David's World

March 6, 2005

Apple vs. ThinkSecret: Yes, journalists may hurt companies.

May journalistic news sites publish secret information coming from companies, even if it hurts the companies? Of course they may! Are they allowed to protect their sources, as any journalist may do? I think so. The discussion about the case Apple vs. ThinkSecret shows how many people disregard essential democratic elements such as news journalism - for example The Shape of Days.

What happened in the case of ThinkSecret was that, for example, Apple's iPod Mini was introduced at ThinkSecret weeks before the official announcement came. They didn't get it all right at ThinkSecret, though: the official introduction of the iPod Mini became a slight disappointment because it turned out $50 more expensive than planned. This clearly damaged Apple's stock price.

Jeff Harrell, freelance (and un-paid) "opinion writer" writes at The Shape of Days:
It seems self-evident to me that [ThinkSecret's author Nicholas Ciarelli] did in fact actively solicit trade secrets, [and] went on to publish these trade secrets on the Internet, doing irreparable harm to Apple in the process.

No doubt - but is that bad?
When Bob Woodward and Carl Bernstein and their colleages published information about a breakin at the Watergate hotel, they most certainly caused irreparable harm to President Nixon and his party. Without the due protection of their source Deep Throat, a person with criminal intent would have continued to rule one of the world's most prominent countries.

Reporters, whether they are big-shots or college kids, need to be able to point their fingers at politicians and companies alike. Jeff Harrell writes that Companies have a right to keep certain information confidential. Certainly - if they can do so. But the public must be given the option to supervise things, and there can be no a priori decision about what kind of information cannot be published. If we followed Harrell's argument, everything can become a trade secret in the eyes of a victim company. If a local chemical plant polutes the air over decades, it's a trade secret. If an oil company is supporting military dictators in, say, Nigeria, it's a trade secret. Any whistle-blowers could come under scrutiny. Both Watergate and the toxic waste example illustrate very worthwhile journalism, as Jeff says. But why should it be up to a judge to decide what can be published? Jeff Harrell's opinion exemplifies a remarkable lack of sensibility for the foundations of our still-somewhat-free democratic society.

Is ThinkSecret-maker Ciarelli a journalist, as argued in this affidavit? The division of journalists vs. non-journalists is a out-dated in times of citizen journalism in blogs.

Lastly, we can try to apply a more formal way to check if the ThinkSecret piece was actually newsworthy. It looks like their articles are interesting only because of their timeliness. The information contained therein is always made public - by Apple. Consequence: not very newsworthy.
But hold on...: if published months in advance, the ThinkSecret articles provide a valueable service to the readers. If I know they're getting a, say, G5 Powerbook out in July, I won't shell out 2000 EUR for a new G4 Powerbook in May. The news would be that Apple is overcharging its customers. Therefore: useful, thus newsworthy.

As in any market, if the participants (me!) know more about the market situation, they can make more favorable decisions about their actions. That leads to an optimization according to demand and supply - in short, Apple will have to lower prices significantly on models that are close to the end of their lifespan. It seems to be that the publication of alledged trade secrets can be a normal factor in an economic market.

It is not a journalist's business if his informants violate their own private agreements with their employer. Journalists and those producing newsworthy publications must be able to protect their informants to establish transparency, whether a company or a politican gets hurt in the process or not.

This discussion transcends our obligation as member of Our Holy Church of Jobs to follow Apple wherever we go. It is important for a free society.

Addendum: Note that this argument is not a legal one. Neither am I qualified to write about California law, nor do I care to interpret the situation in their legal framework. Some information about what the claims are, may be helpful, however. This has been written by some "Anonymous Coward" in a short but heated discussion at MacSlash:

Sorry, not when it comes to trade secrets. That is the key point: the information leaked was considered a trade secret. Trade secrets are treated differently. If I dig through your trash once it's on the curb, I'm OK. If I dig through your employer's trash, even though it's sitting on the curb, I can be charge with corporate espionage. Apple's claims are: 1) The publisher should have recognized that the information would be considered a trade secret and should not have published the information, 2) Even if they didn't recognize the fact that the information was a trade secret, the fact that is was a trade secret means that a crime has been committed and therefore, not revealing their source is obstruction of justice, 3) Apple had warned them several times in the past that they were treading on thin ice, and 4) They had actually solicited people to break their NDA's which is further evidence to a crime being committed.

Another Anonymous Coward adds:

Okay, I see from your web site that you're in the UK. Maybe this is a cross-cultural thing.

You're saying that because we don't have a good way to decide who is and who's not a journalist, everybody is a journalist. The author of the article is saying that because we don't have a good way to decide, nobody is a journalist. Nobody gets special protection, nobody is automatically above the law.

A further comment with links to various laws is here.

David, I really appreciate your chiming in on this. More opinions are good. But was it really necessary to be so snide? Just in case you really don't know, "freelance" doesn't mean "unpaid." To the contrary, I get paid for my work regularly, albeit not lucratively.

I also kind of have to wonder if you read my article very carefully. You bring up the example of industrial pollution. In my article, I specifically used the same basic example, saying that if Ciarelli were blowing the whistle on something like groundwater pollution, the story would deserve protection against civil liability for disclosing confidential information. It's a matter of the public interest. In this case, there is zero public interest at hand. Ciarelli was just publishing Apple trade secrets for the hell of it.

To even compare Ciarelli to Bob Woodward is folly. If you'll go back and look at my article, you'll see that I used the same comparison to illustrate the opposite point. Nick Ciarelli was not Bob Woodward. He was not chasing down a big, important story. He was just posting secrets for the fun of it. Big difference.

And to answer the question that you apparently didn't have the courtesy to just e-mail me about … no, I don't own any Apple stock. I am fully liquid, having cashed out even my 401k a couple of years ago. If you were curious, why didn't you just ask me — my telephone number is published prominently on my Web site — instead of resorting to innuendo?

(Incidentally, your Web site appears to have a problem. It's jamming my comment into one long paragraph. I can't figure out how to get it not to.)

Oh, for cryin' … okay, please disregard my parenthetical. Apparently your site just displays comments as one long paragraph when the "preview" button is used. Sorry for the misunderstanding.

Thanks Jeff for your comment!

You state that you "made practically no money" with your current writing, and I am, to some extent, imitating your style of ad-hominem reference to ThinkSecret's Nicholas Ciarelli.

Of course I'm not comparing Woodward to him. But I'm being blissfully agnostic about who is a great journalist and who is a college kid agressively following his hobby. It can't be up to the legal system to decide what is 'an important story'.

It's interesting, however, how one can use the same examples to illustrate a completely different opinion!

I agree that people should have the right to blow the whistle on illegal or unethical activities. Trade secrets are another matter.

Is the public interest really being served by me publishing information about an upcoming product from Adobe?