The EU does not need to show that Apple is a monopoly to regulate it. That kind of thing is harder in the US because much of the regulation has been based on companies being seen as a monopoly. Different legal environment.
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple Fights UK's Demand for iCloud Data Backdoor
- Thread starter MacRumors
- Start date
- Sort by reaction score
As I said, these are simply coincidences that Apple’s 10 year thing lined up nicely with the EU demand. The iPhone was the only major device Apple hadn’t ported over, you’d think it’d be higher priority but nope.
Of course it can regulate companies however it sees fit. Doesn't mean the regulation is smart, fair, or a good idea though.
And so now UK users are not protected by ADP, making their data theoretically easier for the government to access. What happens when the USA or other countries makes the same demands, will Apple once again fold and remove ADP?
I feel the same way. Apple is an American company that does things via American laws. Of course other countries can do things differently but that doesn’t mean they should be able to regulate companies from other countries that are not causing harm or a threat to their citizens. In a world economy there has to be some understanding of this.
The UK was demanding that Apple kept the ADP AND gave them world wide access. Apple said "no" and turned off ADP for UK. It was a compromise, though I wouldn't call it folding. They stood up as much as their could.
The other route would have been for the UK to issue large fine or arrest employees. Apple would have had to leave the UK. At least this way, the public knows what their government is demanding.
Two things: If you sell in the UK market, you play by the UK's rules. Doesn't matter where your parent company sits. That is basic business. Second, the request came in because not causing harm or a threat to their citizens is exactly the issue here. You can argue the toss about who is right but there is a reason for the request.
LOL. There might appear to be a reason but let’s not forget, the UK needs Apple also. It’s a two way street. That is basic business. It’s not as simple as you think.
Again, you're getting it wrong.
ADP is an optional extra layer of protection that applies E2EE on extra categories of data, meaning only the owner of that data (the user) can access it via trusted devices. Apple cannot access it, even if they were served with a valid warrant.
SDP (Standard Data Protection) covers other categories, some are covered by E2EE, and some are not. Those that are not can be decrypted by Apple, and therefore are available to law enforcement agencies if Apple is served with a valid warrant.
It's all explained here: https://support.apple.com/en-us/102651
Right, now that's out of the way... Yes, removing ADP means Apple can decrypt data if required to do so via a warrant.
The thing you're getting wrong is that the UK government requested that Apple add a backdoor to their E2EE. If Apple had done this, the UK government would be able to decrypt any iCloud data for any user anywhere in the world. It wouldn't have mattered if the US government had asked for the same because a backdoor is never going to stay private and secret to a government. Hackers will find it and exploit it. Governments in countries you don't like, say China, would be able to access the data.
Adding a backdoor means effectively removing encryption.
Apple didn't do that, and they won't do that.
Right now, the UK government has to continue requesting specific data form Apple via a warrant. That's it. If Apple had added a backdoor they wouldn't have needed to bother. Imagine a UK law enforcement officer just randomly wandering through your data, finding something they think is illegal, then charging you with a crime.
Had Apple agreed to the backdoor it would set a precedent, and governments would start going after other E2EE systems, such as WhatsApp. Yeah, no more E2EE chats.
No, you are wrong here.
That is exactly what the UK demanded Apple do. From the article that broke the story:
The British government’s undisclosed order, issued last month, requires blanket capability to view fully encrypted material, not merely assistance in cracking a specific account, and has no known precedent in major democracies.
Does it? Apple funnels all of its profits into Ireland. It doesn't employ a huge amount of people in the UK. Would it matter if it vanished? Probably not.
Apple says it has 8,000 employees in the UK and supports 550,000 jobs. Also produces and incredible amount of tax revenue (that isn’t “all funneled to Ireland”) and has millions of users who would surely make their displeasure well known to an already unpopular UK government.
While I agree threatening to pull out of the UK over ADP, which is likely used by a single-digit percentage of Apple’s users, is probably counterproductive (and best left for the scenario where the UK says “that’s not enough, we need still need a back door”), the UK absolutely has a lot to lose here too.
Apple paid £9m in tax on a revenue of £1.1bn in 2021. That dropped to £800k paid in 2022. Given what we know of Apple's sky high margins, I'd say they were funnelling it all to Ireland.
