Apple faces criminal sanctions for defying App Store antitrust order
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Epic, makers of the wildly popular Fortnite video-game, have waged a one-company war against the "app tax" ā the 15-30% rake that the mobile duopoly of Apple/Google take out of every penny we spend inside of apps.
Epic's own digital practices are hardly spotless: just this year, the company was caught cheating players ā many of them children ā with deceptive practices and had to refund over $72m:
But in this fight, Epic is on the side of the angels. The 30% that Apple/Google sucks out of the mobile economy is a brutal tax, and not just on app makers. Patreon performers recently raised a stink when the company announced that it would be clawing back 30% of the money pledged by their supporters ā that 30% surcharge is passed straight through to Apple/Google:
From independent news outlets to crafters selling their work out of small storefronts, all the way up to massive entertainment services like Disney Plus and Fortnite, the mobile cartel takes 30% out of every dollar, a racket they maintain with onerous rules that ban apps from using their own payment processors, or even from encouraging users to click a link that brings them to a web-based payment screen.
30% is a gigantic markup on payment processing. It's ten times the going rate for payments in the USA, already one of the most expensive places in the world to transfer money from one party to another. In the EU, payment processing typically runs 1%ā¦or less.
But crafters, Patreon podcasters and small-town newspapers are in no position to fight Google and Apple. Instead, we get Epic, a multi-billion-dollar company that's gone to the mattresses to fight these multi-trillion-dollar companies. Personally, I dote on billionaire-on-trillionaire violence.
Epic was wildly successful. It mopped up the floor with Google, securing an especially punitive award from a judge who was furious that Google had destroyed evidence:
Epic also won against Apple, though not as thoroughly as it had with Google, because Apple had the commonsense not to get up to the kind of shenanigans that make federal judges very, very mad. In the Google case, the court found that Google had acted as a monopolist and ordered it to open up the payment system in Google Play, a direct blow to the Android app tax.
In the Apple case, the judge did not find that Google had acted as a monopolist, but did rule that the App Store's payment processing racket violated the law, and ordered Apple to end its own app tax:
That's where things get gnarly. Apple is addicted to corrupt sources of income ā like the tens of billions it illegally receives every year in bribes from Google make it the default search:
And it really, really loves the app tax. When the EU ordered Apple to allow third-party app stores (as a way of killing the app tax), the company cooked up a malicious compliance plan that was comically corrupt:
So, the mere fact that a federal judge had ordered Apple to open up its app store to competing payment processors was not going convince Apple to actually do it. Instead, Apple cooked up a set of rules for third-party payment processing that would make it more costly to use someone else's payments, piling up a mountain of junk fees and using scare screens and other deceptive warnings to discourage users from making payments through a rival system:
That's the kind of thing that is apt to make a federal judge angry ā and, as noted, angry federal judges can make life very hard for tech monopolists, a lesson Google learned when it destroyed key evidence in its Epic case. But Apple didn't just flout the court order ā they lied about it to cover it up, and Judge Yvonne Gonzalez Rogers is furious. She held that Alex Roman, Apple's Vice-President of Finance, "outright lied under oath," and she has raised the possibility of criminal contempt penalties for Apple:
This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order. Time is of the essence. The Court will not tolerate further delays. As previously ordered, Apple will not impede competition. The Court enjoins Apple from implementing its new anticompetitive acts to avoid compliance with the Injunction. Effective immediately Apple will no longer impede developersā ability to communicate with users nor will they levy or impose a new commission on off-app purchases
In other words, any junk fees, any impediments to opening up third party payments, will be switfly and harshly dealt with. As of right now developers can start to build third-party payments into their apps and Apple cannot block them. It's the end of the app tax, a source of about $100b/year for Apple:
The world is on fire and everything is terrible, but we are also living through the most consequential season in the history of the war on corporate tech power. Google has been convicted three times of being a monopolist and is almost certainly going to have to sell off Chrome, most of its ad-tech stack, and possibly Android. Meta just put up a pathetic showing in an equally serious antitrust case that could see it forced to sell off Instagram and Whatsapp:
Countries around the world have passed big, sweeping, muscular antitrust laws specifically aimed at smashing corporate tech power, like the EU's Digital Markets Act and Digital Services Act:
Most importantly, all of this is happening from the bottom up. There is no dark money campaign to fuck up the tech companies. The politicians and enforcers who are taking on Big Tech are being shoved from behind by billions of everyday people who are furious and refuse to take it any longer:
I am deeply grateful for the public servants who have championed this cause, but I also know that these people are the effect of our movement, not the cause. When Kier Starmer fires Britain's brilliant and effective top competition enforcer and replaces him with the former head of Amazon UK, that does nothing to tamp down the political outrage that Britons feel towards America's tech giants:
All over the world, countries that passed IP laws to protect US tech interests in exchange for tariff-free access to US markets are grappling with the end of free trade with America. This represents a generational opportunity to pass laws that enable local technologists to jailbreak US tech exports and liberate their people from the extractive practices of Big Tech forever:
https://archive.is/CiBIz
There is nothing harder to stop than an idea whose time has come to pass.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
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Alex Popovkin, Bahia, Brazil from Brazil (modified)
https://commons.wikimedia.org/wiki/File:Annelid_worm,_Atlantic_forest,_northern_littoral_of_Bahia,_Brazil_%2816107326533%29.jpg
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https://creativecommons.org/licenses/by/2.0/deed.en
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Local mother Jeanette Reynolds, who has been working hard for nearly nine months now to develop her unborn son Connor, was shocked this week to discover that someone else had copied her idea and put a cheap clone of her son up on the app store.
A jury just found Google guilty on all counts of antitrust violations stemming from its dispute with Epic, maker of Fortnite, which brought a variety of claims related to how Google runs its app marketplace. This is huge:
The mobile app store world is a duopoly run by Google and Apple. Both use a variety of tactics to prevent their customers from installing third party app stores, which funnels all app makers into their own app stores. Those app stores cream an eye-popping 30% off every purchase made in an app.
