“An Open Letter to Tim Cook on Why Apple Should Compromise With Antitrust Regulators” posted in Time Magazine:
Apple is no longer the plucky upstart it was when Steve Jobs returned two decades ago. The company has a market value bigger than the GDP of all but eight countries in the world. In the trailing four quarters, your firm enjoyed a tax rate of about 14%, which has attracted the attention of Senator Warren, among others, who believe it is too low. Apple has huge economic power, which it uses for competitive advantage. Some of the victims of that economic power are fighting back, not unreasonably, and Apple’s brand with policy makers has taken a beating. The company’s reaction? One of surprise and resentment, which is not working. The time has come to change Apple’s approach.
Every major tech company deploys AI and surveillance in ways that are inscrutable and often harmful. Tech giants are so big that their decisions transform societies, too often for the worse. Apple is nowhere near the worst offender, but because it accounts for nearly half of the North American smartphone market, the scale of its issues is too big to ignore. Governments around the world feel political pressure to intervene to address Apple’s anticompetitive behavior.
Regulators in the U.S. and Europe are adapting antitrust laws created for an industrial economy. It is an imperfect situation, a blunt instrument where surgical precision would be better, but the alternative is to cede even more power to unelected monopolists. The big targets are Amazon, Google and Facebook, but regulating those companies will be complex and time consuming, as some of the worst harms are not covered by current statutes.
Regulators may seek easier targets to get an early win and Apple is positioned to be that target. Its anticompetitive behavior has drawn public attention out of proportion with the damage it causes.
From a regulatory perspective, fixing Apple is relatively simple. Doing so will strengthen regulators’ hand for the bigger fight against internet platforms by sending the message that collateral damage is an acceptable cost in pursuit of reform…
At this point, antitrust intervention in Europe, the U.S., or both is almost certain. By refusing to engage with the legitimate concerns of policymakers, Apple is risking its core security and privacy brand to protect business practices that are not essential to its future…
Please stop viewing antitrust as a penalty for success. Antitrust intervention is the prize for winning in business by an overwhelming margin. It only happens when the status quo has become politically unsustainable. Think of it as the gold medal, the signal to begin a new game. Congratulations, Apple won!
My take: I suspect Cook’s long-term plan is not that different from McNamee’s. No reason, however, for Apple to play its cards before it has to.