Apple’s Irish arm paid €6.5bn in corporate income tax last year
Apple’s main Irish arm paid corporation tax totalling $7.871bn (€6.57bn) last year, well over three times more than the tech giant paid as recently as 2020.
www.independent.ie
Yup, still going to Ireland. At least they are paying something to somebody. It disappeared all into a legal and financial black hole until the EU tore Apple a new one.
You asked, "will Apple once again fold and remove ADP?" They didn't fold, and I explained that they didn't fold. So, sorry, but you asked a question of something that simply didn't happen. Apple did not fold.
I'm not sure why you quoted that. I explained what was demanded, and you're agreeing that that's what they demanded?
Last edited:
The most profitable and influential company in the world? I’m not just speaking about the UK government but its citizens also. Why would they want that at all?
The EU actually tore Ireland a new one, not Apple. They also created an insane legal justification to do so over Ireland's objections that it was not entitled to the money (because they actually weren't). Apple owes Ireland back taxes for profit not made in Ireland, that had already been taxed by and paid to the US. Great job, EU. No wonder Trump thinks you're stealing from the US, because in this situation, you did.Apple paid £9m in tax on a revenue of £1.1bn in 2021. That dropped to £800k paid in 2022. Given what we know of Apple's sky high margins, I'd say they were funnelling it all to Ireland.
Apple’s Irish arm paid €6.5bn in corporate income tax last year
Apple’s main Irish arm paid corporation tax totalling $7.871bn (€6.57bn) last year, well over three times more than the tech giant paid as recently as 2020.
Yup, still going to Ireland. At least they are paying something to somebody. It disappeared all into a legal and financial black hole until the EU tore Apple a new one.
I can't believe the mental gymnastics you went through to get to this conclusion. The sheer cheek that taxes on sales in the EU belong to the US.
Also, did Apple actually pay anything to the US government yet? Last I looked at this, Apple was squirrelling all this and other overseas income offshore until the US reduced its corporation tax.
It's not mental gymnastics. Apple was using the setup to delay paying American taxes on its overseas profits, not avoid paying taxes altogether. Ireland and Apple both still maintain Ireland had no right to that money (because in the reality-based world they didn't, a corrupt EUCJ ruling non-withstanding.) Why on Earth would you expect a non-resident company to owe taxes to Ireland on profits made outside of Ireland? You wouldn't. The company should be taxed in their home jurisdiction. Here's an old article that does a good job of explaining it if you don't want to take my word for it.I can't believe the mental gymnastics you went through to get to this conclusion. The sheer cheek that taxes on sales in the EU belong to the US.
Yes, they paid $38 billion in taxes to the US on that money in 2018. Now, the US government will have to cut Apple a check for $13 billion of that. Which is why I say the EU stole that money from Americans. Because they did.
I remember the whole scandal as it started and it was first mentioned in an Irish lawyers' forum, which was linked in the long Macrumors thread on this. Said lawyers were sucking air through their teeth at the legal fiction as the basis of Ireland's/Apple's deal, so the outcome was inevitable. It was a shameful attempt to scam the EU by using a loophole in Ireland's less than robust tax legislation. That loophole was in itself a breach of EU rules, which Ireland is legally bound to adhere to and the EU rightly came down on it.
That article you linked was superficial to a fault It seemed to think that because Ireland "did not want the money" that somehow this was a grab. The fact is, Ireland was always going to get that money one way or another. Had Ireland got away with not taking the EU's share of the tax, it would have had a substantially lower state balance to present to the EU and this would have tipped it into being a net recipient of the annual EU budget instead of a net contributor as was the case subsequently. This would have meant that in allowing Apple to ship all that profit to the US, Ireland would have provided Apple a state subsidy at the cost of other EU members and none to itself, which is in breach of competition rules.
This whole saga has been done to death but I take a dim view of any one who looks at what happened there and seriously posits that EU taxpayers should be subsidising Apple's shareholders.
Not as cut and dry as you make it - the EU’s second highest court thought the arrangement was completely fine. Should have been the end of it. But guess she knew the ECJ couldn’t turn down a big payout.
It absolutely is a grab. Ireland wasn’t entitled to the money any more than the US is entitled to tax all of IKEA’s Canadian and Mexican profits because their North American Headquarters is in Pennsylvania.