This is a shocking amount to charge for payment processing. The payments sector is incredibly monopolized and notorious for its price-gouging ā and its standard (wildly inflated) rate is 2-5%:
Now, in theory, Epic doesn't have to sell in Google Play, the official Android app store. Unlike Apple's iOS, Android permit both sideloading (installing an app directly without using an app store) and configuring your device to use a different app store. In practice, Google uses a variety of anticompetitive tricks to prevent these app stores from springing up and to dissuade Android users from sideloading. Proving that Google's actions ā like paying Activision $360m as part of "Project Hug" (no, really!) ā were intended to prevent new app storesfrom springing up was a big lift for Epic. But they managed it, in large part thanks to Google's own internal communications, wherein executives admitted that this was exactly why Project Hug existed. This is part of a pattern with Big Tech antitrust: many of the charges are theoretically very hard to make stick, but because the companies put their evil plans in writing (think of the fraudulent crypto exchange FTX, whose top execs all conferred in a groupchat called "Wirefraud"), Big Tech keeps losing in court:
Now, I do like to dunk on Big Tech for this kind of thing, because it's objectively funny and because the companies make so many unforced errors. But in an important sense, this kind of written record is impossible to avoid. Any large institution can only make and enact policy through administrative systems, and those systems leave behind a paper-trail: memos, meeting minutes, etc. Yes, we all know that quote from The Wire: "Is you taking notes on a fucking criminal conspiracy?" But inevitably, any ambitious conspiracy can only exist if someone is taking notes.
What's more, any large conspiracy involving lots of parties will inevitably produce leaks. Think of this as the corollary to the idea that the moon landing can't be a hoax, because there's no way 400,000 co-conspirators could keep the secret. Big Tech's conspiracies required hundreds or even thousands of collaborators to keep their mouths shut, and eventually someone blabs:
This is part of a wave of antitrust cases being brought against the tech giants. As Matt Stoller writes, the guilty-on-all-counts jury verdict will leak into current and future actions. Remember, Google spent much of this year in court fighting the DoJ, who argued that the company bribed Apple not to make a competing search engine, paying tens of billions every year to keep a competitor from emerging. Now that a jury has convinced Google of doing that to prevent alternative app stores from emerging, claims that it used these pay-for-delay tactics in other sectros get a lot more credible:
On that note: what about Apple? Epic brought a very similar case against Apple and lost. Both Apple and Epic are appealing that case to the Supreme Court, and now that Google has been convicted in a similar case, it might prompt the Supremes to weigh in and resolve the seeming inconsistencies in the interpretation of federal law.
This is a key moment in the long project to wrest antitrust away from the pro-monopoly side, who spent decades "training" judges to produce verdicts that run counter to the plain language of America's antitrust law:
There's 40 years' worth of bad precedent to overturn. The good news is that we've got the law on our side. Literally, the wording of the laws and the records of the Congressional debate leading to their passage, all militate towards the (incredibly obvious) conclusion that the purpose of anti-monopoly law is to fight monopoly, not defend it:
It's amazing to realize that we got into this monopoly quagmire because judges just literally refused to enforce the law. That's what makes one part of the jury verdict against Google so exciting: the jury found that Google's insistence that Play Store sellers use its payment processor was an act of illegal tying. Today, "tying" is an obscure legal theory, but few doctrines would be more useful in disenshittifying the internet. A company is guilty of illegal tying when it forces you to use unrelated products or services as a condition of using the product you actually want. The abandonment of tying led to a host of horribles, from printer companies forcing you to buy ink at $10,000/gallon to Livenation forcing venues to sell tickets through its Ticketmaster subsidiary.
The next phase of this comes when the judge decides on the penalty. Epic doesn't want cash damages ā it wants the judge to order Google to fulfill its promise of "an open, competitive Android ecosystem for all users and industry participants." They've asked the judge to order Google to facilitate third-party app stores, and to separate app stores from payment processors. As Stoller puts it, they want to "crush Googleās control over Android":
Google has sworn to appeal, surprising no one. The Times's expert says that they will have a tough time winning, given how clear the verdict was. Whatever this means for Google and Android, it means a lot for a future free from monopolies.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
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The promise of feudal security: "Surrender control over your digital life so that we, the wise, giant corporation, can ensure that you aren't tricked into catastrophic blunders that expose you to harm":
The tech giant is a feudal warlord whose platform is a fortress; move into the fortress and the warlord will defend you against the bandits roaming the lawless land beyond its walls.
That's the promise, here's the failure: What happens when the warlord decides to attack you? If a tech giant decides to do something that harms you, the fortress becomes a prison and the thick walls keep you in.
Apple does this all the time: "click this box and we will use our control over our platform to stop Facebook from spying on you" (Ios as fortress). "No matter what box you click, we will spy on you and because we control which apps you can install, we can stop you from blocking our spying" (Ios as prison):
But it's not just Apple ā any corporation that arrogates to itself the right to override your own choices about your technology will eventually yield to temptation, using that veto to help itself at your expense:
Once the corporation puts the gun on the mantelpiece in Act One, they're begging their KPI-obsessed managers to take it down and shoot you in the head with it in anticipation of of their annual Act Three performance review:
One particularly pernicious form of control is "trusted computing" and its handmaiden, "remote attestation." Broadly, this is when a device is designed to gather information about how it is configured and to send verifiable testaments about that configuration to third parties, even if you want to lie to those people:
New HP printers are designed to continuously monitor how you use them ā and data-mine the documents you print for marketing data. You have to hand over a credit-card in order to use them, and HP reserves the right to fine you if your printer is unreachable, which would frustrate their ability to spy on you and charge you rent:
Under normal circumstances, this technological attack would prompt a defense, like an aftermarket mod that prevents your printer's computer from monitoring you. This is "adversarial interoperability," a once-common technological move:
An adversarial interoperator seeking to protect HP printer users from HP could gin up fake telemetry to send to HP, so they wouldn't be able to tell that you'd seized the means of computation, triggering fines charged to your credit card.
Enter remote attestation: if HP can create a sealed "trusted platform module" or a (less reliable) "secure enclave" that gathers and cryptographically signs information about which software your printer is running, HP can detect when you have modified it. They can force your printer to rat you out ā to spill your secrets to your enemy.
