The FBI’s request for Apple to provide a ‘back door’ entry to the phone of San Bernardino terrorist Syed Rizwan Farook has since sparked an international debate over data privacy, with companies such as Facebook and Twitter joining Apple in standing against the US government. If Apple continues to refuse the FBI’s request, the case could end up in the US Supreme Court, setting a precedent for all handling of personal data. Two of the US’s more powerful bodies are going head-to-head in a public battle – but what is at stake for the average iPhone user? What is the FBI requesting? Essentially, the FBI wants Apple to create a new operating system to install on Farook’s phone, altering the System Information File and creating the ability to bypass the traditional iPhone security measures. Apple say that the FBI is asking for a ‘back door’ into the iPhone, something that – once created – could be used by hackers on any iPhone, not just Farook’s. The new software will prevent the phone from erasing itself after more than 10 password attempts, and automate the process for trying out passcode combinations – meaning that the FBI have the power to break the code on the phone. The FBI argue that the SIF will only work on Farook’s phone, and will be known only by Apple, who could choose to destroy it. Apple’s argument Back doors are a big deal in security, and once one is created it will be far easier for it to be stolen or replicated. Apple argue that there is no way to control its use once it is made, and therefore complying with the FBI’s demands risks exposing the data of every iPhone user. Apple says introducing a back door into the iPhone wouldn’t just make Farook’s phone insecure and accessible to the US government – it could make every iPhone vulnerable. In a statement published on their website earlier this week, CEO Tim Cook said: “The government is asking Apple to hack our own users and undermine decades of security advancements that protect our customers — including tens of millions of American citizens — from sophisticated hackers and cybercriminals. The same engineers who built strong encryption into the iPhone to protect our users would, ironically, be ordered to weaken those protections and make our users less safe.” “While we believe the FBI’s intentions are good, it would be wrong for the government to force us to build a backdoor into our products. And ultimately, we fear that this demand would undermine the very freedoms and liberty our government is meant to protect.” Reactions to the debate Several privacy experts have warned that, should the US government win this case, it will set a precedent and enable other – perhaps more authoritarian – governments to do the same; inherently risking the data privacy of citizens globally. Senator Ron Wyden of Oregon, a leading legislator on privacy and tech issues, warned the FBI against their demands: “This move by the FBI could snowball around the world. Why in the world would our government want to give repressive regimes in Russia and China a blueprint for forcing American companies to create a backdoor?” Wyden told the Guardian. Facebook and Twitter have both since stepped in to side with Apple, with the FBI, both saying that they “stand with Apple” and will “aggressively fight” attempts to weaken encryption. “We condemn terrorism and have total solidarity with victims of terror. Those who seek to praise, promote, or plan terrorist acts have no place on our services,” Facebook said in a statement Thursday. Jan Koum, the creator of Whatsapp – which also uses encrypted data – has said: “We must not allow this dangerous precedent to be set. Today our freedom and our liberty is at stake.” Edward Snowden, whose revelations about US government spying provoked Apple’s stance on passcode-protected data, said the FBI was “creating a world where citizens rely on Apple to defend their rights, rather than the other way around”. Effects of the case Should Apple continue to refuse to comply – which is likely – the case will be passed onto the District Court and, if there is no resolution, could end up in America’s highest court. America’s rulings have a significant influence on events globally and, should the FBI be allowed to hack their citizens phone, it ultimately sends the message to other governments that this is acceptable practice and the security of citizens data could well be compromised.

Miranda Wadham on 19/02/2016

As an in-out referendum on the EU draws closer and influential figures from businesswoman Karren Brady to fund manager Neil Woodford weigh in on the debate, the uncertainty over Britain’s future is being felt on the currency markets. The Great British Pound has dropped significantly against both the dollar and the euro since the start of the year – but what will happen to Britain’s currency if the country votes for a ‘Brexit’? Last year’s Scottish referendum gives us some clue as to how the Pound may be affected. In the run-up to the election the Sterling exchange rate sank as the fate of the UK appeared unstable, with the pound falling nearly 4 percent against the dollar over 10 days. As uncertainty takes hold, the exchange rate is likely to do the same in this referendum, seeing significant volatility – as we have already started to see. If the UK votes to leave the EU, the exchange rate will undoubtedly be affected by whether or not the UK’s economy can hold up on its own. The latest figures from Open Europe estimate of the impact of Brexit ranging between the UK being 2.2 percent of GDP worse off in 2030 if it leaves and reverts into protectionism; to UK being 1.6 percent of GDP better off in 2030 if it leaves and pursues economic liberalism. It continues: “In reality, the UK may fall somewhere in between, with the most realistic scenario ranging from -0.8 percent of GDP to 0.6 percent. This means that Brexit is a more finely balanced calculation than most previous studies have concluded.” So, should the UK’s economy be relatively unaffected by the exit, rates could recover relatively quickly. However, if our economy takes a hit, we’re looking at a longer period of volatility. Whatever the case, in the immediate aftermath, Pound Sterling or the Euro exchange rates would be likely to sink and may remain vulnerable for some time. Bank of America Merrill Lynch has recently published a warning over the Pound’s rate should the UK vote to leave, especially in the short term: “In our view there would be serious economic fall-out for the UK in the short- and long-term if voters choose to leave the EU. Many contingent factors are likely to play a role: any exacerbation of refugee issues could help ‘pro-outs’, while any strengthening in the European economic recovery may support ‘pro-ins’.” It is clear that, whatever the result of the referendum, the Pound is entering a period of uncertainty – which may be severe enough to require the Bank of England to introduce fresh stimulatory measures, as opposed to raising rates like the Federal Reserve. The industry as a whole seems to be bracing itself for a volatile period – Standard and Poor’s have changed its sovereign credit outlook on the UK from stable to negative, while the Confederation of British Industry cut its 2015 growth forecast from 2.7 percent to 2.4 percent – both of whom said uncertainty over the referendum was a deciding factor.

Miranda Wadham on 18/02/2016