Tech CEOs look to deter leaks

Apple's Global Security team goes to great lengths to keep information about future products from leaking to the press.

Leaks have been a hot topic in the political arena, but they have also gained attention in the tech sector. In May and June, there were investigations of—and threats to—technology employees by both Google and Apple.

According to The Register, Google Head of Investigations Brian Katz distributed an ominous email internally announcing the termination of employees who had shared internal information with journalists.

Katz prepared the memo in response to a leak of internal jokes about Nest CEO Tony Fadell, as well as a transcript of a talk he gave to an "open meeting" of Google employees. The email noted: "We identified the people who leaked the TGIF transcript and memes. Because of their intentional disregard of confidentiality, they've been fired."

He went on to warn, "If you're considering sharing confidential information to a reporter—or to anyone externally—for the love of all that's Googley, please reconsider! Not only could it cost you your job, but it also betrays the values that make us a community."

According to that same report, a Google staffer now has filed suit in San Francisco Superior Court alleging that Google’s confidentiality agreements violate California labor laws. The litigation may put the company on the hook for a penalty of as much as $3.8 billion, the U.K. newspaper said.

While it is not unusual for a tech giant such as Google to use confidentiality agreements with employees to discourage leaks of internal information, the anonymous plaintiff said he didn't release any company information to the press.

In reply, Google said its confidentiality agreements are designed to protect its business. "We're very committed to transparency and having an open culture, which means we frequently share with employees confidential details of product launches and other types of sensitive, proprietary business information," a Google spokesperson said in a statement to The Register. "Our employee confidentiality policies are designed to protect that information, without preventing employees from disclosing information about their terms and conditions of employment, or workplace concerns."

Violating Apple’s core principles

Apple, which is known to share information about new products at company meetings, is cracking down on its staff as well. A report from The Outline reveals the lengths to which Apple's Global Security team goes to keep information about future products from leaking to the press—even hiring experts who have worked for the National Security Agency, the FBI and the Secret Service.

And those leaks don’t just come out of the Cupertino, California, company headquarters. According to a June 20 report by The Outline—a New York-based news site that bills itself as “a new kind of publication for a new kind of human”—plenty of disclosures come from Apple’s supply-chain partners in places such as China.

Such revelations don’t involve company memoranda or product specifications. They involve actual product parts, which employees hide beneath their uniforms before they leave the factories, or even flush into the sewer systems.

To prevent such smuggling, Apple and its manufacturing partners in China have to screen 2.7 million factory workers per day, The Outline said. The most valuable parts to steal, according to Apple Director of Global Security David Rice, are the housings or enclosures of an iPhone or MacBook. “If you have a housing, you pretty much know what we're going to ship,” Rice says.

But things are steadily improving, he believes.“In 2014, we had 387 enclosures stolen,” he told The Outline. “In 2015, we had 57 enclosures stolen, 50 of which were stolen on the night of announce, which was so painful.” In 2016, Rice says the company produced 65 million housings, and only four were stolen. “So it's about a 1 in 16 million loss ratio, which is unheard of in the industry.”

Still, Apple CEO Tim Cook thinks any leak directly damages Apple’s bottom line. During the company’s most recent earnings call on May 2, Cook blamed flagging iPhone sales on “earlier and much more frequent reports about future iPhones.”

Learning from Apple and Google

Cook’s tales are cautionary to other tech leaders. According to an October 2016 report by Business Insider, Snapchat CEO Evan Spiegel has a portrait of Steve Jobs hanging in his office, and the company has cultivated an obsession with leaks similar to Apple’s.

What’s more, Facebook is currently looking for a “Global Threat Investigations Manager,” according to a posting on the company’s official website.