Remote attestation is already a reliable feature of mobile platforms, allowing agencies and corporations whose services you use to make sure that you're perfectly defenseless ā not blocking ads or tracking, or doing anything else that shifts power from them to you ā before they agree to communicate with your device.
What's more, these "trusted computing" systems aren't just technological impediments to your digital wellbeing ā they also carry the force of law. Under Section 1201 of the Digital Millennium Copyright Act, these snitch-chips are "an effective means of access control" which means that anyone who helps you bypass them faces a $500,000 fine and a five-year prison sentence for a first offense.
Feudal security builds fortresses out of trusted computing and remote attestation and promises to use them to defend you from marauders. Remote attestation lets them determine whether your device has been compromised by someone seeking to harm you ā it gives them a reliable testament about your device's configuration even if your device has been poisoned by bandits:
The fact that you can't override your computer's remote attestations means that you can't be tricked into doing so. That's a part of your computer that belongs to the manufacturer, not you, and it only takes orders from its owner. So long as the benevolent dictator remains benevolent, this is a protective against your own lapses, follies and missteps. But if the corporate warlord turns bandit, this makes you powerless to stop them from devouring you whole.
With that out of the way, let's talk about debt.
Debt is a normal feature of any economy, but today's debt plays a different role from the normal debt that characterized life before wages stagnated and inequality skyrocketed. 40 years ago, neoliberalism ā with its assaults on unions and regulations ā kicked off a multigenerational process of taking wealth away from working people to make the rich richer.
Have you ever watched a genius pickpocket like Apollo Robbins work? When Robins lifts your wristwatch, he curls his fingers around your wrist, expertly adding pressure to simulate the effect of a watchband, even as he takes away your watch. Then, he gradually releases his grip, so slowly that you don't even notice:
For the wealthy to successfully impoverish the rest of us, they had to provide something that made us feel like we were still doing OK, even as they stole our wages, our savings, and our futures. So, even as they shipped our jobs overseas in search of weak environmental laws and weaker labor protection, they shared some of the savings with us, letting us buy more with less. But if your wages keep stagnating, it doesn't matter how cheap a big-screen TV gets, because you're tapped out.
So in tandem with cheap goods from overseas sweatshops, we got easy credit: access to debt. As wages fell, debt rose up to fill the gap. For a while, it's felt OK. Your wages might be falling off, the cost of health care and university might be skyrocketing, but everything was getting cheaper, it was so easy to borrow, and your principal asset ā your family home ā was going up in value, too.
This period was a "bezzle," John Kenneth Galbraith's name for "The magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." It's the moment after Apollo Robbins has your watch but before you notice it's gone. In that moment, both you and Robbins feel like you have a watch ā the world's supply of watch-derived happiness actually goes up for a moment.
There's a natural limit to debt-fueled consumption: as Michael Hudson says, "debts that can't be paid, won't be paid." Once the debtor owes more than they can pay back ā or even service ā creditors become less willing to advance credit to them. Worse, they start to demand the right to liquidate the debtor's assets. That can trigger some pretty intense political instability, especially when the only substantial asset most debtors own is the roof over their heads:
"Debts that can't be paid, won't be paid," but that doesn't stop creditors from trying to get blood from our stones. As more of us became bankrupt, the bankruptcy system was gutted, turned into a punitive measure designed to terrorize people into continuing to pay down their debts long past the point where they can reasonably do so:
Enter "subprime" ā loans advanced to people who stand no meaningful chance of every paying them back. We all remember the subprime housing bubble, in which complex and deceptive mortgages were extended to borrowers on the promise that they could either flip or remortgage their house before the subprime mortgages detonated when their "teaser rates" expired and the price of staying in your home doubled or tripled.
Subprime housing loans were extended on the belief that people would meekly render themselves homeless once the music stopped, forfeiting all the money they'd plowed into their homes because the contract said they had to. For a brief minute there, it looked like there would be a rebellion against mass foreclosure, but then Obama and Timothy Geithner decreed that millions of Americans would have to lose their homes to "foam the runways" for the banks:
That's one way to run a subprime shop: offer predatory loans to people who can't afford them and then confiscate their assets when they ā inevitably ā fail to pay their debts off.
But there's another form of subprime, familiar to loan sharks through the ages: lend money at punitive interest rates, such that the borrower can never repay the debt, and then terrorize the borrower into making payments for as long as possible. Do this right and the borrower will pay you several times the value of the loan, and still owe you a bundle. If the borrower ever earns anything, you'll have a claim on it. Think of Americans who borrowed $79,000 to go to university, paid back $190,000 and still owe $236,000:
This kind of loan-sharking is profitable, but labor-intensive. It requires that the debtor make payments they fundamentally can't afford. The usurer needs to get their straw right down into the very bottom of the borrower's milkshake and suck up every drop. You need to convince the debtor to sell their wedding ring, then dip into their kid's college fund, then steal their father's coin collection, and, then break into cars to steal the stereos. It takes a lot of person-to-person work to keep your sucker sufficiently motivated to do all that.
This is where digital meets subprime. There's $1T worth of subprime car-loans in America. These are pure predation: the lender sells a beater to a mark, offering a low down-payment loan with a low initial interest rate. The borrower makes payments at that rate for a couple of months, but then the rate blows up to more than they can afford.
Trusted computing makes this marginal racket into a serious industry. First, there's the ability of the car to narc you out to the repo man by reporting on its location. Tesla does one better: if you get behind in your payments, your Tesla immobilizes itself and phones home, waits for the repo man to come to the parking lot, then it backs itself out of the spot while honking its horn and flashing its lights:
That immobilization trick shows how a canny subprime car-lender can combine the two kinds of subprime: they can secure the loan against an asset (the car), but also coerce borrowers into prioritizing repayment over other necessities of life. After your car immobilizes itself, you just might decide to call the dealership and put down your credit card, even if that means not being able to afford groceries or child support or rent.
