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How Apple Rules the World
By Austin Carr and Max Chafkin | Bloomberg Businessweek | September 8, 2024
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“You’ll see why 1984 won’t be like 1984.” was the tagline for Apple’s first Macintosh advertisemen, which later become one of the most famous commercials of all time. Its director, Ridley Scott, reframed computers from boring business tools into statements of identity. Co-founder Steve Jobs and other early Apple executives saw themselves as rebels and artists. Four decades later, the disruptive power of personal computing has gone from revelation to cliché, and Apple is widely understood to have helped democratize information by defining the PC and its successor, the smartphone.
One side effect of this influence, however, is that Apple is no longer the plucky rebel taking on the evil empire. These days, critics argue, Apple is the one using technology to entrench its power, and the face of Chief Executive Officer Tim Cook is the one looming from the telescreen.
Through its App Store, Apple tightly controls enormous platforms for digital communication, mobile finance, social networks, music, movies, transportation, news, sports and pretty much anything else that happens in 1s and 0s, which is to say, everything. This software ecosystem, Apple’s own version of the garden of pure ideology, is accessible only to those who comply with the company’s rigorous store policies and related “Human Interface Guidelines,” its content standards, and its tolls. When money crosses through this system, as it does constantly, Apple gets as much as 30%. Every time you wave your iPhone or Apple Watch at a credit reader in the real world, Apple gets a small cut of those transactions, too. For companies of a certain size, there’s no real way to get out of paying what’s become known as the “Apple tax.”
Investors, as a general rule, have no problem with this kind of dominance, as Apple’s soaring stock price over the past decade makes clear. Regulators, on the other hand, have some questions. In March the US Department of Justice filed a sweeping antitrust complaint accusing Apple of anticompetitive practices that have essentially locked consumers and partners into its ecosystem, extracting ever larger sums from both groups.
The US proceeding gained greater urgency in August, when a federal judge ruled against Google in a separate case that hinged, in part, on its default search agreement with Apple. (Google has said it will appeal.) Taken together, the two cases raise questions about how we look at some of the world’s most successful tech companies. How did businesses that were once widely seen as counterweights to corporate dominance find themselves in positions of otherworldly power and influence? And how did Apple, which has long considered itself an advocate for free expression, get accused of the same Orwellian tactics it once mocked? Does Apple’s power derive from the strength of its beloved products or from the way the company designed those products to lock out competitors?
The answers have implications for Apple shareholders. The company is facing disputes with a growing list of partners, including banks, filmmakers, car manufacturers, app developers and customers who’ve begun to doubt that Apple is still the creative force they fell in love with years or decades ago. The implications for the rest of us non-shareholders are just as significant. More than ever, and very much by design, we’re all living in Apple’s world.
3 key takeaways from the article
- Co-founder Steve Jobs and other early Apple executives saw themselves as rebels and artists. Four decades later, the disruptive power Apple accumulated made it no longer the plucky rebel taking on the evil empire. These days, critics argue, Apple is the one using technology to entrench its power.
- Through its App Store, Apple tightly controls enormous platforms for digital communication, mobile finance, social networks, music, movies, transportation, news, sports and pretty much anything else that happens in 1s and 0s, which is to say, everything. This software ecosystem, Apple’s own version of the garden of pure ideology, is accessible only to those who comply with the company’s rigorous store policies and related “Human Interface Guidelines,” its content standards, and its tolls. When money crosses through this system, as it does constantly, Apple gets as much as 30%.
- In March the US Department of Justice filed a sweeping antitrust complaint accusing Apple of anticompetitive practices that have essentially locked consumers and partners into its ecosystem, extracting ever larger sums from both groups. The company is facing disputes with a growing list of partners, including banks, filmmakers, car manufacturers, app developers and customers who’ve begun to doubt that Apple is still the creative force they fell in love with years or decades ago.
(Copyright lies with the publisher)
Topics: Apple, Anti-trust, Monopoly, Developers, Games