public claims.

notatoad 8y ago
I'm pretty sure FISA has no relation to any of this.