One thing we can say about digital tools: they're flexible. Any sadistic motivational technique a lender can dream up, a computerized device can execute. The subprime car market relies on a spectrum of coercive tactics: cars that immobilize themselves, sure, but how about cars that turn on their speakers to max and blare a continuous recording telling you that you're a deadbeat and demanding payment?
The more a subprime lender can rely on a gadget to torment you on their behalf, the more loans they can issue. Here, at last, is a form of automation-driven mass unemployment: normally, an economy that has been fully captured by wealthy oligarchs needs squadrons of cruel arm-breakers to convince the plebs to prioritize debt service over survival. The infinitely flexible, tireless digital arm-breakers enabled by trusted computing have deprived all of those skilled torturers of their rightful employment:
The world leader in trusted computing isn't cars, though ā it's phones. Long before anyone figured out how to make a car take orders from its manufacturer over the objections of its driver, Apple and Google were inventing "curating computing" whose app stores determined which software you could run and how you could run it.
Back in 2021, Indian subprime lenders hit on the strategy of securing their loans by loading borrowers' phones up with digital arm-breaking software:
The software would gather statistics on your app usage. When you missed a payment, the phone would block you from accessing your most frequently used app. If that didn't motivate you to pay, you'd lose your second-most favorite app, then your third, fourth, etc.
This kind of digital arm-breaking is only possible if your phone is designed to prioritize remote instructions ā from the manufacturer and its app makers ā over your own. It also only works if the digital arm-breaking company can confirm that you haven't jailbroken your phone, which might allow you to send fake data back saying that your apps have been disabled, while you continue to use those apps. In other words, this kind of digital sadism only works if you've got trusted computing and remote attestation.
Enter "Device Lock Controller," an app that comes pre-installed on some Google Pixel phones. To quote from the app's description: "Device Lock Controller enables device management for credit providers. Your provider can remotely restrict access to your device if you don't make payments":
https://lemmy.world/post/13359866
Google's pitch to Android users is that their "walled garden" is a fortress that keeps people who want to do bad things to you from reaching you. But they're pre-installing software that turns the fortress into a prison that you can't escape if they decide to let someone come after you.
There's a certain kind of economist who looks at these forms of automated, fine-grained punishments and sees nothing but a tool for producing an "efficient market" in debt. For them, the ability to automate arm-breaking results in loans being offered to good, hardworking people who would otherwise be deprived of credit, because lenders will judge that these borrowers can be "incentivized" into continuing payments even to the point of total destitution.
This is classic efficient market hypothesis brain worms, the kind of cognitive dead-end that you arrive at when you conceive of people in purely economic terms, without considering the power relationships between them. It's a dead end you navigate to if you only think about things as they are today ā vast numbers of indebted people who command fewer assets and lower wages than at any time since WWII ā and treat this as a "natural" state: "how can these poors expect to be offered more debt unless they agree to have their all-important pocket computers booby-trapped?"
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
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The foundational tenet of "the Cult of Mac" is that buying products from a $3t company makes you a member of an oppressed ethnic minority and therefore every criticism of that corporation is an ethnic slur:
Call it "Apple exceptionalism" ā the idea that Apple, alone among the Big Tech firms, is virtuous, and therefore its conduct should be interpreted through that lens of virtue. The wellspring of this virtue is conveniently nebulous, which allows for endless goal-post shifting by members of the Cult of Mac when Apple's sins are made manifest.
Take the claim that Apple is "privacy respecting," which is attributed to Apple's business model of financing its services though cash transactions, rather than by selling it customers to advertisers. This is the (widely misunderstood) crux of the "surveillance capitalism" hypothesis: that capitalism is just fine, but once surveillance is in the mix, capitalism fails.
Apple, then, is said to be a virtuous company because its behavior is disciplined by market forces, unlike its spying rivals, whose ability to "hack our dopamine loops" immobilizes the market's invisible hand with "behavior-shaping" shackles:
Apple makes a big deal out of its privacy-respecting ethos, and not without some justification. After all, Apple went to the mattresses to fight the FBI when they tried to force Apple to introduced defects into its encryption systems:
And Apple gave Ios users the power to opt out of Facebook spying with a single click; 96% of its customers took them up on this offer, costing Facebook $10b (one fifth of the pricetag of the metaverse boondoggle!) in a single year (you love to see it):
Bruce Schneier has a name for this practice: "feudal security." That's when you cede control over your device to a Big Tech warlord whose "walled garden" becomes a fortress that defends you against external threats:
The keyword here is external threats. When Apple itself threatens your privacy, the fortress becomes a prison. The fact that you can't install unapproved apps on your Ios device means that when Apple decides to harm you, you have nowhere to turn. The first Apple customers to discover this were in China. When the Chinese government ordered Apple to remove all working privacy tools from its App Store, the company obliged, rather than risk losing access to its ultra-cheap manufacturing base (Tim Cook's signal accomplishment, the one that vaulted him into the CEO's seat, was figuring out how to offshore Apple manufacturing to China) and hundreds of millions of middle-class consumers:
Killing VPNs and other privacy tools was just for openers. After Apple caved to Beijing, the demands kept coming. Next, Apple willingly backdoored all its Chinese cloud services, so that the Chinese state could plunder its customers' data at will:
This was the completely foreseeable consequence of Apple's "curated computing" model: once the company arrogated to itself the power to decide which software you could run on your own computer, it was inevitable that powerful actors ā like the Chinese Communist Party ā would lean on Apple to exercise that power in service to its goals.
Unsurprisingly, the Chinese state's appetite for deputizing Apple to help with its spying and oppression was not sated by backdooring iCloud and kicking VPNs out of the App Store. As recently as 2022, Apple continued to neuter its tools at the behest of the Chinese state, breaking Airdrop to make it useless for organizing protests in China:
But the threat of Apple turning on its customers isn't limited to China. While the company has been unwilling to spy on its users on behalf of the US government, it's proven more than willing to compromise its worldwide users' privacy to pad its own profits. Remember when Apple let its users opt out of Facebook surveillance with one click? At the very same time, Apple was spinning up its own commercial surveillance program, spying on Ios customers, gathering the very same data as Facebook, and for the very same purpose: to target ads. When it came to its own surveillance, Apple completely ignored its customers' explicit refusal to consent to spying, spied on them anyway, and lied about it:
Here's the thing: even if you believe that Apple has a "corporate personality" that makes it want to do the right thing, that desire to be virtuous is dependent on the constraints Apple faces. The fact that Apple has complete legal and technical control over the hardware it sells ā the power to decide who can make software that runs on that hardware, the power to decide who can fix that hardware, the power to decide who can sell parts for that hardware ā represents an irresistible temptation to enshittify Apple products.
