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Apple Isn’t Your Friend

Apple is being praised for defending its users’ privacy. But its main concern is its bottom line.

Apple has become a cause célèbre of late — not for releasing a slick, new gadget, but for purportedly defending civil liberties. Last month, a California court ordered Apple to help the FBI unlock the iPhone of Syed Farook — one of the shooters in the San Bernardino massacre — by creating software that bypasses some its own security systems, enabling the FBI to hack into its devices more easily. Apple refused, arguing that doing so would jeopardize First Amendment freedoms, undermine privacy, and betray user trust.

That non-cooperation has earned them the praise of the media, other Silicon Valley companies, and even Edward Snowden. And Apple’s intransigence is certainly welcome. But a dose of skepticism is also warranted. Apple has many possible motivations for stonewalling the FBI, and the company’s defense of civil liberties is at odds with its, at best, mixed track record.

Two years ago, Snowden himself revealed information suggesting that Apple had helped the NSA create exactly the kinds of backdoors it now disavows. Before privacy and security became hot-button public issues, Apple was just as willing as other Silicon Valley giants to comply with the government’s spying agencies.

The company’s new stance may well be part of a long-term marketing maneuver aimed at privacy-conscious potential buyers, or it could be motivated by something else entirely. The bottom line is, Apple is most concerned with profits — and its moves regarding privacy and civil liberties should be interpreted with this basic fact in mind.

Apple’s approach to privacy in China underscores its elastic ethics. There, Apple has allowed the government to perform security audits on devices, and houses data from Chinese users on servers run by China Telecom. Both practices have potentially serious security implications for the country’s Apple users.

Why the willingness to play ball with the Chinese government? Sales growth in the US is stalled, and China is Apple’s largest foreign market. So the tech giant is walking an international tightrope, balancing the need to telegraph its commitment to privacy with the pressure to cooperate with governments in key markets.

Indeed, the same profit motive that might compel Apple to defend privacy rights has also spurred the company — specifically Tim Cook, today’s hero of the privacy movement — to rework its supply chain into one of the most ruthless in the world. Within its East Asia network, which makes many of the components that go into Apple devices, the company uses competition to drive down wages and working conditions.

Also key to Apple’s success are rapid product turnover and tiny inventories. Cook has compared tech products to dairy — like milk, an iPhone cannot spend too long on a warehouse or store shelf before it spoils. But if consumers get an ultra-fresh product, small inventories mean bursts of breakneck production for workers at Apple’s suppliers.

As Apple perfects its just-in-time model, this kind of sped-up work regimen is becoming the norm. Employees on an iPhone assembly line put in a motherboard every 3.75 seconds — and if a co-worker on the line is on break, they’re forced to work even faster. Hourly quotas set out work tasks, and the pace increases if workers meet them. The tragic result of such practices came into public view in 2010, when fourteen workers at Foxconn, one of Apple’s major suppliers, committed suicide.

The deaths forced the tech company to pledge greater oversight and enact rules like a maximum work week of sixty hours and a ban on child labor. Yet investigations in the years since have uncovered worker deaths, serious injuries, and massive violations of the (still very lax) standards — overwork, unpaid wages, child labor, unliveable worker housing.

In 2015, a report from China Labour Watch found that more than half of workers at Pegatron (a Foxconn competitor that pays even lower wages) worked over sixty hours per week, and a third put in over ninety hours of overtime a month.

Even time off tends to be colonized by the job. As an undercover BBC journalist described:

Every time I got back to the dormitories, I wouldn’t want to move. Even if I was hungry I wouldn’t want to get up to eat. I just wanted to lie down and rest. I was unable to sleep at night because of the stress.

Just as scratching below the surface reveals how Apple’s production process degrades workers, digging beneath the company’s shiny environmental reports reveals the centrality of profit to Apple’s operation. While the company takes strategic advantage of relatively low-cost green credentials, its concern for the planet largely ends when the monetary costs of virtue are outweighed by the rewards of environmental vice.

