Apple’s dispute with FBI echoes antitrust case against Microsoft
Instead of a monopoly, government is focused on a single iPhone
Long before Apple and the Justice Department squared off over the contents of an iPhone, there was another cataclysmic clash between the feds and a tech behemoth.
It was Microsoft, in the late 1990s and early 2000s, that rattled legal sabers with the Justice Department over antitrust charges against the software giant. The government won a trial victory calling for the breakup of Microsoft, which was upheld on appeal. An appellate court, however, overturned the decision and sent it back to the trial court. The administration of President George W. Bush settled the case.
The antitrust case is vastly different from the hacking action sought in the FBI-Apple standoff. Back then, the government yearned to break up what it called a multibillion-dollar, multinational monopoly. Today, it is focused on a single iPhone, though Apple and privacy advocates are leery of the FBI’s motives and, indirectly, its impact on their businesses.
What happens in Apple-FBI is anyone’s guess. But given the parameters of the case — which pits the government’s request for information on the iPhone used by San Bernardino shooter Syed Farook for national security reasons, vs. Apple’s hard stance on civil liberties — offers one crucial parallel with the Microsoft case, legal experts say.
“Microsoft’s defense was the government cannot tell us how to design our products,” says Harvey Anderson, chief legal officer for computersecurity company AVG Technologies. “With Apple, this is also about the government telling a company how to design its products — in this case, a backdoor to allow the FBI to hack a shooters’ iPhone.”
The stakes are different, but nonetheless they run deep and wide economically and socially, Anderson and others say. In the antitrust case, the government argued it was trying to help consumers with more choice, vs. the Apple case, where Apple and its defenders contend the govern- ment, if successful, would jeopardize the personal information of iPhone customers worldwide.
While the Microsoft case was intended to aid start-ups reluctant to enter the same markets, the Apple-FBI case hangs over heavily data-driven start-ups, whose future funding and business plans may be altered by a government victory.
“The ramifications of the gov- ernment winning this is fairly widespread,” says Jeff Fagnan, general partner at venture capital firm Accomplice. Tech start-ups, he says, would re-evaluate how they pitch investors and develop products and services.
Antitrust actions against Microsoft and telecoms reflected a different era, before social media and mobile devices spawned hundreds of start-ups in the post-Microsoft era and data became the “oil” of tech, says Crawford Del Prete, principal analyst at market researcher IDC. Until the 1990s, tech’s power and market was concentrated in few companies, before the advent of the mobile and social media ages.
The mobile and social media era has begat Facebook, Google and thousands of other companies, where personal information is their lifeblood. In this land- scape, the legal battlefield is over data, and who has access to it, which was underscored by Edward Snowden’s bombshell disclosure of digital surveillance by the National Security Agency in 2013.
Indeed, Microsoft is squarely in Apple’s corner against the federal government. Microsoft President Brad Smith told Capitol Hill lawmakers Thursday that his company would file an amicus brief on behalf of Apple. Google, Facebook and Twitter are part of a coalition that will file unsolicited amicus briefs for Apple.
While Google, Facebook and Twitter have staunchly defended Apple and — indirectly — themselves, phone companies are, understandably, quiet on the matter.
Telcos, heavily regulated since the 1930s, “see themselves as an extension of the government” and complied with the NSA, according to Neil Richards, a law professor at Washington University. “Their thinking is: What’s good for America is good for business, and vice versa.”
Leslie Berlin, historian for Silicon Valley Archives at Stanford University, portrays a wary, “seesawy” relationship between the valley and the Beltway. “Silicon Valley has seen itself under siege a number of times but usually around international competition (the 1980s and intense competition from Japan),” she says. Apple’s case, she says, is an anomaly.
“So much about this case is new,” says Susan Freiwald, a professor at USF School of Law in San Francisco.
With so many legal twists and turns expected in Apple’s feud with the FBI, the outcome of the case could go in a “million” directions over months — if not years, says Larry Downes, project director at the Georgetown Center for Business and Public Policy.
“This started secretly between the two sides and may end up being resolved secretly,” Downes said. “Because the process is like making sausage, it can be ugly.”
“This started secretly between the two sides and may end up being resolved secretly. Because the process is like making sausage, it can be ugly.”
Larry Downes of the Georgetown Center for Business and Public Policy