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FILE PHOTO: iPhone 15 and iPhone 15 Plus are displayed during the 'Wonderlust' event at the company's headquarters in Cupertino, California, U.S. September 12, 2023.
US sues Apple over alleged smartphone monopoly
In an antitrust lawsuit filed Thursday, the Department of Justice alleged Apple’s dominance of the smartphone market amounts to a monopoly. The DOJ says Apple resorts to “delaying, degrading, or outright blocking technologies that would increase competition in the smartphone markets” to keep users reliant on its iPhone.
The iPhone’s success is the stuff of business school legend, capturing some 70% of the US smartphone market despite steep prices. In short, the DoJ’s contention is that unfair practices helped Apple get there.
Apple is denying the claims and says it will fight the lawsuit in court, but this isn’t the first time the company has faced similar legal challenges. This is its third antitrust suit in the US since 2009, and It was fined nearly $2 billion by the European Union last month for breaking fair competition laws.
Expect a tough legal fight, but if the government proves its case, there could be major changes coming to the iPhone. The complaint says Apple could shape up by ensuring full compatibility with phones, smartwatches, and digital wallets from other manufacturers, relinquishing some control over the apps that can run on iPhones, and imposing less onerous terms on users and developers.Fingerprint and loupe.
Hard Numbers: Unique prints, Job impacts, China chip sales, Microsoft beats Apple, Baidu shares fall
60,000: Researchers at Columbia University trained an artificial intelligence tool on 60,000 human fingerprints and made a strange discovery: Contrary to popular belief, our fingerprints may not be entirely unique. If confirmed, this discovery could change a bedrock assumption of forensic science.
40: Artificial intelligence will affect 40% of all jobs, according to a new analysis by the International Monetary Fund. In advanced economies, a whopping 60% of jobs could be affected. In about half of the affected jobs, AI could actually help workers, the IMF said, but the net effect on people around the world won’t be pretty.
15.4: The value of China’s chip imports fell 15.4% to $349.4 billion in 2023 after the US intensified export controls on the semiconductor industry. It’s the second year in a row that it has dropped and the worst decline since data tracking began in 2004.
2.89 trillion: On Friday, Microsoft surpassed Apple as the world’s most valuable company. The PC giant, which has leaned heavily into AI — including a massive investment in OpenAI — finished the trading day at $2.89 trillion, beating Apple’s $2.87 trillion. Apple has held the most-valuable-company crown since 2011 when it dethroned Exxon Mobil.12: Shares of the Chinese tech company Baidu fell 12% after a report revealed its Ernie AI platform is powering Chinese military research. Baidu, which trades on the Nasdaq and the Hong Kong Stock Exchange, had its worst-performing day in a year even though it denied the veracity of the report. Ernie added 100 million users since it launched in August, but its use by the Chinese government could subdue investor interest on Wall Street.
Lightning and USB-C cables are seen with European Union flag reflected on Apple iPhone in this illustration photo taken in Krakow, Poland on September 25, 2021.
How the EU designed the new iPhone
Earlier this week, Apple unveiled the iPhone 15. The camera is better. The design is sleeker. The glass is less breakable. It comes in pink.
But the detail that caught our eye was down at the bottom: the charging port has changed from a lightning port to a USB-C port (that’s the one that looks, to us at least, like an M-dash).
The story of why Apple made that change takes us not to Cupertino, but to Brussels. Last October, the EU passed a law that required most kinds of portable electronics sold in Europe to have the same charging port – the USB-C.
The move will reduce the Babel of incompatible chargers to one single standard. Smartphones and tablets have to make the change by 2024, other devices by 2026.
Tech companies grumbled about it – they had refused to agree on a standard voluntarily – but ultimately they went along with it. Why?
Because they didn’t want to get shut out of a market of 450 million consumers (the largest among advanced economies) and it made little sense to make different phones for different regions.
The USB-C story is a nice example of how the EU, lacking tech juggernauts of its own, is nevertheless trying to shape the global technology industry as a “consumer first” regulator.
While the US and China duke it out for supremacy in both hardware and software, Europe has developed some of the strictest laws in the world governing online privacy, content moderation, and competition.
Just last week the EU unveiled another set of regulations targeting the six biggest tech companies with new competition rules.
This is the same approach that Europe is taking when it comes to AI — seeking to jump out in front with smart regulation rather than the most advanced AI modules as such.
