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The Fascinating Case of the Gawker Guys and the Lost iPhone

BEGIN TRANSCRIPT

RUSH: Now, I want to talk about something else here before we get full-blown into the Goldman hearings and the Arizona stuff, and a lot of other things percolating out there.

Have you heard by now of the tech blog called Gizmodo? Now, Gizmodo is part of the Gawker media universe, and as you know, I have a strange affection for the guys at Gawker. They're in the closed-knit circle of New York media. They have many different blogs and websites, among them is a gossip type site, and they have no compunction coming after me in the most funny, vilifying personal ways, but still, for some reason, I kind of like the Gawker guys. I don't know why. I wouldn't recommend you go there, but I do like the Gawker guys. Be very careful going to Gawker.com. You have been warned.

Now, Gizmodo is their tech site, and the people at Gizmodo are a bunch of Mac fan boys, you know, Apple Mac fan boys, and the story here is that this poor guy at Apple had his prototype iPhone 4G in a bar in the Bay Area somewhere, I forget exactly where it was, but it was a beer garden, and for some reason he had his prototype phone -- I'm sure they have to test these things at Apple before they put 'em on the market -- he had his off campus. He had it in the bar. He left it there on a stool and eventually the Gizmodo guys found out about it because they were offered a chance to buy the phone by somebody who found it on the bar stool. Well, they then published pictures and reviews of everything about the new phone. They ripped it open. They looked to see what's inside it. They gave away a whole lot of potential secrets that Apple competitors could really use. There's a reason for corporate security here. The mobile smart phone business is highly competitive and the Gizmodo guys practically gave away as much as they could about what's in this phone that's supposed to hit in June.

Well, lo and behold, a short time later -- oh, and then Apple asked for the phone back, since the Gizmodo guys admitted that they had it. So Apple asked for the phone back, and the Gizmodo guys, "Okay, but we want your request in writing." So Apple's legal counsel sends the request in writing. Now, you Gizmodo guys, and you Gawker guys, this is where you erred. Your response to Apple's letter was juvenile and snarky and totally unnecessary. I don't know that Apple is behind these charges that had been brought or might be brought against one of the Gizmodo editors, because this is a criminal, not a civil complaint. Apple may not have any control over whether or not the DA out there levels charges. If it was a civil case then Apple could say, okay, go after 'em or not go after 'em, but if it is a criminal case, if the DA out there thinks that Gizmodo essentially knew it knowingly bought a stolen phone, traded in stolen merchandise, then the Gizmodo editor, Jason Chen, may not be protected by the Shield Law. The Shield Law says that journalists cannot be charged and cannot have search warrants executed against their home or their office or whatever, but in this case, if it's stolen property, if that's the angle the cops are going for then the Shield Law may not apply, and this little editor could be in for some trouble.

Now, the guy that runs Gawker, Nick Denton, is loving every minute of this up until whatever charges come down the pike because he's getting all kinds of publicity out of it, but it's amazing because now one of the questions that is up for debate is, are bloggers journalists? And therefore are bloggers covered by Shield Laws? The Shield Law, again, may not apply here because this is not protecting a source, that's what the Shield Law is for. This may involve, depending on how they want to proceed here, knowingly buying stolen property. (interruption) Well, because it wasn't returned to Apple. It was stolen because the theory is it wasn't returned to Apple. The phone's left on the bar stool, somebody finds it and instead of offering to return it to Apple, 'cause it was camouflaged to look like a current iPhone 3GS, and instead the person who found it offered it to websites. The first guy he offered it to was Engadget and Engadget refused to pay. The Gawker guys, Gizmodo, I think paid five grand, and therein lies the possible vulnerability. But everybody is stunned here over what a big, big case this has become over a telephone, even if it is Apple, even if it's a smart phone. But from Apple's standpoint the Gizmodo guys just gave away at least a month, month-and-a-half before release, some of the stuff inside this new phone.

Well, now, Snerdley, the cynic, is piping up here by saying: great publicity. I don't think, if you have any understanding of Apple's relationship with the media, this runs counter to everything. Planting a phone, hoping to get publicity out of it, as in, i.e., a publicity stunt, this is not how Apple does things. Apple has working relationships with journalists already. Access journalism. It's very smart on Apple's part. They allow certain journalists to have their items weeks in advance and test them, and if they get a good review, then they get the next product. If they don't get a good review then they pull the next product. So it's a way for Apple to control what's reported, and they've got plenty of people they do this with. So they don't need to plant a phone. Especially with the iPad out there and everybody now anticipating what the next iPhone going to be, they have built-in anticipation for this.

It may not be that Apple is involved here at all, Snerdley. He says, "How is Apple hurt?" Apple may not have any say-so here over how the cops in California proceed, how the DA proceeds. Remember, now, if this is trafficking in stolen good, if that's how they want to go after it, Apple can't say, "Don't pursue them, we don't want you to," they can do that in a civil case, but Apple can't say don't press charges. It's not up to them. By the same token, Apple cannot say do press charges. It's up to the DA. Now, they ran into this guy's house, they broke the lock on his front door, they seized four computers and his phone and all kinds of stuff. He came home from dinner, got home at 9:45 and found the cops in there going through his stuff, and they took it all. So, you know, it's become a huge cause celebre here, and over a telephone, over the new iPhone. Now, I find it fascinating as heck, plus the question: Are bloggers journalists? If this thing goes to term, so to speak, if the case isn't aborted and if it goes to term then we might have a decision on that.