"Constraints" are the crux of the enshittification hypothesis. The contagion that spread enshittification to every corner of our technological world isn't a newfound sadism or indifference among tech bosses. Those bosses are the same people they've always been ā the difference is that today, they are unconstrained.
Having bought, merged or formed a cartel with all their rivals, they don't fear competition (Apple buys 90+ companies per year, and Google pays it an annual $26.3b bribe for default search on its operating systems and programs).
Having captured their regulators, they don't fear fines or other penalties for cheating their customers, workers or suppliers (Apple led the coalition that defeated dozens of Right to Repair bills, year after year, in the late 2010s).
Having wrapped themselves in IP law, they don't fear rivals who make alternative clients, mods, privacy tools or other "adversarial interoperability" tools that disenshittify their products (Apple uses the DMCA, trademark, and other exotic rules to block third-party software, repair, and clients).
True virtue rests not merely in resisting temptation to be wicked, but in recognizing your own weakness and avoiding temptation. As I wrote when Apple embarked on its "curated computing" path, the company would eventually ā inevitably ā use its power to veto its customers' choices to harm those customers:
Which is where we're at today. Apple ā uniquely among electronics companies ā shreds every device that is traded in by its customers, to block third parties from harvesting working components and using them for independent repair:
Apple engraves microscopic Apple logos on those parts and uses these as the basis for trademark complaints to US customs, to block the re-importation of parts that escape its shredders:
Apple entered into an illegal price-fixing conspiracy with Amazon to prevent used and refurbished devices from being sold in the "world's biggest marketplace":
Why is Apple so opposed to independent repair? Well, they say it's to keep users safe from unscrupulous or incompetent repair technicians (feudal security). But when Tim Cook speaks to his investors, he tells a different story, warning them that the company's profits are threatened by customers who choose to repair (rather than replace) their slippery, fragile glass $1,000 pocket computers (the fortress becomes a prison):
All this adds up to a growing mountain of immortal e-waste, festooned with miniature Apple logos, that our descendants will be dealing with for the next 1,000 years. In the face of this unspeakable crime, Apple engaged in a string of dishonest maneuvers, claiming that it would support independent repair. In 2022, Apple announced a home repair program that turned out to be a laughably absurd con:
Let's pause here a moment and remember that Apple once stood for independent repair, and celebrated the independent repair technicians that kept its customers' beloved Macs running:
Whatever virtue lurks in Apple's corporate personhood, it is no match for the temptation that comes from running a locked-down platform designed to capture IP rights so that it can prevent normal competitive activities, like fixing phones, processing payments, or offering apps.
When Apple rolled out the App Store, Steve Jobs promised that it would save journalism and other forms of "content creation" by finally giving users a way to pay rightsholders. A decade later, that promise has been shattered by the app tax ā a 30% rake on every in-app transaction that can't be avoided because Apple will kick your app out of the App Store if you even mention that your customers can pay you via the web in order to avoid giving a third of their content dollars to a hardware manufacturer that contributed nothing to the production of that material:
Among the apps that Apple also refuses to allow on Ios is third-party browsers. Every Iphone browser is just a reskinned version of Apple's Safari, running on the same antiquated, insecure Webkit browser engine. The fact that Webkit is incomplete and outdated is a feature, not a bug, because it lets Apple block web apps ā apps delivered via browsers, rather than app stores:
Last month, the EU took aim at Apple's veto over its users' and software vendors' ability to transact with one another. The newly in-effect Digital Markets Act requires Apple to open up both third-party payment processing and third-party app stores. Apple's response to this is the very definition of malicious compliance, a snake's nest of junk-fees, onerous terms of service, and petty punitive measures that all add up to a great, big "Go fuck yourself":
But Apple's bullying, privacy invasion, price-gouging and environmental crimes are global, and the EU isn't the only government seeking to end them. They're in the firing line in Japan:
And now, famously, the US Department of Justice is coming for Apple, with a bold antitrust complaint that strikes at the heart of Apple exceptionalism, the idea that monopoly is safer for users than technological self-determination:
There's passages in the complaint that read like I wrote them:
Apple wraps itself in a cloak of privacy, security, and consumer preferences to justify its anticompetitive conduct. Indeed, it spends billions on marketing and branding to promote the self-serving premise that only Apple can safeguard consumersā privacy and security interests. Apple selectively compromises privacy and security interests when doing so is in Appleās own financial interestāsuch as degrading the security of text messages, offering governments and certain companies the chance to access more private and secure versions of app stores, or accepting billions of dollars each year for choosing Google as its default search engine when more private options are available. In the end, Apple deploys privacy and security justifications as an elastic shield that can stretch or contract to serve Appleās financial and business interests.
After all, Apple punishes its customers for communicating with Android users by forcing them to do so without any encryption. When Beeper Mini rolled out an Imessage-compatible Android app that fixed this, giving Iphone owners the privacy Apple says they deserve but denies to them, Apple destroyed Beeper Mini:
https://blog.beeper.com/p/beeper-moving-forward
Tim Cook is on record about this: if you want to securely communicate with an Android user, you must "buy them an Iphone":
If your friend, family member or customer declines to change mobile operating systems, Tim Cook insists that you must communicate without any privacy or security.
