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DOJ Says Apple iPhone Privacy Claims Are ‘A Diversion’

The Justice Department on Thursday accused Apple ( AAPL ) of deliberately raising technological barriers to prevent law enforcement officials from accessing data on its smartphones. The FBI is seeking Apple’s assistance to unlock an iPhone used by one of the two now-dead assailants in the Dec. 2 terrorist shootings in San Bernardino, Calif. It needs to bypass the iPhone’s security to see if the device contains data useful to the investigation. Apple has resisted a federal court order to unlock the iPhone, claiming government overreach. The company says it would have to write software that doesn’t exist to get around the security safeguards on its phones, effectively making it an agent of law enforcement. Once that software is created it could be used as a back door by hackers, criminals and spies, exposing customers’ personal data, Apple said. In its filing Thursday, the Justice Department said Apple and its supporters are trying to alarm the court with talk about network security and privacy. “That is a diversion,” the DOJ said. The court’s order is “modest,” “narrow” and “targeted” to a single iPhone, the filing says. “Apple deliberately raised technological barriers that now stand between a lawful warrant and an iPhone containing evidence related to the terrorist mass murder of 14 Americans,” the DOJ filing said. “Apple alone can remove those barriers so that the FBI can search the phone, and it can do so without undue burden.” The Justice Department criticized Apple’s argument that unlocking the iPhone would be an undue burden. “As Apple Inc. concedes in its opposition, it is fully capable of complying with the court’s order,” the DOJ said. “By Apple’s own reckoning, the corporation – which grosses hundreds of billions of dollars a year – would need to set aside as few as six of its 100,000 employees for perhaps as little as two weeks. This burden, which is not unreasonable, is the direct result of Apple’s deliberate marketing decision to engineer its products so that the government cannot search them, even with a warrant.” Last week, a host of technology companies and civil liberties groups filed legal briefs in support of Apple’s position. Companies backing Apple included Amazon.com ( AMZN ), Alphabet ’s ( GOOGL ) Google, Facebook ( FB ) and Microsoft ( MSFT ). The next court hearing on the case is set for March 22 in the federal court in Riverside, Calif. RELATED: Tech Rivals Unite To Support Apple In iPhone Privacy Case Vs. FBI

AT&T: FCC Privacy Proposal Puts ISPs At Odds With Facebook, Google

FCC Chairman Tom Wheeler proposed stricter rules to protect online consumer privacy on Thursday, cracking down on Internet service providers such as Comcast ( CMCSA ), AT&T and Verizon Communications. The Federal Communications Commission’s rules would require ISPs to obtain permission from customers before sharing Web browsing data with third parties, including business partners. While the Federal Trade Commission has rules to protect consumer privacy, the FCC says more regulation is needed. The FCC and Verizon ( VZ ) last week reached a settlement over the broadband and wireless-phone company’s use of “super-cookies” that provide subscriber data for targeted advertising. Verizon agreed to pay a $1.35 million fine. AT&T ( T ), in a blog post , said FTC regulation is sufficient and that the FCC could put broadband companies at a disadvantage while Alphabet ‘s ( GOOGL ) Google, Facebook ( FB ) and others track consumers. “Limiting ISPs’ ability to compete with ad supported business models — which are overwhelmingly favored by consumers — is bad for consumers and ultimately bad for broadband investment in this country,” wrote Bob Quinn, AT&T’s senior vice president, federal regulatory. “Time and time again, the FCC appears to want to place its thumb on the scale in favor of Internet companies and against the companies that invest in broadband infrastructure in this country.” Six telecom trade groups — including CTIA and the National Cable & Telecommunications Association — on Feb. 11 sent a joint letter to the FCC, asking Wheeler to hold off. The FCC will likely vote on whether to move ahead with Wheeler’s proposal at its March 31 meeting. After a public comment period, the agency could formally approve the rules by year-end. The FCC in early 2015 reclassified broadband services as a public utility, using Title II of the Communications Act of 1934. AT&T, Comcast and industry trade groups are challenging the net neutrality rules in federal court. A court ruling is expected in April. The FCC’s new consumer privacy proposal seeks broadband authority under Section 222 of the Communications Act of 1934. The FCC chairperson typically steps down after a new president takes office, but Wheeler hinted at a Senate hearing in February that he might seek to stay on.

Box Benefits From IBM Deals; More To Come With Microsoft?

IBM ( IBM ) is helping Box ( BOX ) notch some big deals, analysts say, and Box’s partnership with Microsoft ( MSFT ) could also provide a lift. Box stock gapped up 15% at the open in the stock market today , nearly touching a 14.62 buy point out of a cup base. But in morning trading Thursday, Box stock was up just 2.5%, below 13. The online data storage and file-sharing service provider late Wednesday posted a narrower-than-expected fiscal Q4 loss, as revenue growth of 36% topped expectations. Box said that it had closed 13 customer deals valued at more than $500,000 each in the three months that ended Jan. 30, up from nine such deals in the year-earlier period. Box also said that it had closed 66 deals valued over $100,000 each, up from 57 in the year-earlier period. “The IBM partnership showed early signs of traction with a few of the largest deals in the quarter,” said Richard Davis, an analyst at Canaccord Genuity, in a research report Thursday. Box partnered with IBM in June 2015 to develop new applications and jointly market products and services. The companies expanded their partnership in December. “Box beat fiscal Q4 estimates with continued momentum in enterprise, strong traction with IBM and better-than-anticipated upsales of (content management product) governance,” said Rob Owens, an analyst at Pacific Crest Securities, in a report. Box competes with Microsoft, though it’s now a partner for Office 365 products as well. It also counts as rivals Alphabet ’s ( GOOGL ) Google, privately held Dropbox, Amazon.com ( AMZN ) and others. At Credit Suisse, analyst Philip Winslow said in a report last week, “We remain encouraged by the growing traction of Box’s new products in addition to its partnerships with IBM and Microsoft.” Wrote Pacific Crest’s Owens: “We believe enterprise traction is improving as companies see a need for a unified content management platform across cloud applications, which is helped by technology integrations with Office365 and Salesforce ( CRM ).”