Are US States Ceding Control of Identities to Apple?

Apple is making US states foot part of the bill and provide customer support for its plan to turn iPhones into digital identification cards. At the same time, this has brought questions from industry observers about why local authorities are ceding control of citizens’ identities to the tech giant.

According to confidential documents obtained by US television news channel CNBC, the company requires states to maintain the systems needed to issue and service credentials, hire project managers to respond to Apple enquiries, prominently market the new feature and push for its adoption with other government agencies, all at taxpayer expense, according to contracts signed by four states.

Apple announced last June, at its Worldwide Developers Conference (WWDC), that its users could soon store state-issued identification cards in the iPhone’s Wallet app, presenting it as a more secure and convenient way for customers to provide credentials in a variety of in-person and remote settings. The feature, when combined with Apple’s biometric security measures like Face ID, could cut down on fraud.

But the move has prompted industry observers to query why local authorities are ceding control of citizens’ identities to a $2.46 trillion private corporation.

The contracts between California-based Apple and states including Georgia, Arizona, Kentucky and Oklahoma provide a glimpse into the dealings of the powerful company.

The seven-page memorandum of agreement, obtained through public record requests from CNBC and other sources, mostly portrays Apple as having a high degree of control over the government agencies responsible for issuing identification cards.

Georgia and Arizona will be the first states to offer driving licences on the Wallet app. While the contracts obtained were virtually identical across states, CNBC did not review agreements for Connecticut, Iowa, Maryland and Utah, the four other states that have signed up for Apple’s digital ID program.

Apple in the driving seat

Apple has sole discretion for key aspects of the program, including what types of devices will be compatible with the digital IDs, how states are required to report on the performance of the effort, and when the program is launched, according to the documents.

States have to agree to wide-ranging efforts designed to ensure the adoption of Apple’s digital IDs, including by offering the new feature ‘proactively’ and at no additional cost whenever a citizen gets new or replacement identification cards.

States also have to help spur adoption of the new IDs with ‘key stakeholders in federal and state government’, such as the Internal Revenue Service, state and local law enforcement, and businesses that restrict users by age who are ‘critical to the program achieving a sufficient level of acceptance.’

While the state agencies have to ‘prominently feature the program in all public-facing communications relating to Digital Identity Credentials,’ the marketing efforts are ‘subject in all cases to Apple’s prior review and approval.’

All these efforts are paid for by states. The contract says that ‘except as otherwise agreed upon between the Parties, neither Party shall owe the other Party any fees under this Agreement.’

When asked if his state was in line for payments from Apple, a communications officer for the Arizona Department of Transportation confirmed that ‘no payment or economic considerations exist.’

Along with the digitisation of other industries from finance to entertainment to revenue collection, there is a push around the world to create more modern digital ID systems. The difference being that efforts in countries including Singapore, France, Germany and China are implemented at the national level rather than through private companies.