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APPLE INC.

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Barr's Encryption Push Is Decades in the Making, But Troubles Some at FBI

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01/17/2020 | 05:45am EST

By Sadie Gurman, Dustin Volz and Tripp Mickle

WASHINGTON -- When Attorney General William Barr returned to the Justice Department last year, law-enforcement officials briefed him on how encryption and other digital-security measures were hindering investigations into everything from child sex abuse to terrorism.

Mr. Barr was surprised and puzzled, according to people familiar with the meeting. The government was struggling with similar problems when he first served as attorney general nearly 30 years ago, he told advisers. Why had they not been solved?

With a series of speeches, a sharply worded plea to Facebook Inc. Chief Executive Mark Zuckerberg and, now, a direct challenge to Apple Inc., Mr. Barr has intensified a long-running fight between law enforcement and technology companies over encrypted communications, potentially setting up a showdown with Silicon Valley. Some agents at the Federal Bureau of Investigation also worry his forceful approach could sour valuable relationships they have fostered with technology companies.

Mr. Barr is disturbed not only by the potential harm that encryption technologies can cause law-enforcement investigations but also by what he sees as tech companies' ability to essentially defy court orders, people close to him said.

He views the current conflict as similar to one that was emerging when he led the Justice Department in the early 1990s, they said, when law enforcement's wiretapping efforts were disrupted by newly emerging digital technology.

Some within the department have praised Mr. Barr, who is also a former top telecom lawyer, for prioritizing the issue and calling on Apple to help the government unlock two iPhones belonging to a Saudi aviation student who killed three people at a Navy base in Pensacola, Fla. He said authorities had secured a court order within a day of the Dec. 6 shooting allowing them to search the phones but hadn't received substantial help from the technology giant.

An Apple spokesperson disputed that characterization, saying the company's "responses to their many requests since the attack have been timely, thorough and are ongoing."

"We don't want to get into a world where we have to spend months and even years exhausting efforts when lives are in the balance," Mr. Barr said at a news conference on Monday. "We should be able to get in once we have a warrant that establishes that criminal activity is probably under way."

The FBI said its technical experts agreed that further outreach to Apple was needed after efforts to access the phones were unsuccessful. Mr. Barr and FBI Director Christopher Wray have been publicly in lockstep. FBI Deputy Director David Bowdich, who joined the attorney general on Monday, said he wanted to echo Mr. Barr's points about law enforcement's struggles with encryption. But notably, Mr. Bowdich also highlighted the FBI's partnerships with tech companies.

Some senior FBI officials say privately they are worried that Mr. Barr's sharp tone could undermine relationships with technology companies they have worked hard to develop, people familiar with the matter said.

The bureau relies on close partnerships with tech firms in a range of investigations, with companies complying with legal requests for data and troubleshooting technical obstacles that agents may struggle with, current and former officials said. Large tech firms also are frequently victims of crimes with national-security or counterintelligence implications, including cyberattacks and employee espionage, and law-enforcement agencies want those companies to report such issues, the officials said.

Some FBI officials were stunned by Mr. Barr's rebuke of Apple, the people familiar with the matter said, and believe the Pensacola case is the wrong one to press in the encryption fight, in part because they believed Apple had already provided ample assistance to the probe.

The question for FBI officials is always whether a public spat with a major technology company is "worth the cost in terms of time, effort and damage to the FBI's relationship with the tech sector," said former FBI general counsel Jim Baker, who was involved in a high-profile 2016 clash with Apple over a locked phone also belonging to a dead terrorist. The standoff was resolved when a contractor hired by the bureau was able to get into the phone.

Apple, too, was surprised by Mr. Barr's stance and is strategizing about its next steps, including the possibility of a legal fight, according to a person familiar with the matter.

Senior Justice Department officials said they view their push as a necessary step in investigating the Florida terrorist attack. The gunman's locked phones could offer valuable clues about whether he conspired with others overseas, they said.

Mr. Barr became the top lawyer at a big firm -- GTE, now Verizon Communications Inc. -- in 1994, when Congress passed the Communications Assistance for Law Enforcement Act, requiring telecom companies to enable their services and equipment to comply with law-enforcement surveillance requests. He has said he finds it absurd that tech companies would be exempt from such rules.

Based on his experience in telecom, Mr. Barr said in July, he reserves "a heavy dose of skepticism for those who claim that maintaining a mechanism for lawful access would impose an unreasonable burden on tech firms, especially the big ones."

Mr. Barr and other department officials have given little public indication of their next move. The administration has begun discussing ways to solve the problem through legislation, Mr. Barr said.

Administration officials have an ally in Sen. Lindsey Graham (R., S.C.), chairman of the Senate Judiciary Committee.

"You're going to find a way to do this or we're going to do this for you, " Mr. Graham told tech companies at a hearing late last year.

While lawmakers of both parties have been openly critical of Apple, there is little indication of broad bipartisan interest in mandating government access to encrypted communications.

Apple CEO Tim Cook has recently amplified the company's defense of privacy, touting it in ads. The public's understanding of privacy and encryption issues has deepened, too, in the wake of hacking scandals. And any court challenge the Justice Department makes to Apple's policies risks a decision that makes it even harder for the department to gain access to phones.

"There's a risk that you wind up with a situation worse than the status quo," said Michael Chertoff, a former secretary of the Department of Homeland Security and co-founder of a strategic advisory firm that has worked with tech companies, including Apple, on security issues.

Mr. Chertoff said a court ruling against the Justice Department could limit access to widely available forensic tools that allow investigators to get into phones in some situations, for instance. "It's not clear to me why this fight is advantageous to anybody," he said.

Write to Sadie Gurman at sadie.gurman@wsj.com, Dustin Volz at dustin.volz@wsj.com and Tripp Mickle at Tripp.Mickle@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. 0.02% 324.95 Delayed Quote.10.66%
FACEBOOK 0.49% 214.18 Delayed Quote.4.35%
VERIZON COMMUNICATIONS -0.24% 58.51 Delayed Quote.-4.71%
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Financials (USD)
Sales 2020 285 B
EBIT 2020 71 085 M
Net income 2020 60 744 M
Finance 2020 84 092 M
Yield 2020 0,98%
P/E ratio 2020 23,3x
P/E ratio 2021 20,7x
EV / Sales2020 4,69x
EV / Sales2021 4,33x
Capitalization 1 422 B
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Mean consensus OUTPERFORM
Number of Analysts 43
Average target price 334,61  $
Last Close Price 324,95  $
Spread / Highest target 23,1%
Spread / Average Target 2,97%
Spread / Lowest Target -41,5%
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Managers
NameTitle
Timothy Donald Cook Chief Executive Officer & Director
Arthur D. Levinson Chairman
Jeffrey E. Williams Chief Operating Officer
Luca Maestri Chief Financial Officer & Senior Vice President
Kevin M. Lynch Vice President-Technology
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1st jan.Capitalization (M$)
APPLE INC.10.66%1 421 812
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XIAOMI CORP--.--%40 490
WINGTECH TECHNOLOGY CO.,LTD31.98%19 642
FITBIT, INC.-2.28%1 684
MERRY ELECTRONICS CO LTD--.--%1 032