Bag and keys

Source Def Apple

Apple According to confidential documents obtained by CNBC, the United States is providing customer support for its plans to convert iPhones into digital ID cards.

Encouraging states to issue certificates and maintain service systems, hire project managers to respond to Apple requests, market new features widely and implement them with other government agencies, all at the expense of taxpayers, under four signed contracts. States.

Apple It was announced in June Users can store recently issued government-issued ID cards in the iPhone’s Wallet app and charge customers a more secure and convenient way to present credentials in a variety of settings. The feature can reduce fraud when combined with Apple’s biometric security measures such as Face ID.

However, the move raises questions from industry observers as to why local officials are monitoring the identities of citizens and giving them $ 2.46 trillion to a private corporation. Beyond that, identity is drawn into powerful mobile devices. Threat Privacy experts on the risk of dystopian scenarios involving surveillance.

The agreement between Apple and Georgia, Arizona, Kentucky and Oklahoma in Cupertino, California, provides a glimpse into the powerful company’s relationship. Apple is known for it Obsession In secret. Typically, partners are forced to sign unofficial agreements to prevent the documents from being made public.

‘Only Decision’

A 7-page memorandum from CNBC and other sources, based on public record requests, shows that Apple has extensive control over government agencies responsible for issuing ID cards.

Georgia and Arizona will be the first states to issue driver licenses on the Wallet app, but have not yet launched their programs. Contracts obtained are the same in all states, but CNBC has not reviewed agreements with Connecticut, Iowa, Maryland and Utah, and the other four states. Registered for Apple Digital ID Program.

Apple has a “single decision” for key features of the program, what devices will be compatible with digital IDs, how states should report the performance of the effort, and when the program starts, according to the documents. . Apple has reviewed and approved the transaction required by regions.

The flexibility is similar to the way Apple interacts with suppliers, although states should bear the financial burden of managing the programs instead of paying Apple. Jason MikulaFintech consultant and newspaper writer who won some contracts.

“As a seller relationship, it doesn’t make any sense to me because they are the only states that control what they give to Apple, and they can probably negotiate a more equal deal,” Mikula said in an interview. “I do not know of any other example of government-owned systems and identity cards being used for commercial purposes in this way.”

Apple declined to comment on this article. Representatives from Georgia, Arizona, Kentucky, and Oklahoma did not immediately respond to requests for comment.

Along with the digitalisation of industries from finance to entertainment, there is pressure to create more sophisticated digital identification systems around the world. But efforts in Singapore, France, Germany and China will be implemented nationally, not privately. Philip FanProfessor at Jones Hopkins Carey Business School.

Apple control

It is clear who is in the driver’s seat in the contract.

Apple has asked states to comply with international safety standards for mobile driver licenses. Apple played an active role in the development of the rankings in September.

According to the documents, states must agree to allocate sufficient manpower and resources (eg staff, project management and financial support) to launch the program within the timeline set by Apple.

“If requested by Apple, the agency will appoint one or more project managers (s) responsible for responding to Apple’s requests and program-related issues,” the contract states.

Every time a citizen receives a new or replacement ID card, they must agree to the “Active” feature of the new feature and to accept Apple’s digital IDs at no additional cost.

States should encourage new IDs such as Internal Revenue Service, state and local law enforcement agencies, and “key stakeholders in the federal and state governments” and “critical businesses to make the program more effective. Acceptance level. “

State agencies are required to “effectively demonstrate the program in all public relations related to digital identity verification.”

All these efforts are paid for by the states. The contract states, “Unless there is an agreement between the parties, neither party shall charge any fees to the other party in accordance with this agreement.”

Asked if the state was willing to pay Apple, the Arizona Department of Transportation said, “There are no fees or economic issues.”

There are no protection lines

The end result is that regions bear the burden of protecting technology systems at the expense of taxpayers, a move that will ultimately benefit Apple by making its devices more important than it is now.

“Apple’s interest is clear – sell more iPhones,” Fan said in an interview. “The state’s interest is to serve its citizens, but I’m not sure why they think a partnership with a technology company with a closed ecosystem is the best way. The state should pay taxpayers money for production.

The Apple Wallet app is not a major source of revenue for the company, although it does pay for Apple’s transaction transactions described in the Company’s service business. Instead, the Wallet app and other services are strategic features that make the iPhone more valuable to customers and keep it from competing with competitors such as Google and Android.

Essentially, in the contract, Apple shifts the responsibility for verifying the user’s identity to the following: “Apple is not responsible for any authentication results, and the Agency is confident that all certification results are provided” AS IS “and that there is no guarantee, transparency, accuracy or performance.

The agreements are also known for their shortcomings, and in terms of restrictions or guard rails, Apple has said it will use its strong authentication capabilities. That raises questions about whether the company can limit its new capabilities to competitive products.

“Apple has a history of choosing its own offerings in telecommunications hardware and software and taking advantage of third-party losses using the platform,” he said.