Apple Inc. (NASDAQ:AAPL)’s Refusal To Backdoor Access May Call Fines Like Yahoo! (YHOO) Incurred In 2007


Apple Inc. (NASDAQ:AAPL) is fighting an attempt by the government to force it to surrender some data relating to iMessage. Although the company may have valid reasons to refuse to comply with the government on the surveillance demand, it risks being slapped with heavy financial sanctions. Yahoo! Inc. (NASDAQ:YHOO) is an example of how bad things can get in the contest with the government over data access.

The data being demanded from Apple Inc. (NASDAQ:AAPL)’s iMessage relates to a criminal case that is currently under seal in a U.S. federal court. Apple is refusing to allow the government access to its data on the grounds that the request is impossible to meet. The company claims that iMessage is encrypted, which makes it impossible even for the company itself to access the data if it needed to.

No access

Because the iMessage system cannot be penetrated by either Apple or the fed, the company is telling the government that the only way out is to obtain the required data directly from the suspect. Nevertheless, some analysts have cited that the data security around iMessage is not beyond breach. They say that there are loopholes that can be exploited to tap iMessage data.

$250,000 daily fine

If the fed feels that Apple is able to implement its request but is simplify refusing to do it, the company risks fines. Nearly a decade ago, Yahoo also stood its ground against participating in a data harvest program promoted by the government. The battle with the government over data escalated to the point that Yahoo was faced with a daily fine of $250,000.

It is not clear whether Apple Inc. (NASDAQ:AAPL)’s issue has also escalated to FISA Court, but analysts believe that the strategy of financial sanctions that were used against Yahoo could be applied to it. As such, as much as Apple may want to stand its ground, there comes a breaking point.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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