Spylockout at the Apple Shareholder meeting

Spylockout at the Apple Shareholder meeting

On Friday, February 28th at its annual Shareholder meeting, Apple’s directors rejected an urgent Floor Proposal from shareholders that Apple itself calls a policy to use technical methods and other best practices to protect user data.

The same proposal, known as Spy Lockout, would also have helped protect innocent Apple users from Russian, Chinese, British and NSA spies. Apple rejected it all without a word of explanation.

This was just 3 days after Apple’s GoToFail internet security flaw, revealed by others – which left Apple customers vulnerable to fraud – was fixed after more than a year. Apple won’t comment on how this may have effected its customers — and who might still have their data and passwords.

Apple shareholders everywhere are asking: “Why doesn’t Apple believe in best practices to protect user data ?”

Is the GoToFail internet back door due to Worst Practices, Second Best Practices, or something else?

Now even Apple founder Steve Wozniak is asking how Apple’s current lax security policy could be good for Apple’s customers, its worldwide business or its shareholders.

Apple has approved the following proposal for discussion at its February 28, 2014 shareholder meeting in Cupertino. Spy Lockout was developed by Apple shareholders, developers, users, and employees, with advice from Electronic Frontier Foundation attorney Kurt Opsahl, encryption expert Bruce Schneier, Lavabit attorney Ian Samuel, and EFF founder John Gilmore. The shareholder raising it, David Levitt, will be given 2 minutes to speak. The shareholders present will vote. More important, we expect Apple to answer and implement the proposal without waiting for a binding order from all shareholders, to prevent the continuation of serious long-term harm to the company.

Letter to the General Counsel

General Counsel Bruce Sewell

Apple Inc.

Re: Advance Notice of Shareholder Business

Dear Mr. Sewell,

Over the course of 2013, new information regarding the relationship between
government surveillance and private corporations have impacted Apple’s public image in ways
that concern me as an investor. I hope you understand this is not a frivolous or unique interest of
mine, but one that is shared by many other shareholders. We are deeply concerned by Apple’s
failure to publicly renounce and take all necessary steps to prevent these violations. Some
shareholders have already retreated from their prior stake in Apple.

Courts have already ruled (at times secretly) that misrepresentation and over-collection of
data by government agencies has been ongoing. Court orders and warrants requiring Internet
Service Providers to enable violations of all their users’ privacy are issued, in secret, with gag
orders. SSL security keys are compromised, stolen, or coerced from executives and engineers.

Meanwhile, as of 5 November 2013, Apple has vowed maximum transparency within the
law. We commend Apple’s new approach and welcome this significant progress.

But thus far Apple has declined to say definitively whether it has already received court
orders that, for example, allow equipment to be installed at Apple premises that might be in use
by bulk surveillance programs – putting up to 350 million iCloud users’ data in jeopardy. In this
context it is reasonable to conclude that governments have already requested such cooperation
from Apple, under gag order, holding Apple staff and/or executives hostage.

This crisis of trust in US companies has already seriously injured international
technology firms like Cisco.

Resolving this cannot wait another quarter – let alone another year – without serious
injury to Apple. We wish to present this issue, and we welcome alternatives put forward by
Apple that might help effectively resolve these threats to customer and investor confidence.

In the event there is insufficient response by Apple, we will submit a proxy shareholder
proposal that may compel Apple to act belatedly in 2015.

Please contact me as soon as possible if you have any questions or concerns. I look
forward to attending the Annual Meeting to raise this issue.



A group of concerned Apple shareholders proposes several technical and policy actions
Apple should take immediately, without waiting to be compelled by shareholders, to quickly earn
back user trust and demonstrate Apple’s competence in repelling modern threats to user privacy.

We ask that the board enact a policy to use technical methods and other best practices to
protect user data. Such best practices include:

    • Encryption: Implement encryption techniques such as Forward Secrecy and the other
      recommended best practices cited in the Electronic Frontier Foundation’s recent reports
      on encryption.
    • SSL Key Revocation: Revoke and update SSL encryption keys and any similar digital
      entities that may have been compromised, immediately and as often as necessary for the
      security of user data.
    • Secure Network Equipment: Remove or replace any equipment that may be used for
      unconstitutional bulk surveillance at sites managed by Apple, to every legally permissible
      extent. Third-party equipment, such as interception devices installed in compliance with
      “pen trap and trace” orders, should provide access to confirm the devices can not be used
      for unconstitutional bulk collection or over-collection of data. If any court order or
      warrant must be withdrawn or revised to achieve this, Apple may seek relief from the
      courts – such as FISC courts that have already discovered systematic over-collection of
      data and ruled some programs unconstitutional – in the course of legally removing such
    • Transparency: Expand deployment of measures such as the “warrant canary” and “dead
      man switch” so users can be confident that Apple networks and encryption keys
      have not been compromised – or can be alerted if they are.

Moreover, as a U.S. company Apple has constitutional and ethical duties that include
respecting the 4th Amendment.

Apple should, to the full extent permissible by law, deploy its strengths in both
technology and law to publicly reveal, challenge, reduce, and overturn every government attempt
at covert surveillance against its customers that doesn’t meet these standards: surveillance of
single, identified individuals under a warrant issued by a neutral judge, particularly describing
the person and places to be searched, and of limited duration. To the full extent permissible by
law, Apple should not actively or passively agree to do or allow covert mass surveillance against
its customers, nor remain silent about what Apple and the government have done or are doing.

Lost trust will not be regained until Apple users and shareholders understand whether
Apple is a paid participant in unconstitutional bulk surveillance, a hapless victim of it, a gagged
hostage of government spies, badly in need of help – or, whether Apple is truly an effective foe
of such surveillance.

For stewards of user data like Apple, both ethical standards and user trust are essential to
sustaining shareholder value. Failing to acknowledge and address these realities can cause the
company serious ongoing financial harm, particularly in international markets. Conversely,
by addressing these issues forthrightly Apple can win back the trust of customers, provide
leadership, offer competitive advantages, and strengthen the entire industry.

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