10 Sleaziest Apple Business Practices
Apple has built its success around a sterling reputation for style, innovation, customer service and corporate responsibility. Is it possible that this reputation is beginning to unravel?
1. Hiring Foxconn
Foxconn, the world’s largest electronics manufacturer, is a Taiwan-based company that employs close to one million people in Mainland China. The company gained international scrutiny over their working conditions in 2010 after a string of suicide attempts where 18 workers flung themselves off the top of Foxconn factory buildings in Shenzhen China. These workers had reportedly been subjected to grueling work conditions that included militaristic manufacturing floors and 12-hour (or longer) daily shifts.
Foxconn entered the international spotlight again last year after an Apple investigation found that the firm was also utilizing underage laborers, or what Foxconn called "student interns," in its manufacturing plants.
2. Linking Into the NSA's PRISM Project
Of course, Apple didn’t have much power to resist the U.S. government when the NSA integrated the company into its PRISM program. But after information about the program was leaked and Apple was directly asked about its potential involvement by journalists, the company spokesmen first denied that Apple was involved, and then attempted to downplay the company’s involvement in a press release claiming that the "most common form of request comes from police investigating robberies and other crimes, searching for missing children, trying to locate a patient with Alzheimer’s disease, or hoping to prevent a suicide."
3. Avoiding Taxes
In May of this year, Apple’s reputation took another hit when Senate scrutiny over its tax practices drew attention to the striking reality that the tech juggernaut paid only 2% taxes on its worldwide income. In short, Apple’s vastly intricate strategy to avoid paying its fair share of taxes in both the United States and the European Union relies on a complex network of holding companies and subsidiaries routed through Ireland, a European tax haven. For more info see the Forbes article: "How Does Apple Avoid Paying Taxes?"
4. Colluding to Raise E-Book Prices
On Wednesday, a judge in Manhattan found Apple guilty of working with major publishers to inflate the prices of electronic books in preparation for integrating these ebooks into its multimedia iTunes empire. Apparently, publishers had become irked with Amazon’s dedication to a $9.99 price point for the site’s best selling ebooks, which prompted Apple to court publishers upon the creation of its own iBook market by adopting an ‘agency’ pricing model, which allowed the publishers (rather than Apple Inc.) to set ebook prices. With Apple’s new pricing infrastructure emerging, a variety of publishing companies simultaneously threatened to leave Amazon unless the entrenched ebook distributor allowed prices to rise. According to the Thursday’s ruling, because these publishing companies acted in concert to raise prices as a direct result of Apple’s new pricing infrastructure, Apple Inc. was implicitly involved in collusion to raise prices across the ebook market. In a statement released after the ruling, however, Apple continued to deny any wrongdoing, and many legal observers believe that the company will appeal the case in the near future.
5. Using Blood Minerals in Apple Electronics
Coltan is a mineral that is widely used in the manufacturing of consumer electronics devices because it possesses unique heat-resistant properties and has the ability to hold high levels of electrical charge longer than most other readily accessible materials. While the vast majority of Coltan is mined in Australia, rebel groups in the war-torn Congo have also begun extracting the mineral in order to sustain their military operations. Similar to how blood diamonds can find their way into even the most reputable jewelry retailers’ inventory, Coltan blood minerals sold by rebel forces can be purchased by raw materials suppliers that eventually sell to Apple manufacturing partners like Foxconn.
6. Getting Just a Bit Too Cultish For the Rest Of Us
During the 1984 Super Bowl, Apple aired a commercial directed by Ridley Scott that set the tone for its image over the next few decades. Depicting George Orwell’s dystopian world from Nineteen Eighty-Four, it begins with a scene where lines of workers clad in grey clothes march into a stark and bare auditorium for a televised speech from their tyrant leader. Seconds later, a women in bright colors runs into the auditorium and hurls a hammer at the screen, shattering it in a bold act of defiance to the powers that be. The commercial ends by displaying the text: "On January 24th, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like 1984."
