5 Mar 2014

iPoo: Apple Directors Overrule And Reject Shareholder Proposal To Protect User Privacy

By Michael Krieger: Things at Apple seem to be going from bad to worse. From the company’s recent War on Bitcoin,” to the major security flaw impacting virtually all its hardware from iPhones to Macs, Apple hasn’t done a single decent thing since Steve Jobs died.
Worst of all seems to be the company’s cozy relationship with the NSA and a complete disregard for user privacy and security. In order to push back against such behavior, a group of Apple shareholders, led by Restore the Fourth SF national liaison David Levitt, put forth a SpyLockout resolution. Key to this resolution is the following commitment:
The Spy Lockout plan is simple common sense for any company truly committed to data security.  Adopt best practices for security and encryption, as recommended by experts like the Electronic Frontier Foundation. Keep third party equipment off our networks.  Investigate and stop invasions of user privacy.  And when cooperating with police, require a warrant of limited duration, for a specific person or thing, instead of bulk collection.
So what could be wrong with that? Well, apparently Apple directors found it so unacceptable that they decided to use their power to overrule the resolution.

Firedoglake did some excellent reporting on this story. They note that:

Cupertino — At Friday’s Apple shareholder meeting, Apple’s directors overruled an urgent, popular shareholder resolution entitled Spy Lockout, aimed at improving security and keeping NSA surveillance and other intruders out of Apple’s products and systems. The same morning, Apple co-Founder Steve Wozniak endorsed the SkyLockout initiative.
Apple had quietly advised shareholders in its January 10, 2014 Proxy Statement that directors Bruce Sewell and Peter Oppenheimer would exercise their discretionary voting authority — their ability to cast votes for on behalf of shareholders who toss their voting forms in the trash — to defeat the proposal, without citing any reason.
The proxy statement does not refer to the proposal as “Spy Lockout” but as a “Floor Proposal” that “if approved, would, among other things, ask the Board ‘to enact a policy to use technical methods and other best practices to protect user data.’”
Apple gave no indication why it would vote against a resolution to follow best practices recommended by industry technical experts and the Electronic Frontier Foundation to protect users.
Apple has likewise been conspicuously silent about a very serious internet security flaw, increasingly referred to as GoToFail, that was on all Apple mobile devices running iOS 6 or iOS 7 from September 2012 until last Friday, February 21st 2014, and which was on all Macintosh laptops and desktops running Mavericks OSX until the Tuesday before the meeting.  Apple has received growing criticism that, while it has now released upgrades that resolve the flaw, it has not alerted users or provided any info describing how GoToFail may have compromised their data. The flaw allows any machine on the same network as an Apple customer to impersonate any site, whereafter the Apple user may then enter password information or unwittingly hand over control of their machine.
Some have even speculated that this Apple “flaw” was part of a program of voluntary participation with the NSA.


Experts on Apple and security have noted that within weeks of GoToFail’s silent introduction in 2012, the NSA reported internally that Apple had joined the PRISM bulk surveillance program providing “direct access” to Apple users’ data. These experts could not rule out complicity by Apple, perhaps under gagged National Security Orders. Although National Security Letters were ruled unconstitutional in March of last year, Apple privacy officer Jane Horvath refused to answer whether it is still cooperating with new orders. Apple’s most recent transparency report says it may have cooperated with more than 200 such requests just between January and June of last year. 

This resolution, presented by Apple shareholder and Restore the Fourth SF national liaison David Levitt, was received warmly by shareholders present, earning a rare round of applause, as did the a Human Rights Committee resolution that was also overruled.
While Bloomberg reported Apple Investors Reject All Shareholder Proposals, it misleadingly reported that shareholders had overwhelmingly rejected the proposal. But in fact under the unusual Floor Vote procedure for Spy Lockout, when Apple estimated the vote tally, the only shareholders who had voted against Spy Lockout were Apple directors – through their discretionary power to cast votes on behalf of shareholders who had tossed their ballots in the trash and did not attend the meeting.
Apple co-founder Steve Wozniak was a strong supporter of the resolution and provided the following statement:
“Apple should defend the constitution – especially when the government won’t.”
Steve has criticized the NSA before, as I highlighted in a post titled: Apple Co-Founder Steve Wozniak Discusses The Constitution, NSA Spying and Torture. 
What a sad disgrace Apple has become.
Full article from Firedoglake here.
In Liberty,
Michael Krieger


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X art by WB7

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