Even where Apple tries for security, it sometimes fails ("security is a process, not a product" -B. Schneier). To be secure in a benevolent dictatorship, it must also be an infallible dictatorship. Apple's far from infallible: Eight generations of Iphones have unpatchable hardware defects:
https://checkm8.info/
And Apple's latest custom chips have secret-leaking, unpatchable vulnerabilities:
Apple's far from infallible ā but they're also far from benevolent. Despite Apple's claims, its hardware, operating system and apps are riddled with deliberate privacy defects, introduce to protect Apple's shareholders at the expense of its customers:
https://proton.me/blog/iphone-privacy
Now, antitrust suits are notoriously hard to make, especially after 40 years of bad-precedent-setting, monopoly-friendly antitrust malpractice. Much of the time, these suits fail because they can't prove that tech bosses intentionally built their monopolies. However, tech is a written culture, one that leaves abundant, indelible records of corporate deliberations. What's more, tech bosses are notoriously prone to bragging about their nefarious intentions, committing them to writing:
Apple is no exception ā there's an abundance of written records that establish that Apple deliberately, illegally set out to create and maintain a monopoly:
Apple claims that its monopoly is beneficent, used to protect its users, making its products more "elegant" and safe. But when Apple's interests conflict with its customers' safety and privacy ā and pocketbooks ā Apple always puts itself first, just like every other corporation. In other words: Apple is unexceptional.
The Cult of Mac denies this. They say that no one wants to use a third-party app store, no one wants third-party payments, no one wants third-party repair. This is obviously wrong and trivially disproved: if no Apple customer wanted these things, Apple wouldn't have to go to enormous lengths to prevent them. The only phones that an independent Iphone repair shop fixes are Iphones: which means Iphone owners want independent repair.
The rejoinder from the Cult of Mac is that those Iphone owners shouldn't own Iphones: if they wanted to exercise property rights over their phones, they shouldn't have bought a phone from Apple. This is the "No True Scotsman" fallacy for distraction-rectangles, and moreover, it's impossible to square with Tim Cook's insistence that if you want private communications, you must buy an Iphone.
Apple is unexceptional. It's just another Big Tech monopolist. Rounded corners don't preserve virtue any better than square ones. Any company that is freed from constraints ā of competition, regulation and interoperability ā will always enshittify. Apple ā being unexceptional ā is no exception.
Name your price for 18 of my DRM-free ebooks and support the Electronic Frontier Foundation with the Humble Cory Doctorow Bundle.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
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This Saturday (May 20), Iāll be at the GAITHERSBURG Book Festival with my novel Red Team Blues; then on May 22, Iām keynoting Public Knowledgeās Emerging Tech conference in DC.
On May 23, Iāll be in TORONTO for a book launch thatās part of WEPFest, a benefit for the West End Phoenix, onstage with Dave Bidini (The Rheostatics), Ron Diebert (Citizen Lab) and the whistleblower Dr Nancy Olivieri.
Itās no longer controversial to claim that Big Tech is a parasite on the news business. But thereās still a raging controversy over the nature of the parasitism, and, much more importantly, what to do about it.
This week on EFFās Deeplinks blog, I kick off a new series on the abusive relationship between Big Tech and the news, analyzing four different dirty practices and proposing policy answers to all four:
The context here is that various governments around the world have taken notice of the tech/news problem, and are chasing a counterproductive āsolutionāāāāthe ālink tax,ā where tech firms are required to pay for the links and short snippets their users or news search-tools make to news-stories. In some cases, the ātaxā is indirect: tech is required to negotiate a payment to make up for other misdeeds (like ripping publishers off with ad fraud).
You can argue that this isnāt a link tax, itās just pressure to bargain, but because these rules typically ban platforms from simply blocking publishersā content if they canāt reach an agreement, they become link taxes: āYou must carry links, and you must pay the sites you link toā isnāt meaningfully different from āYou must pay for linking to those sites.ā
This āmust-carryā dimensionāāārequiring tech firms to publish links to sites they donāt want to link toāāāhas lots of things wrong with it, but in the US, must-carry has a showstopper bug: it contravenes the First Amendment and any law with a must-carry provision is unlikely to survive a court challenge. So people who care about protecting the news from Big Tech predatorsāāālike meāāāneed to try other approaches.
But no matter where you are, requiring tech to pay fees to news is the wrong approach. For one thing, itās a solution that only works for so long as Big Tech stays big: that means that efforts to break up Big Tech, force it to pay taxes and fines, and limit its profits (say, through privacy laws that end surviellance ads) are incompatible with link taxes and adjacent proposals.
The big risk here is that news outlets will become partisans in the fight against shrinking Big Tech, because news companiesā destinies will be linked to the tech giantsā own fate. More immediately, thereās the risk that news companies that depend on negotiating payments from Big Tech will not act as the effective watchdogs we need them to be.
Thatās not just a hypothetical risk: in Canada, Big Tech entered into negotiations with the Toronto Starāāāthe countryās widest-circulating paperāāāahead of a proposed ānews bargaining codeā that was working its way through Parliament. Once that settlement was reached, the Star abruptly killed āDefanging Techā its excellent critical series on the tech giants it had just climbed into bed with:
https://www.thestar.com/news/big-tech.html
Another important risk from ābargaining codesā and link taxes is that they tend to favor the largest and/or most sensationalist news companies, who have the leverage to bargain for the highest sums. In Australia, Rupert Murdochās NewsCorp bargained for a sizable payment from the tech sectorāāābut then it laid off its news workers. Merely transferring money to media giants doesnāt mean an increase in investment in news. Thatās especially true in the Canadian context, where a US vulture-capitalist fund bought out the National Post and its nationwide affiliates and then loaded the chain up with debt, while hacking newsroom staff to the bone and beyond. Thereās no reason to think that tech payments to the Post will go anywhere except to the financial speculators who are its major creditors.
Meanwhile, the proposed US version, JCPA, has a payout schedule based on the number of clicks a news outlet generates for each platformāāāa metric that will see the lionās share of money going to the far-right clickbait sites that push conspiracy theories, disinformation, and culture-war nonsenseāāāand see floods of social media traffic as a result.
Any solution to the tech/news conflict should benefit the news, and the workers who produce itāāānot the shareholders of the giant companies whose short-sighted consolidation, mass firings, and sell-offs of physical plant created the hyper-concentrated, brittle news sector of today:
Luckily for the news, thereās a whole bushel of policy levers we can yank on to make the news better, stronger, and more sustainable, even as tech monopolies and the surveillance they rely on are consigned to the scrapheap of history.
