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The economics of back doors

Todd Bell | Feb. 24, 2016
The debate between Apple and the FBI has become a major national public issue. The key component missing from this debate is the economic impact to US corporations and the US economy.

The CEO of BlackBerry refused to cooperate and was going to shut down BlackBerry operations in Pakistan. BlackBerry stood its ground and won a victory with the Pakistani government as the government rescinded its shutdown order. The Pakistani government came to terms that if BlackBerry was forced to leave the country, the move would have affected thousands of enterprise customers in the country and cause a negative financial impact.

When we look at other mobile phone makers, Apple is the only mobile phone manufacturer in the United States. Other phone manufacturers are mostly based out of Korea, China, and Canada. If the US government is going to force a "backdoor" on Apple devices, then to be fair, they should be enforcing a "backdoor" on other mobile phone devices as well.

We know the US government would not be successful forcing China to install a "backdoor" on all of the mobile devices made in China and expose its citizens and government officials to the US government. This puts Apple in a very unfair competitive situation where BlackBerry, Samsung, LG and other mobile device makers would thrive at the demise of Apple because they are headquartered outside the USA.

Right now, if the US government forces Apple to have a "backdoor," Apple may become the most "shorted" stock in US history as other mobile device makers outside of the US will thrive. The US government would have to convince foreign country governments to install "backdoors" that would expose mobile devices to unfriendly governments and hackers. We know the US government would not be successful at this request as this flies in the face of capitalism.

Imagine if Apple was forced to have a "backdoor" in its software as the US government tries to use the terrorism threat to strong arm tech companies into providing "backdoor" access to its devices. Would this also happen for other US tech companies such as RSA, Microsoft, Cisco, Google, Symantec, Oracle, Facebook, Palo Alto Networks, HP, IBM, Hitachi, Computer Associates, etc. that make encryption software and technologies?

The US government needs to be more practical and pragmatic at considering the financial consequences and business impact it would have to start installing "backdoors" into successful mainstream US made encryption technology. US corporations would lose significant global market share for trying to sell its products in foreign markets, because what foreign company would want to risk their intellectual property to a product that contains a "backdoor."

The US government would place a foreign corporation in jeopardy if the decryption passcode was ever lost in addition to allowing the US government to spy on a foreign corporation and would be exposed to hackers. These foreign companies would seek other companies that sell tech products that don't have "backdoors," because they need privacy and security for the product/service that they are producing.

 

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