Take the feel-good stories about how Apple now runs its US operations on 100 percent renewable power. This is a good thing, to be sure (keeping in mind, of course, that renewable power involves enormous government subsidies that help make it a good deal for Apple).

But Apple operations facilities account for just 1 percent of its total greenhouse gas emissions — and its manufacturing and transport footprint continues to rise. Apple’s small inventories and just-in-time production model necessitate that a significant number of products be moved by air, an incredibly emissions-intensive mode of transport. For Apple, then, degrading workers and the environment is intertwined.

Beyond transport and manufacture, Apple products are some of the best examples today of “planned obsolescence” — intentionally limiting product lifespans so people are forced to replace them frequently. The company’s devices are hard or impossible to repair, contain non-replaceable components (notably batteries), and only work with custom, constantly changing accessories. In addition, products are constantly updated wholesale, which means everything from more mining of rare earth metals to more emissions from transport.

We should welcome technological advance. But Apple’s approach has a distinctly anti-sustainability tilt — none of these tactics are necessary to create and distribute technological improvements.

While workers in the Global South pay the immediate price for Apple’s profits and marketing successes, we in the Global North pay in other ways. Like so many corporate giants, Apple is a tax-evasion expert.

In fact, Apple pioneered a corporate tax evasion scheme known as the “double Irish.” Commonly used by many Silicon Valley giants, the tactic allows Apple to funnel its revenue from outside the US through a complex network of subsidiaries domiciled in places like Luxemburg, the Netherlands, or tax havens in the Caribbean, and all centered on two Irish companies.

Until recently, Ireland had very lax rules for taxing companies registered there but based elsewhere, and a very low tax rate to boot: 12.5 percent, compared to the US’s 35 percent. (Ireland finally closed the “double Irish” loophole last year, but gave Apple and others who employ the scheme until 2020 to adjust to the new rules.)

Experts estimate that Apple shells out less than 4 percent in taxes on overseas profits routed through Ireland; the company reports an effective tax rate around 25 percent — still much lower than if it had to pay taxes in the US. Unsurprisingly, Apple’s contracts with its suppliers are also held by its network of subsidiaries rather than the US parent. The circumvention has enabled the company to accumulate hundreds of billions of dollars that are then also stashed in tax havens.

The issue goes deeper than whether companies like Apple have lower tax bills than they should. As Evgeny Morozov points out:

The broader lesson here is that a country’s technology policy is directly dependent on its economic policy; one cannot flourish without the active support of the other. Decades of a rather lax attitude on taxation combined with strict adherence to the austerity agenda have eaten up the public resources available for experimenting with different modes of providing services.

Tax evasion directly shapes what’s considered politically possible. Not only is there less money to deliver basic social services, but a vicious cycle of austerity is created. Less money places more pressure on cash-strapped governments to outsource basic services to the same tech companies shirking taxes. With Silicon Valley, it’s disruption all the way down.

The irony is that, as economist Marianna Mazzucato has shown, the major technologies in the iPhone are the progeny of state-sponsored research. The public sector took the risks, and now Apple and others are reaping the profits.

Thinking about Apple and its behavior — not just in recent weeks, but through its institutional history — raises important questions about control over technology. Apple and other corporations monopolize the material rewards of socialized innovation. Why should they get to control the technological commons, even if they begin to pay their “fair share” in taxes? Why shouldn’t the public have a greater say over not just the gains from technological innovation but over how technology is used and produced?

Left to the market, questions of what features go into devices or how data is transmitted and encrypted will ultimately depend on what is profitable rather than what is desirable. The protection of rights, whether to privacy, a clean environment, or work that isn’t dehumanizing, will continue to be trumped by financial responsibilities to shareholders.

If we want greater oversight and control over technology, we shouldn’t hitch our hopes to corporations — even if they occasionally do the right thing. There are no good Apples growing from the tree of a political and economic system driven by profit.