David Heinemeier Hansson

April 21, 2021

Apple is an accomplice to fraud

Today's blockbuster story in The Verge about Apple's gross negligence in managing the App Store is wild. Wilder than wild, it's bananas. Absolutely bonkers. Go read it right now, then come back.

Didn't I tell you? B-a-n-a-n-a-s.

How on earth does a two-trillion-dollar company like Apple allow themselves to be exposed like this? That's literally a $64-billion dollar question! Apple has so much at stake here. Their integrity and trust with consumers, their best shield against regulation, and their defense in lawsuits like Epic v Apple. How. Does. This. Happen?!

Apple has had years of warnings to clean things up. To at least address the most obvious, most scammy apps that were pointed out to them. But they chose to effectively do nothing. All the money went into PR, lawyers, and lobbyists. Oh, and obscene returns to investors, like the $22 billion dispersed just in Q4 2020.

Now the problem is that Apple is defacto an accomplice to fraud. They knowingly aided and abetted scams that preyed on consumers and cost them millions. They were alerted and warned, specifically and repeatedly, about these scams, and not only did they do nothing, they continued to profit from the scams! Every scam that ran through the in-app payment system paid Apple a 30% cut of the take.

This has to be pretty close to the same level of legal exposure a bank would have by knowingly aiding and abetting money laundering? As in not just a theoretical risk, but a criminal risk. You know, the type with agents and indictments and handcuffs.

But that's obviously for the police, regulators, and other forms of enforcements to figure out. So let's put that aside for a second.

Because I want to extend a moment of pity to Kyle Andeer, Apple's Chief Compliance Officer. That's the poor sap who Tim Cook handed the awful task of repeating the now-dead talking points on safety'n'security in front of the Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust and Consumer Rights today. TODAY!

You just know that Mr Andeer has already prepared his entire spiel, so pivoting now to a whole new set of novel arguments for why the highway robberies must continue is going to be difficult. Yet surely both Senator Klobuchar and Lee, who Apple already pissed off by first trying to snub the committee, will have been briefed on The Verge's absolutely devasting story. Yikes.

This whole debacle is a great illustration of the old Bill Gates quote:

Success is a lousy teacher. It seduces smart people into thinking they can't lose.

Apple has been winning so much for so long that they've deluded themselves into thinking they're invincible. That no amount of gross negligence will ever have material consequences. That they don't even have to try!

As I said yesterday, Apple has been putting on a security theater with the App Store, but have hired the worst actors, let the set fall apart, and accepted a director that is nowhere to be found. It's no longer a tragedy, it's a farce. Time to drop the curtain.