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The Clipper chip proposal was contested by groups like the Electronic Frontier Foundation and the Electronic Privacy Information Center, which claimed that it would result in citizens being subjected to more extensive and possibly unlawful government surveillance.Secure mobile devices and smartphone applications exist, but they may require specialized hardware and typically require both parties to the communication to use the same encryption mechanism.Clipper's escrow system had a serious security flaw when the chip sent a 128-bit "Law Enforcement Access Field" (LEAF) containing the information needed to recover the encryption key. To prevent the message from being altered by the program that sent it, a 16-bit hash was added to the LEAF. The Clipper chip would not decrypt a message with an invalid hash, but the 16-bit hash was too short to provide any practical security. After the attempt at escrow, a brute force attack would quickly produce a new LEAF value that would yield the same hash but the incorrect keys. This would prevent the key from being escrowed and enable the Clipper chip to be used as an encryption device. To circumvent the real-time escrow, Yair Frankel and Moti Young published another design-based attack in 1995 that demonstrated how a device's key escrow tracking and authentication capability (LEAF) could be attached to messages from another device and still be received. A group of top cryptographers examined the architectural flaws in key escrow implementations generally, including but not limited to the Clipper chip Skipjack protocol, in their 1997 paper "Risks of Key Recovery, Key Escrow, and Trusted Third-Party Encryption.Government pressure to obtain the Clipper chip led to the development and release of several powerful encryption software programs, such as Nautilus, PGP, and PGP fone.

The Clipper chip proposal was contested by groups like the Electronic Frontier Foundation and the Electronic Privacy Information Center, which claimed that it would result in citizens being subjected to more extensive and possibly unlawful government surveillance. They also claimed that because the Clipper chip's design was classified, the public could not assess how strong its encryption was, potentially locking people and businesses into an insecure communications system. It was also brought up that although American companies might be compelled to use the Clipper chip in their encryption products, foreign companies would not be able to, and phones with robust data encryption would likely be produced abroad and sold in the US, negating the goal of the entire process and, of course, hurting American manufacturers financially in the process. The Clipper chip proposal was opposed by Senators John Ashcroft and John Kerry, who argued that each person should have the freedom to export encryption software and encrypt messages.

Government pressure to obtain the Clipper chip led to the development and release of several powerful encryption software programs, such as Nautilus, PGP, and PGP fone. It was thought that if strong encryption were freely available on the Internet as a replacement, the government would be helpless to stop its use.

Technical Defects
Matt Blais released a paper on protocol failure in the Escrowed encryption standard in 1994. Clipper's escrow system had a serious security flaw when the chip sent a 128-bit "Law Enforcement Access Field" (LEAF) containing the information needed to recover the encryption key. To prevent the message from being altered by the program that sent it, a 16-bit hash was added to the LEAF. The Clipper chip would not decrypt a message with an invalid hash, but the 16-bit hash was too short to provide any practical security. After the attempt at escrow, a brute force attack would quickly produce a new LEAF value that would yield the same hash but the incorrect keys. This would prevent the key from being escrowed and enable the Clipper chip to be used as an encryption device. To circumvent the real-time escrow, Yair Frankel and Moti Young published another design-based attack in 1995 that demonstrated how a device's key escrow tracking and authentication capability (LEAF) could be attached to messages from another device and still be received. A group of top cryptographers examined the architectural flaws in key escrow implementations generally, including but not limited to the Clipper chip Skipjack protocol, in their 1997 paper "Risks of Key Recovery, Key Escrow, and Trusted Third-Party Encryption.

Absence of Adoption
The U.S. Department of Justice was the only major purchaser of phones equipped with the Clipper chip; neither manufacturers nor consumers adopted the chip, and by 1996, it had become obsolete. The United States government persisted in promoting key escrow by providing manufacturers with incentives that would permit more lenient export regulations provided the exported encryption software included key escrow. The widespread use of powerful encryption methods like PGP, which were outside the purview of the US government, served as a major impetus for these attempts.

As of 2013, heavily encrypted voice channels are still not the dominant mode of current cellular communications. Secure mobile devices and smartphone applications exist, but they may require specialized hardware and typically require both parties to the communication to use the same encryption mechanism. These applications typically communicate over secure Internet paths (such as ZRTP) rather than over telephone voice data networks.