In this seriesāāāwhich will publish weekly over the next four weeksāāāIāll dig into four policy prescriptions for making a better news that is free of Big Tech, not dependent on it:
I. Break up ad-tech: Following the lead of Senator Mike Leeās AMERICA Act, we must end the ad-tech sectorās self-dealing. Ad-tech scoops up 51% of every ad-dollar. Thatās thanks to the ad-tech companies practice of offering marketplaces in which they represent both advertisers and publishers: thatās like a game where the referee pays the salaries of the head coaches for both teams. If we pare back the ad-tech tax to, say 10% and split the difference between advertisers and publishers, then every publisher will see an immediate 20% increase in their top-line revenue, without having to ābargainā for a āvoluntaryā payment from tech companies.
II. Ban surveillance ads: America is long overdue for a federal privacy law with a private right of action. When we finally get such a law, surveillance advertising is dead. Ad-tech has long argued that people like ads, so long as theyāre ārelevant,ā a state that can only be attained through continuous, invasive surveillance. In reality, no one consents to surveillanceāāāwhich is why, when Apple gave its users a one-click opt-out from spying, 94% blocked spying (unfortunately, Apple only blocks its competitors from spying on Apple customers; even if you opt out of spying on your Apple device, Apple will continue to spy on you).
The natural successor to surveillance ads is context ads: ads based on the content youāre looking at, not the surveillance data an ad-tech platform amassed on you without your consent. Context ads are intrinsically better for publishers: no publisher will ever know as much about a readerās behavior than a spying ad-tech platform, but no ad-tech platform will ever know as much about a publisherās own content than the publisher does.
That means that the benefits of a ban on surveillance ads wouldnāt just be an end to creepy internet spyingāāāit would also transfer power from tech companies to news companies, online performers and other creative workers.
III. Open up app stores: 30% of every dollar spent on app-based digital subscriptions is claimed by two companies, Google and Apple, the mobile duopoly. This app store tax is a pure transfer from news to tech. The EUās Digital Markets Act and the proposed US Open App Markets Act are both designed to kill the app store tax. Dropping mobile payment processing fees from 30% to the industry standard 2ā5% will instantaneously make increase the revenue from every subscriber by 25% or more.
IV. Make social media end-to-end: Tech platformsā predictable enshittification strategy always ends with publishers no longer being able to reach their subscribers unless they pay to āboostā their content. Social media companies claim to be facilitators of the connection between publishers and audiences, but in reality, they take those audiences hostage and ransom them off to publishers. An end-to-end rule for social media would require platforms to reliably deliver material published by accounts to their own followers, who asked to see that material.
The debate over news and tech starts from the erroneousāāāand dangerousāāāassumption that the platforms are stealing the news mediaās content, by letting their users talk about, quote and link to the news. This isnāt theft: if youāre not allowed to talk about the news, then itās not the newsāāāitās a secret.
The platforms are stealing from news, though: theyāre not stealing content, theyāre stealing money. Between sky-high ad-tech rakes, app store taxes, and ransom demands to reach your own subscribers, the tech companies have grabbed the majority of money generated by news workers and the companies they work for.
Ending this theft will produce a more sustainable and robust source of funding for the newsāāāwithout compromising news companiesā ability to aggressively hold tech to account, and without propping up financialized, hollowed-out media monopolies at the expense of an independent press.
Catch me on tour with Red Team Blues in Toronto, DC, Gaithersburg, Oxford, Hay, Manchester, Nottingham, London, and Berlin!
If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
[Image ID: EFF's banner for the save news series; the word 'NEWS' appears in pixelated, gothic script in the style of a newspaper masthead. Beneath it in four entwined circles are logos for breaking up ad-tech, ending surveillance ads, opening app stores, and end-to-end delivery.]
How Apple could open its App Store without really opening its App Store
Last week, Mark Gurman published a blockbuster story in Bloomberg, revealing Appleās plan to allow third-party Ios App Stores to comply with the EUās Digital Markets Act. Apple didnāt confirm it, but I believe it. Gurmanās sourcing was impeccable:
This is a huge deal. While Appleās ācuratedā approach to software delivers benefits to users, those benefits are unreliable. As I explain in a new post for EFFās Deeplinks blog, Apple only fights for its users when doing so is good for its shareholders. But when something is good for Apple shareholders and bad for its customers, the shareholders win, every time:
To see how this works, just consider Appleās record in China. First, Apple removed all working VPN apps from its Chinese App Store, to facilitate state spying on its Chinese customers:
Apple claims that its App Store is a fortress that protects its users against external threats. But the Iphone is designed to block its owners from choosing rival app stores, which means that when Apple betrays its customers, the fortress walls become prison walls. Governments know this, and they rely on it when they demand that Apple compromise its customers to totalitarian surveillance:
Now, thereās an interesting contrast here. When the DFBI demanded that Apple backdoor its devices to aid in the prosecution of the San Bernardino shooters, Apple took its customersā side, bravely refusing to compromise its devices:
That was the right call to make. Does it mean that Apple doesnāt value privacy for its Chinese customersā privacy as much as it values it for American customers? Does it mean that Apple respects the CCP more than it respects the FBI?
Not at all. It just means that China was able to threaten Appleās shareholders in ways that the DoJ couldnāt. Standing up to the Chinese government would threaten Appleās access to 350 million middle-class Chinese potential customers, and an equal number of Chinese low-waged workers who could be tapped to manufacture Apple devices under brutal labor conditions at rock-bottom prices.
Standing up to the FBI didnāt threaten Appleās shareholders the way that standing up to the CCP would, so Apple stood up for its American users and sold out its Chinese users.
But that doesnāt mean that US Apple customers are safe. In the US, Apple defends its customers from rival commercial threats, but actively prevents those customers from defending themselves against Appleās own commercial threats.
