David Heinemeier Hansson

March 2, 2021

Apple can brick your computer if you miss a payment to Goldman Sachs on the Apple Card

I talk a lot about the problem with big tech not just being monopoly power, but also conglomerate power. Fingers in a million pies. Here's a sample from my testimony before the Arizona House of Representatives:

Apple is now involved in offering credit cards, producing TV shows, curating news, offering fitness classes, commissioning video games, streaming music, running digital radio stations, making heart-rate monitors, selling audio speakers and headphones, and of course manufacturing and selling computers, phones, watches, tablets, and controlling the operating system for all of the above. Oh, and apparently they're also close to getting into the car-making business - woohoo!

It's funny that this list starts with the fact that Apple is offering branded cards based on Goldman Sachs credit, because the most holy-shit-is-this-real story of big tech conglomerate abuse yet is about exactly this. Dustin Curtis got locked out of updating apps on his Mac, locked out of playing music, locked out of accessing his calendar, and the rest of his iCloud account, because he was late on a single payment on his Apple Card credit card (by accident no less!). Apple basically bricked his computer as a debt-collection tactic. Read the whole story. It is absolutely b-a-n-a-n-a-s.

This wasn't some rogue error, either. This wasn't a malfunctioning algorithm. Here are Apple's own words:

We’ve been unable to collect full payment for your new iPhone. As a result, we will block the device on the order from further access to the Apple iTunes and Mac App stores, and disable all accounts associated with the device purchased on the order.

To resolve this issue, please call 1-877-255-5923 to speak with an Apple Card Specialist at Goldman Sachs. Once the issue has been resolved, reply to this email so we can charge your card for the difference in value.

That is fucked up. FUCKED. UP.

First, to hold your digital life hostage until you pay off a credit card bill is grotesquely disproportionate. Second, Apple is acting as a debt collector on behalf of another company, and telling you that until you sort out your payments with them, you're going to be shut out of your digital life. Yes, it's called the "Apple Card", but as the statement above explicitly details, you have to settle your debts with Goldman Sachs. Because that's who offered you the credit. Not Apple.

In an episode that seems like it happened a thousand years ago, I learned the hard way that the Apple Card isn't actually "designed" by Apple in the sense that they control "how the card works", but merely in the sense of "how it looks". This was when the credit underwriters at Goldman Sachs deemed my wife worthy of but a tenth the credit I was (despite having a higher credit score!). Just like in this case, Apple didn't even want to talk to us about it. They just sent us round in circles with Goldman Sachs. This was their credit, their underwriting, their decision.

So the Apple Card is a credit product run by Goldman Sachs with an Apple app and branding. Barely different from any other branded credit card in the business. Apple didn't design a credit card, they simply used their branding, and their monopoly position with the iPhone, to push a financial product by Goldman Sachs.

And now they're backing up that branding with these absurd collection tactics. What cut of Goldman Sachs revenues from this credit card do you think Apple takes for their trouble? 30%? Also, is this repo tactic a service that Apple might rent out to other credit card firms, if they too are willing to pay Apple for the muscle?

Because it's hard to imagine repo tactics more effective than holding your digital life ransom until you pay. Why bother with old-school tactics like threatening letters or phone calls when you can simply cut someone off from their digital possessions.

What's also key to this story is just how similar the mechanics are to other stories from the hell hole that is the American credit industry. Apple sends collection notices from email addresses that don't work, they can't even get the product right in the notice, nobody knows what's going on when you call about errors, and you're stuck in purgatory – without access to your digital life! – for days and days at the time.

This is utterly insufferable. Apple should absolutely be barred from using their monopoly position in computing services to act as a debt collector for financial firms. It would be outrageous enough if Apple was doing this when your App Store account was overdraft because one of the many scammy apps they allow ran up the bill, but it's beyond words when they're doing this on behalf of Goldman Sachs.

Now imagine that this Apple Car becomes a reality. So you miss a payment to Goldman Sachs, and now your car is going to be bricked by the side of the road? I'd laugh about how ludicrous that sounds, if it wasn't already standard practice in subprime car lending.

We need Glass-Steagall for big tech. If you're operating an essential digital services company, like Apple is with the iPhone, you can't also be the muscle for a loanshark business that charges 22% APR, and kick people off your dominant platform if they miss a payment.