The widely-successful commercial depicted both Microsoft and IBM as tyrant corporations whose products strangled creativity and Apple as rebellious entrepreneur that would usher in a new era of revolutionary technological excitement.
Since a rough patch in the 1990s and Apple’s fabled comeback with the iPod in the 2000s, the company seems to have run with this image as an usurper of stagnant technology. However, just like so many other revolutionary movements, Apple seems to have increasingly adopted the very persona it was once working so fiercely against. From Steve Job’s creepy black turtleneck (which his predecessor Tim Cooke still religiously mimics at product unveilings) to the almost temple-like Apple stores and the army of pretentious geniuses that staff them, Apple culture seems to increasingly resemble the creepy, cult-like images of mindless, grey-clad workers in its 1984 commercial parody, rather than the brave young dissident that emerges to set them free.
7. Employing Some Questionable People At the Apple Store
Speaking of workers, according to a Gizmodo article by Sam Biddle, some pretty strange things have been going on behind closed doors in Apple Stores. Apparently, after writing a story about corruption at one specific Apple Store in Texas, the Gizmodo staff publicly requested information from anybody who might have experienced similar problems while working in other Apple stores across the country. The feedback was rather shocking, including firsthand accounts of employees "destroying merchandise as a game, "stealing tens of thousands of dollars worth of inventory, "digging through" customer data and then copying it for their own use at the genius bar, and even fraud in reporting sales numbers. While every company of Apple’s size has hired at least a few untrustworthy people, the mass of responses that Gizmodo received in its investigation seems to indicate a systematic — rather than abnormal — dysfunction with Apple’s retail staff.
8. Logging Extensive Location Data On Apple Users
Amidst the still-brewing NSA data collection scandal, it should be less of a surprise that, at least since releasing the iPhone 4, Apple has been collecting intricate location information on iPhone users. According to the Guardian, each day, every iPhone repeatedly records its location using geographic coordinates that are paired with a time stamp and stored in a secret file that is copied to the phone owner’s computer whenever the two are synced. Wired also reports that the particular file in which all of this data is stored remains unencrypted and relatively easy for anybody — not just a tech genius — to access.
As a result, this information can relatively easily be obtained by a thief who swipes an iPhone while the owner isn’t looking, a stranger lucky enough to find a lost iPhone on the street, or — perhaps most dangerously — a malicious acquaintance of the phone’s owner who has a brief chance to access it when the owner isn’t paying attention.
Anybody who has bought a Macbook within the past few years can probably remember learning about how environmentally friendly it is from either a savvy Apple store employee or the sleek promotional material included inside the device’s beautifully designed packaging. However, Apple’s track record with the environment has been less stellar than these selling points might have led you to believe.
In Green Peace’s November 2012 Guide to Greener Electronics, Apple ranked below many of its competitors ... including Dell, Samsung, and HP in its friendliness to the environment. Greenpeace has also criticized Apple (along with Facebook and Twitter) for using "dirty data centers," which rely on coal power to function. Furthermore, in the early 2000s, Apple was accused of using hazardous materials in its products, many of which have since been removed. Accordingly, despite an environmentally-friendly marketing campaign, research shows that Apple is not substantially friendlier towards the environment than technology firms of similar size and status.
10. Forcing Apple Maps On iPhone Users
Last year, Apple attempted to take over the mapping function on its iPhones by replacing Google Maps with its own Apple Maps in their newest iOS 6 operating system. The effort almost instantly bombed as users quickly became frustrated by faulty directions, confusing or deficient 3D renditions of otherwise-familiar cities, and a host of other issues (six of the worst Apple Maps fails). For most of us, the fact that Apple would suddenly try to force its iPhone users into a less-worthy mapping system was just a massive annoyance.
However, the troubled mapping service did create some life-threatening situations in Australia when it repeatedly led unsuspecting motorists into the middle of a sweltering national park that lacked local access to gas, food, and water.