Famously, Apple took its customers side over Facebookās, adding an amazing, best-in-class, one-click opt-out to tracking, which is costing Facebook $10 billion per year. You love to see it:
On the other handā¦Apple secretly continued to its customersā clicks, taps, gestures, apps and keystrokes, even after those customers explicitly opted out of tracking, and used that data to build nonconsensual dossiers on every Ios owner for use in its own ad-targeting business:
Apple defended its customers against Facebookās predation, but not its own. When Appleās shareholder interests are on the line, Appleās App Store becomes a prison, not a fortress: because Apple controls which software you can install, it can (and does) block you from installing apps that extend its block on commercial surveillance to Apple itself.
Then thereās the app tax. Apple charges app makers a 30% commission on all their sales, which means that certain businesses literally canāt exist. Take audiobooks: audiobook sellers have 20% gross margins on their wares. If they sell their audiobooks through apps and pay a 30% vig to Apple, they lose money on every sale. Thus, the only Ios app that will sell you an audiobook is Appleās own Apple Books.
Apple Books requires authors and publishers to wrap their books in Appleās DRM, and the DMCA makes it a felony to supply your own readers with a tool to convert the books you published to a rivalās format. That means that readers have to surrender every book theyāve bought on Apple Books if you switch platforms and ask them to follow you. Itās not just social media that turns creators into digital sharecroppers.
Itās not any better when it comes to the businesses that can eke out an existence under the app taxās yoke. These businesses pass their extra costs on to Appleās customers, who ultimately bear the app tax burden. Because every app maker has to pay the app tax, they all tacitly collude to hike their prices. And because mobile is a duopoly, the app tax is also buried in every Android app, because Google has exactly the same app tax as Apple (Google will also be forced to remove barriers to third-party app stores under the DMA).
All this to say that it is a terrible error to impute morals or values to giant corporations. Apple and Google are both immortal colony organisms that view human beings as inconvenient gut flora. They are remorseless paperclip-maximizing artificial life forms. They are, in other words, limited liability corporations.
āIf youāre not paying for the product, youāre the productā sounds good, but itās absolutely wrong. You canāt bribe a paperclip-maximizing colony organism into treating you with dignity by spending money with it. Companiesā treatment of you depends on what they can get away withāāānot their āpersonalities.ā Apple doesnāt respect privacyāāāit thinks it can make more paperclips by giving some of its customers some privacy. As soon as Apple finds a way to make more paperclips by spying on those you (say, by starting its own internal adtech business), it will spy on you, and the $1000 you spent on your Iphone will not save you.
Once you understand that corporate conduct is a matter of power, not personality, then you understand that the way to prevent companies from harming you is to meet their power with countervailing power. This is why tech worker unions matter: organized labor has historically been the most important check on corporate power, which is why tech companies are so vicious in the face of union drives:
Beyond labor, two other forces can discipline corporate conduct: regulation and competition. The biggest threat to a businessās customers is that businessās own shareholders. A company might defend its customers against a rival, but they will never defend its customers against its own shareholders.
Regulation and competition both impose costs on shareholder who abuse their customers: regulation can punish bad conduct with fines that come out of shareholder profits, and competition can create a race to the top as businesses seek to poach each othersā customers by offering them progressively better deals.
Which brings me back to the DMA, the EUās pending regulation forcing Apple to open its app store, and Appleās leaked plans to comply with the regulation. This is (potentially) great news, because rival app stores can offer Apple customers an escape hatch from mandatory surveillance and price-gouging.
But the devil is in the details. There are so many ways that Apple can use malicious compliance to appear to offer a competitive app marketplace without actually doing so. In my article for EFF, I offer a checklist of fuckieries to watch for in Appleās plans:
⢠Forcing software authors in Appleās Developer Program. Not only does this force developers to pay Apple for the privilege of selling to Iphone owners, but it also forces them to sign onto a Bible-thick EULA that places all kinds of arbitrary limits on their software. Itās not enough for Apple to open up to rival app storesāāāit also must not sabotage rivals who produce competing SDKs for Ios.
⢠Forcing App Store criteria on rival app stores. Apple mustnāt be permitted to turn legitimate vetting for security or privacy risks into editorial control over which apps Ios users are allowed to use. Apple may not want to carry games that highlight labor conditions in high-tech manufacturing sweatshops:
Itās fine to say that app stores must submit to third-party security certification, but they should be free to choose Apple out of a field of qualified privacy certifiers.
⢠Requiring third-party app stores to process payments with Apple. The app tax should be disciplined by competition. Allowing Apple to extract 30% from transactions in its rivalsā app stores would defeat the whole purpose of the DMA.
⢠Arbitrarily revoking third party app stores. Itās foreseeable that some third-party app stores would be so incompetent or malicious that Apple could revoke their ability to operate on Ios devices. However, if Apple were to pretextually shut down third-party app stores, it could sour Iphone owners off the whole prospect of getting apps elsewhere.
Apple must not be permitted to use its power to shut down app stores in an anti-competitive way, but distinguishing pretextual shutdowns from bona fide ones is a time-consuming, fact-intensive process that could leave customers in limbo for years.
One way to manage this is for regulators to dangle massive fines for pretextual shutdowns. In addition to this, Apple must make some provision to continue its customersā access to the apps, media and data from the app stores it shuts down.
All of this points to the role that regulators pay, even (especially) when it comes to disciplining companies through competition. The DMA is overseen by the EU Commission, which has the power to investigate, verify and approve (or reject) the standards that Apple sets for privacy, security, and app stores themselves. The Commission should anticipate and fund the regulators needed to manage these tasks quickly, thoroughly and efficiently.
Finally, Europeans shouldnāt have all the fun. If Apple can do this for Europeans, it can do it for every Apple device owner. If you bought an Ios device, itās yours, not Appleās, and you should have the right to technological self determination that Europeans get when it comes to deciding which software it runs.
Image:
Electronic Frontier Foundation
https://www.eff.org/files/banner_library/eu-flag-11.png
CC BY 3.0:
https://creativecommons.org/licenses/by/3.0/us/
[Image ID: An EU flag. The blue background has a fine tracery of etched circuitry.]