But I'm telling you, Gizmodo fan boys, if you just wouldn't have sent that response, that snarky, juvenile, tacky response. I wish I had it here and could read it to you. I didn't print it out and it's from two or three days ago. But if you hadn't sent that thing back to the Apple lawyer, who knows, it may be irrelevant because, as I say, Apple may have no possibility here to determine whether or not a case is brought. Now, the Shield Law does not apply if Chen, the Gizmodo editor, is suspected of breaking the law. The Shield Law applies when he is protecting someone else who broke the law, but he's not allowed to break the law. A journalist is not allowed to break the law. You're allowed to shield sources and this kind of thing. So journalist shield laws are about journalists being able to protect sources who may have committed crimes, but it's not a license for journalists to commit crimes. So it's all going to come down to whether or not the DA and the cops out there think Jason Chen committed a crime, not whether Apple thinks so, but whether the DA thinks so.

BREAK TRANSCRIPT

RUSH: Steve Wozniak, one of the cofounders of Apple, there's a picture of him out there wearing t-shirt drinking a bottle of beer, and the T-shirt says something like, "I went to such-and-such beer garden and all I got was this cheap iPhone prototype." (laughing) They're having a lot of fun with it. Here is the e-mail. This is the letter. Gizmodo asked for Apple to formerly in a letter ask for the device back. So an Apple lawyer wrote a formal request -- I read it; it was straight up and forward -- asking for their device back. Jason Chen and the Apple lawyer met and did a personal hand-over after this letter was sent by Gizmodo back to Apple. This is what's so snarky.

"Bruce, thanks. Here's Jason Chen, who has the iPhone. And here's his address. You two should coordinate a time. (Blah Blah Blah Address) Happy to have you pick this thing up. Was burning a hole in our pockets. Just so you know, we didn't know this was stolen (as they might have claimed. meaning, real and truly from Apple. It was found, and to be of unproven origin) when we bought it. Now that we definitely know it's not some knockoff, and it really is Apple's, I'm happy to see it returned to its rightful owner. P.S. I hope you take it easy on the kid who lost it. I don't think he loves anything more than Apple." (interruption) Well, maybe. Okay, they're now... (interruption) The staff is disagreeing with me. It doesn't sound so snarky.

When I read it first, it sounded snarky. "Thanks, Bruce"? "Thanks, Bruce," the thing is "burning a hole in our pockets." Especially, as I say these Gizmodo guys, they're Mac fan boys, and people make fun of them for being in the tank for Apple. It's amazing. A lot of people think, "Rush, you're getting suckered into this. Who in the world would find a phone that looks like a current 3GS phone and call a website with it and say, 'Hey, guess what we got here?'" (interruption) Well, no. Here's the problem, though. This thing has a front-facing camera. You can tell by looking at the front of it that it is not an iPhone 3GS. It has a front-facing camera which everybody thinks, "Okay, we're going to have video chat now."

It's got a forward camera to take pictures and a front-facing camera. And there are other things. There was a Facebook app on it. There's not a Facebook thing for the current iPhone. There's a lot of stuff people saw just using it that they said, "Okay, this is not a 3GS." It was clear that this was something new, and Apple people, Apple fan boys know that there's a new iPhone OS 4.0 that's out there being tested and the tradition is that every June there's a new version of the phone itself -- and this operating system for the iPhone is going to be in the iPad come September. So people are eager to find out what the hell is the operating system to boot. So there are a lot of people in Silicon Valley who would see this thing and say, "Whooooooooa, what do I have here?" (interruption)

Yeah. (interruption) And, "Oh, yes. Let's return it to Apple"? Not if somebody can sell it. They obviously wanted to make some money. Five grand, Engadget, too much money. Unemployment is high; you take what you can get.

BREAK TRANSCRIPT

RUSH: One more thing on this Gawker-Gizmodo-Apple new 4G iPhone thing. I forgot this. The guy in the bar who found the phone on the bar stool did try to return it to Apple. He called tech support. He called every number that you can find for Apple, and everywhere he called the people didn't know what he was talking about, assumed he was a kook, and hung up on him -- or thanked him and sent him away. Because none of the people he talked to had any idea Apple was field-testing a new phone. Now, I just explained this to, Snerdley and he said, "Well, of course they fake an attempt here to get hold of the lower-level people."

I said, "Nobody knows how to get hold of the upper-level people at Apple." Not even I, El Rushbo, one of the most powerful, influential members of the media. I wouldn't know how to get hold of the executive suite at Apple if the life of this show depended on it. Clearly, some dude in a bar trying to get hold of (laughing) Apple. "Hey, you know what -- hic! hic! -- I got -- hic! -- one of your phones." "Oh, yeah, sir. Why don't you just meet us here at our campus and bring it back." Yeah. You think that's going to happen? (interruption) Well, they could have sent me the phone. (laughing) It's too late now. But the tech support people told him it was probably a Chinese knock-off, a cheap Chinese knock-off phone and not to worry about it, that they weren't interested in it.

END TRANSCRIPT

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