[saudioger]

They're already on the hook for an enormous liability if it's true, so lying about it isn't really the worst option if there's even a small chance it avoids the issue.

After seeing what VW did with emissions, I wouldn't say any huge corporate cover-up is out of the question. Especially considering this situation would be very bad even if did happen and they were 100% truthful about it (it would create huge problems with China for them and their supply chain).

We just can't reasonably make conclusions either way yet.

[SpikeDad]

Not even the same. The VW coverup was to coverup a specific, fraudulent behavior by the company in an attempt to commit fraud.

The Apple situation is basically a reporter with no named sources saying that Apple itself was fooled by outside sources. There's a HUGE difference between willful fraud (VW) and corporate embarrassment (Apple IF it was true).

[saudioger]

Well my point is that it could be corporate embarrassment AND willful fraud to cover up the corporate embarrassment. They have a huge incentive to lie, because even if they were truthful from the beginning and this did happen... it would be very bad for them.

I also think this goes far beyond "embarrassment" — this is something that could potentially destroy Apple's supply chain.

[ckastner]

> They're already on the hook for an enormous liability if it's true

Correct, but this liability would (most probably) be based on showing some kind of negligence.

> so lying about it isn't really the worst option if there's even a small chance it avoids the issue

Deliberately lying about it would be fraud. Getting caught with that would dramatically increase the liability.

Since you used the VW example: do you really think it would have cost VW something around the order of $30bn if some foreign power had manipulated their emissions test without their knowledge? Or that executives would have been arrested?

> After seeing what VW did with emissions, I wouldn't say any huge corporate cover-up

This isn't a cover-up, though. This is Apple expressly addressing the issue, and categorically denying every part of it. To everyone, up to and including Congress, no less.

[saudioger]

Let's assume it's true: Does Apple have a choice other than cover-up?

Let's say this was the first they're hearing about it, and it turns out to be true.

Can they publicly state the truth, point the finger at China in the process, and risk having to immediately uproot their entire supply chain?

Is there a course of action that's better than outright public denial?

[ckastner]

> Is there a course of action that's better than outright public denial?

Sure. "We are currently investigating this issue and cannot comment until the investigation has concluded and we have determined the attackers, their motives, and possible mitigations".

> Can they publicly state the truth, point the finger at China in the process, and risk having to immediately uproot their entire supply chain?

Note that there is no reason to point the finger at China yet, only suspicion, but even if this were the case: I think China would stand to lose more from any uprooting.

This would affect Apple short-term, but Apple has, for all practical purposes and intents, unlimited amounts of cash, and they could build up a new supply chain. Weren't they keen to move production back to the US anyway?

China, on the other hand, would permanently lose this production line, and access to all the IP that comes with it.

[simonh]

>Let's assume it's true: Does Apple have a choice other than cover-up?

Yes, they can state that they detected a hardware based security intrusion and have mitigated it.

Bear in mind according to the Bloomberg article the government and several other companies know all about this already as well. If the Bloomberg article is true there are thousands of these compromised motherboards out in the wild at multiple companies. There is no way on earth Apple could ever get away with a denial, so why do it?