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Illustration: Rebecca Zisser/Axios

Apple has come under fire this week for holding onto encryption keys to iCloud backups, which let it provide law enforcement with access to users' data even while the company is refusing to unlock iPhones for the FBI, as in the current standoff over the Pensacola shooter's phone.

The state of play: Apple's practice is nothing new — and it's not a sign the company is capitulating to law enforcement in the encryption debate.

Why it matters: Apple has come under criticism from all corners, with President Trump and others criticizing the company for not giving the government a "back door" into iPhones, and others saying Apple has offered law enforcement too much access.

  • In reality, Apple has staked out somewhat of a middle ground between the extremes, but falls far closer to the pro-encryption end of the spectrum.

How it works: With iMessage, Apple allows users to fully encrypt their messages, so they can't be seen or recovered by Apple. When it comes to the iPhone, the device itself is fully encrypted — meaning without the passcode, no one (not even Apple) has access to the information stored inside.

Yes, but: With iCloud backups of the data to the phone, Apple made the decision to hold onto the encryption key — largely so that if consumers lose their password, there is still a way to recover their data.

  • Of course Apple knows that this choice also avoids a hard-line stance in which it has nothing to offer law enforcement — which would likely lead to even more confrontation than the company already faces.
  • A Reuters report this week led many to conclude this is a new policy or one hidden from the public. In fact, it has been publicly disclosed and reported, though it is perhaps not that widely understood.
  • And if a user really wants to keep their data in their own hands, they can back up their iPhone to a computer instead, or choose to have no backup at all.

Between the lines: Apparently, many law enforcement agencies don't fully understand they can get much of what they want from iCloud backups and instead seek to pressure Apple to crack open iPhones instead.

Our thought bubble: Apple isn't pleasing everyone, clearly. But it is offering customers who want full encryption a means to do so, while, in many cases, not leaving law enforcement empty-handed.

  • The issue continues to be hotly debated, with Attorney General William Barr issuing a renewed call for a back door to the iPhone's encryption, a move critics say will inevitably lead to abuses, either from hackers or repressive governments that want their own access to citizens' iPhones.

Meanwhile: Apple CEO Tim Cook spoke at a meeting between President Trump and tech leaders in Davos on Wednesday, as I reported yesterday. Shortly after, Trump issued a somewhat convoluted statement on Apple, during an interview with CNBC. You can read the full comments here, but suffice it to say he still wants more from the iPhone maker.

Go deeper: Apple says its software business is booming

Go deeper

Felix Salmon, author of Capital
5 mins ago - Economy & Business

How the pandemic caused a corporate rebound

Illustration: Sarah Grillo/Axios

WeWork becomes a public company today worth more than $9 billion — a vindication of the expensive turnaround strategy employed after it spectacularly imploded in 2019. Like many companies that find themselves at death's door, that which didn't kill them made them stronger.

Why it matters: Hertz, Alamo Drafthouse, Airbnb, and Toast are among the currently-thriving companies that were shaken to the core in the early days of the pandemic — providing further evidence for the theory that, in the words of former Fast Company editor Bill Taylor, "companies can't be great unless they've almost failed."

35 mins ago - Health

Aduhelm is bombing

The average list price of Aduhelm is roughly $4,300 per monthly infusion. Photo: Biogen

Biogen sold $300,000 worth of Aduhelm in the third quarter, well below Wall Street's expectations, which prompted analysts at Raymond James to call the Alzheimer's drug "potentially the worst drug launch of all time" amid Biogen's "persistent hyperbole about the drug's purported benefits."

The big picture: Aduhelm's controversial approval and high price tag have shaped the market reaction. Health insurers are hesitant to cover Aduhelm until Medicare makes a decision next year, and doctors aren't embracing the drug either.

35 mins ago - Health

COVID cases and deaths keep falling

Expand chart
Data: N.Y. Times; Cartogram: Kavya Beheraj/Axios

America’s coronavirus outbreak is rapidly improving as the Delta wave recedes, and vaccines for kids — which could become available within weeks — will help the situation improve even further.

By the numbers: Nationwide, the U.S. is now averaging about 79,000 new cases per day — a 22% drop over the past two weeks.