If a proposed bill successfully pass through New York's state assembly and senate, Apple and Google could face fines of $2,500 per device sold in the state after Jan. 1, 2016, if a retailer knowingly sells a smartphone that can’t be unlocked or decrypted by the device manufacturer or operating-system provider.
There's no requirement for Apple, Google, or other companies to create a backdoor. However, if any manufacturer wants to sell a smartphone in New York, the device would need to comply with those requirements or else face a civil suit by the attorney general or district attorney, notes ZDNet (http://tinyurl.com/hz67zr8).
Apple says it's not technically feasible for it bypass an iPhone's passcode, making it unable to respond to government warrants for data stored on an iPhone. The Cupertino, California-based company has also been criticized by the FBI and US Department of Justice for implementing end-to-end encryption in iMessage and FaceTime, which it says prevents it from complying with a wiretap order for data in transit.
Techdirt, which first reported the proposal, notes that the proposed bill from New York Assemblyman Matthew Titone was first introduced on June 8, 2015 to the Committee on Consumer Affairs and Protection. As the publication pointed out, if the bill is passed it would likely spawn a market in New York for smartphones from other states.
In a meeting with government officials, Apple CEO Tim Cook reportedly asked Obama administration officials to come out in favor of unbreakable encryption. According to The Intercept, Cook criticized officials for their weak position on the encryption debate and said they should publicly state that they are in favor of “no backdoors” in encryption.