The ECJ’s ruling was an absurd overreach that tramples on Member states’ right to set their own tax policy, misinterprets state aid rules and rules that tax policy that applied to any company in Ireland was an illegal subsidy for Apple. There’s a reason all observers were flabbergasted when the ECJ ruled the way it did.
Retroactively voiding a sovereign nation’s tax policy like this (which again, is the prerogative of member nations, not the EU) will further chill tech investment in Europe. What company in their right mind is going to invest significantly in the EU when an extremely biased EU regulator can just come in after the fact and overrule a member state and retroactively demand the company pay more taxes?
But Vestager defenders will just continue to blame the EU’s inability to compete on Big Tech being anticompetitive - “no, our incredibly onerous regulations couldn’t possibly be the reason we’re not competitive - the Americans must be cheating”.
And I take a dim view of anyone who looks at the situation and says “Ireland deserves tax on a foreign company’s profit made outside of Ireland, not the foreign company’s home country.” They’re not subsiding Apple shareholders. They’re stealing from American taxpayers.
I think there is a bit of creative licence here. All observers? I think only some US ones.
Let's step back a bit here. Why would Apple go to all the trouble of setting up shop in Ireland if it were certain that all of its profits earned in the EU were not taxable within the EU? It could have gone anywhere or simply save a bit of money by operating directly from the US. The fact is, Apple knew it would have to pay corporation tax on its profits earned within the EU (single market) and so chose Ireland as being the least onerous as an umbrella headquarter on its EU operations. Had it not been for the single market, Apple would be dealing individually with Germany, the UK, Spain, Italy and every country in the EU with which it did business. Why you keep quacking on about "foreign company's profit made outside of Ireland" baffles me when you know full well the EU functions as a single market and Ireland is very much part of this market. A profit in the UK, Malta, Sweden etc is a profit attributable to its Irish head office. The buck stops there.
Perhaps "all observers" knew better. It took a poorly written piece of legislation from the Irish statute book, which didn't even begin to pass the smell test for Ireland and Apple to cobble together this shady deal to evade tax. A non-resident company, which happens to be resident in Ireland? Please...
Maybe have a word with your own IRS. It seems to think it is entitled to tax returns and payments from NON-RESIDENT US citizens on their NON-US income, regardless of how long they have lived outside of the US. See how tax regimes differ from country to country?
Literally every company which wants to expand into the EU market. I haven't seen any pull out yet because of corporation tax, have you? Apple was the only one with this shady deal. It is not a blueprint for how every US company conducts its business. If you want to look at government pressure, look at what China requires US companies, including Apple, to comply with. Hasn't stopped them chasing those yuans.
First of all, you're wrongly attributing other replies in this thread to be from me, when they are not.
and second, my point stands. The UK wanted backdoor access to ADP, and Apple apple refused and decided to remove ADP entirely, thus removing full encryption as an option for UK users. My point is that Apple folded and took away ADP because of a government request - what happens when the USA, China, or anywhere else, make the same demand? Will Apple just slowly pull back ADP from all its users until it no longer exists?
Personally I’d rather have the thing removed than have it reduced to security theater.
What the UK wanted was to replace ADP with security theater by inserting a back door. Apple could have complied, but that would have left UK customers with the illusion of security. It was much more honest to disable ADP entirely there. The fact that Apple is fighting the whole thing in the courts is to their credit, it seems to me; they are under no obligation to do so.
They didn't fold.
Read what you just wrote: "My point is that Apple folded and took away ADP because of a government request". The government request was to implement a back door into ADP. Had Apple implemented it, that would've been Apple capitulating/acquiescing/folding to the government request.
Removing ADP from the UK so the government has to get a warrant to access specific iCloud data is better than entirely removing the security of ADP for everyone everywhere by implementing a back door. That would've been folding.
I honestly don't understand why people think the opposite.
As to your other point, the USA doesn't want to implement a back door into ADP; they even questioned the UK government - and Keir Starmer, the PM - about why they were doing it.
And, should Apple remove ADP everywhere, then you're likely in the situation that those countries would also want to remove E2EE from other apps and systems. That would be the end of Signal, WhatsApp... And it would also mean no security for their own government systems and communications. It's not going to happen.
Good explanation. Sounds like a bunch of people who don’t understand or use ADP arguing about ADP.