For it to continue to work, Brussels has to bet that the allure of its market is greater than the bother of adapting to strict rules. So far it’s working.
Big Tech's big challenge to the global order
Ian Bremmer's Quick Take:
Read Ian Bremmer's wide-ranging essay in Foreign Affairs that puts in perspective both the challenge, and the opportunity, that comes from the unprecedented power of Big Tech.
Hi, everybody. Ian Bremmer here on the road, something we haven't done very much recently, but will increasingly as we try to move through COVID. And I want to talk to you about a new article that I just put out in Foreign Affairs that I'm calling "The Technopolar Moment." Not unipolar, not bipolar, not multipolar, technopolar. What the hell does technopolar mean?
It means that increasingly big technology companies are themselves geopolitical actors. So to understand the future of the world, you can't just look at the United States, Europe and China. You need to look at the big tech companies, too.
Now I'm saying that. I never felt that way about big oil or about the banks or any other major multinationals. And the reason for that is because they all exist in real physical space. And as a consequence, they are regulated in physical space or sometimes not effectively regulated. But nonetheless it is inside sovereign government entities, and their territories that they exist.
Technology companies actually have sovereignty over their digital space. They not only determine what the rules are going to be. But they actually create it from the ground up. They're the architects. They drive the algorithms. They own the data. They decide what to do with it. I mean, everything about that space is the mandate of the tech companies themselves. And that is the kind of power in digital space that increasingly feels like a parallel world to physical space where governments are in charge.
And so we see a couple of interesting things that come from this. First of all, I first became aware of this after January 6th. By far the biggest event that had transpired in terms of domestic political stability, instability of my lifetime by a domestic actor. And the response did not come from Congress, did not come from the executive, did not come from the judiciary. They all failed to act.
The responses came from the tech companies deciding to de-platform Parler, Amazon and Apple, de-platforming the sitting President of the United States by Facebook and by Twitter. And to the extent that people were eventually arrested and then tried, that came because of information they had posted on social media platforms. Now those companies, I mean, no one's voted for their rules. They decide in a kind of capricious way, what they do or don't want to do to respond.
I'm not saying that they didn't take responsible decisions. That's an entirely different point. But the fact was, they exerted sovereignty. It wasn't just true about January 6th. Was true, the most important attacks on the United States and on its allies, last year was the SolarWinds attack. And the US government and the Europeans weren't even aware of the attacks when they occurred. It was Microsoft that found out about them. And they were the ones that, with other private sector companies, figured out how to attack back.
In other words, whether you're talking about the economy or politics or national security, as all of those areas increasingly moved to a mixture of the virtual world and physical space, and as tech companies dominate the virtual space, they increasingly exert sovereignty. And so if we want to understand what the world is going to look like in 10 to 20 years and the balance of global power, we need to understand what drives these tech companies. What kind of actors are they? What do they want? What are they orienting towards? And then see which of those models are likely to play out what the balance of power looks like, including them as geopolitical actors.
Now, two other things I want to say aside from "read the piece "so you can see what I have to say about all this. The first is, to the extent that we need to think about how these firms operate. Well with governments, we think about whether or not they're democracies or authoritarian regimes. And of course, no one is the perfect democracy. No one's really a perfect authoritarian regime. But you exist on a spectrum. Some countries are vastly more authoritarian, North Korea on one end, China and Russia towards that end. Some countries are much more democratic, Germany, Canada on one side, the United States towards that side, but slipping down, countries like Hungary and Turkey, not so much.
Okay. In the technology space, there is no tech typology. We don't have one. All we think is, "Well, they want to make money." But actually, if you think about the relationship of these companies to the state, they do have very different models. In fact, I'd argue they have three. One is the globalist model, kind of an outgrowth of their historic libertarianism, which is don't get involved. Don't regulate me. We want to have strong lobbying that allows us to capture regulations of the public sector. We want to be dominant in the space, be able to write the rules that the government will use to regulate us and achieve, maintain monopoly status in spaces that we exist in. I would argue that Apple is much closer to that kind of a model, Tencent, for example, in China.
And there's also national champions. And national champions are the technology equivalents of Lockheed in the 20th century, but for the 21st century. And these are companies that actually want to align with governments, think of the governments as very important partners. And they're not trying to invest as much in a global world, but instead understand there's going to be a much more fragmented world. I would argue that Microsoft is more in that direction, Amazon to a degree, Google a little bit. And they're balancing more between the two. And in the case of China, a company like Huawei would certainly be in that environment.
