Image by John Ritter

Image by John Ritter

In the wake of the Snowden leaks in 2015, the New York Times dropped the bombshell news that one company had played a unique role in enabling the National Security Agency’s domestic spy program. The report, “AT&T Helped US Spy on Internet on a Vast Scale,” revealed the telecom giant’s “extreme willingness” to hand over billions of emails—revelations that galvanized Professor Nien-hê Hsieh and Senior Lecturer Henry McGee.

“Seeing a huge company in the middle of these privacy issues felt like something that we should talk about, particularly in Leadership and Corporate Accountability (LCA),” recalls McGee. They ultimately decided to focus on Apple, because of the company’s emphasis on consumer privacy, and their 2016 case, “Apple: Privacy vs. Safety,” addressed the federal government’s attempts to access data on the phone of a mass shooter in San Bernardino, California. Here, McGee and Hsieh discuss the evolution of the case and the conversations it has inspired, as well as the changing dimensions of the economic systems in which tech companies operate.

How did this case first come together, and what was the conversation you wanted to generate?
Henry McGee: It comes from the framework that is used in LCA, which asks students to consider the responsibilities of corporations: to shareholders, customers, employees, and society. After all, there’s no God-given right for corporations to exist. They exist because society lets them exist. So the question we wanted to ask students is, How does Apple balance its responsibilities to consumers and consumer privacy and, as a US-chartered corporation, what are its obligations to the government that makes its operations possible?

Nien-hê Hsieh: Pretty quickly, most students recognize the tightrope on which Apple found itself: It wants to promote a sense of privacy among its users, but that runs into some of the claims that the government is making against them with regard to public safety. I don’t think I would’ve anticipated this back in 2016, but what’s happened since then—and the revisions of the case reflect this—is that the issues in the Apple case have become core issues throughout the digital economy.

Initially, when we taught this case, we were talking about US government surveillance, whereas now many people worry about privacy in relation to companies. This goes to the impact on the economic ecosystem, where Apple allows users to prevent ad tracking. But for whom is this data actually useful? What’s interesting here is that the data benefit some of Apple’s competitors, like Meta. Increasingly, students have come to wonder how much of the privacy Apple is pushing is driven by a strategy to distinguish itself from its competitors. And the other issue, which further complicates things, is how Apple should deal with governments around the world that have different views around privacy regarding their citizens.

McGee: One of the joys of teaching this case in an HBS classroom—where one out of three students is an international student—is the different views of privacy they bring to that debate. And one of the things that we ask the students to wrestle with is the fact that there is no one government. If you’re Apple, and because you’re a US-based company you were to decide you’re comfortable sharing data with US government authorities, how comfortable are you sharing the data with the government in China? That’s a huge market for you. How can you say yes to the United States and no to China?

Hsieh: To complicate things, some of the concerns are different in Europe. Where to draw the line on sharing data with regard to tracking COVID-19 is part of the challenge for students, as it presumably was for Tim Cook as well.

The pandemic is covered in the update to the case published in 2023. How is that shifting the conversation?
McGee: The new version is going to be taught this year, and we’re asking students to focus on how Apple and Google managed a public health crisis, where literally millions of people were dying from COVID-19 around the globe. Was it okay for Apple to say to governments, No, we’re not going to share with you the private location information about people who may be infected?

Hsieh: We’ve kept the set-up of the case as privacy vs. safety, but the students have to develop a much more nuanced view. When is it appropriate—or even required—to protect user privacy? And are there instances in which it may be a questionable call? Given the example of COVID, and how Apple had to ascertain the legitimacy of government requests, the students will need to make some pretty substantive ethical distinctions on these points. That is, at least for me, one of the key learnings that we want for our students because, as the case demonstrates, these issues will continue, given the way the digital economy is moving.

What other tools can this case teach students, the Tim Cooks of tomorrow?
Hsieh: One of the key things is for students to develop a view of individual rights. What are the human rights that are sufficiently basic and broadly universal that, no matter what a government’s position or what the potential benefit to society is, ought to be respected? In this case, Apple could view it as appropriate—and perhaps even required—to protect privacy in order to help protect physical safety or even political freedoms.

The second set of tools concerns what you can do within a given legal environment. Students often don’t recognize how much discretion they have and what room there is for pushback. For example, in the San Bernardino case, it looked like Apple was resisting the government’s requests to unlock the phone of the mass shooter; but in effect, they were using the tools that were at their disposal—in the context of the law—to push back on the request. Understanding the nuance of the legal system that you’re in, and learning how to navigate within existing systems, is important.

And the third set, which is new for LCA: Until this point, in thinking about responsibilities to society, people have treated society as another corporate stakeholder. In LCA, we’ve been shifting that perspective to say, Actually, no, corporations are a part of society. They have no inherent right to exist, as Henry said. And moreover every CEO or employee is also a member of society. It’s important to ask the question, What kind of society do I want to live in?

McGee: Students are going to be constantly asked to make judgments, and the decisions aren’t black or white. Going back to the COVID situation, Apple and Google decided to get together and have a unified, tech-industry position so that governments couldn’t pull them apart. They decided to respond to the public health crisis by providing contact-tracing information that would be available to individuals, but they drew the line at providing direct, pinpoint location data to the government.

Hsieh: It may be the case that, in some societies, the views on privacy don’t rise to the level of basic human rights, as I mentioned before. In the United States, some people didn’t want their information shared, but people were fine with that in other countries. That kind of contextual awareness is a part of the toolkit that we want our students to use in thinking about these decisions. I also want them to think about who they are and their own personal commitments. In some situations, several courses of action may be morally permissible, and you have to make a choice among those alternatives. That’s where these personal commitments can come into play.

We’ve been teaching this case since 2016, and there are moments when I think we have the privacy issue under control, that we have a sense of what’s required, and we can put together legislation to deal with it. Then I fluctuate and think, no, the issues that we’ve identified in this case are only going to keep on growing in importance and complexity. Henry, I’m afraid you’re stuck with me.

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