And then finally you have techno utopians, people that believe driving their corporations, that the government is literally going to go away. They're not going to be relevant in their space. I think Vitalik Buterin from Ethereum would definitely be in that space where he thinks that the future of currency will be crypto and not sovereign currencies, not fiat currencies anymore. So the government just won't matter in the digital space. It will be crypto. And some of what Elon Musk is trying to do with space is in that orbit. Some of what Mark Zuckerberg talks about in the metaverse would look like that. China used to have someone like that in terms of Jack Ma, but they don't anymore because they certainly don't want that model to exist in China.
The big remaining question then is where do we go from here? Who's going to win? And it's too early to say. But it's really interesting to play out three quick thoughts. One to the extent the globalists win, which means that the governments don't continue to do a lousy job of regulating the space. They don't align with the corporates. The corporates would rather continue to capture the regulatory space, that implies, we don't have a technology cold war between the US and China. Global models for technology continue to work more effectively over time. And it means Europe is actually much more important because they probably to the extent that anyone is developing effective rules of the road. They're going to be better at that, more thoughtful at that than the Americans or Chinese would be.
If the national champion model wins, then it is the Chinese continue to focus on squeezing the private sector. Everyone has to align with the government. The Americans increasingly do that too. It becomes a technology cold war. And there's very little space for Europe. In fact, everybody else needs to align to one or the other.
And then finally, you have the techno utopians. And it's hard for this to play out what happens to the world if the techno utopians win. Because in part it depends on if they win at what? Do they win at currency? In which case, central banks start mattering a lot less. And the US looks like it's in decline. Why? Because you no longer have the global reserve currency as the US dollar.
What happens if the metaverse ends up being a space that's completely ungoverned by the United States and other governments? Well, it means the governments will be expected to do a lot less. Federal power will erode. And the social contract will be driven either by those corporations in those spaces or not at all, a lot more inequality in that kind of an environment. Anyway, a lot to think about here, a piece that I've been considering pieces of for a long time now. I hope you find it worthwhile and we'll be talking more soon. Be good.
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Apple vs Facebook, a clash of the tech titans; social media algorithms scrutiny
Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:
How big of a blow is Apple's new privacy feature to companies like Facebook, who depend on tracking users?
The long-awaited update, including enhanced privacy features, actually empowers those users to decide not to be tracked. So that's great news for people who are sick of how the data trail they leave behind on the web is used. But it has to be said, that simple feature settings changed by Apple cannot solve the problem of misuse of data and microtargeting alone. Still, Apple's move was met with predictable outrage and anti-trust accusations from ad giant Facebook. I would anticipate more standard setting by companies in the absence of a federal data protection law in the United States. That's just to mention one vacuum that big tech thrives on.
Why are social media algorithms being scrutinized?
Now frankly, I wish they would be much more systematically scrutinized by academics or overseen by independent regulators. And that would require more access to data and information as a precondition for both evidence-based lawmaking and the public's ability to learn. Grillings of a select group of tech CEOs before Congress cannot be a substitute for laws and the rule of law to actually guide tech governance.
How to change a social media business model that profits from division
The United States has never been more divided, and it's safe to say that social media's role in our national discourse is a big part of the problem. But renowned tech journalist Kara Swisher doesn't see any easy fix. "I don't know how you fix the architecture of a building that is just purposely dangerous for everybody." Swisher joins Ian Bremmer to talk about how some of the richest companies on Earth, whose business models benefit from discord and division, can be compelled to see their better angels. Their conversation was part of the latest episode of GZERO World.
Kara Swisher on Big Tech’s big problem
Renowned tech journalist Kara Swisher has no doubt that social media companies bear responsibility for the January 6th pro-Trump riots at the Capitol and will likely be complicit in the civil unrest that may continue well into Biden's presidency. It's no surprise, she argues, that the online rage that platforms like Facebook and Twitter intentionally foment translated into real-life violence. But if Silicon Valley's current role in our national discourse is untenable, how can the US government rein it in? That, it turns out, is a bit more complicated. Swisher joins Ian Bremmer on GZERO World.
Phonemaker Apple says no new business for supplier Wistron after India plant violence
Wistron failed to implement proper working hour management processes, Apple said.