The Observer view on the power of Apple and other tech giants

 In Articles, News

An article published in The Guardian on September 10, 2017

by the Observer Editorial Team


The big players of the internet should be made to sign up to a charter on ethical behaviour

On Tuesday, there is a cultural, technological and economic event of global significance. Apple will launch its new range of iPhones, wearables, services and its improved Apple TV.

If they are successful, Apple will become the first company ever to be valued at $1tn on the New York Stock Exchange. The world will be plunged ever deeper into the digital age.

Apple has emerged in a few years alongside Google, Facebook and Amazon as one of the corporate titans of our times. In their wake are Airbnb, eBay, Instagram, LinkedIn, Snapchat, Spotify, Twitter, Uber and YouTube, all of which have transformed our lives. Nobody would gainsay the creativity and transformational capacity of these companies. They are a tribute to the creative power of capitalism.

Nobody argues the services they provide would have happened faster or more efficiently in a world of public ownership and state planning. And yet. These are new and powerful sources of private power. These companies know ever more about us: our personal data is integral to their business model. They take the concept of monopoly to a new level; each digital platform, once dominant, creates an embedded advantage of being the only platform worth using, so making their market position unchallengeable.

How ethically they behave towards customers, staff, competitors and public authority is thus of existential importance. Yet it is already evident that existing structures of corporate governance, competition law and of intergovernmental collaboration are not up to the task of insisting that crucial ethical norms are adhered to.

Apple is one of the better in class. It is a manufacturer and service provider and less able to create an impregnable market position than, say, Facebook or Google. If Tuesday’s product launch is poorly received, there are plenty of rivals ready to step in and provide better mobile phones or wearables. It lives off its creativity rather than a monopolistic position. It is also more vigilant about respecting personal privacy.

But even Apple cannot escape concerns about its possession of so much private power. It stands on the threshold of being the world’s first trillion-dollar company. It pays trivial amounts of tax in relation to its sales. It has played hardball with the EU over its claims that it owes billions of unpaid tax. It possesses an enormous amount of knowledge about our data, with only thin and weak processes of accountability, along with systems to address grievances and complaint.

It is becoming ever clearer that public policy needs to be tougher on a number of fronts and that individual European countries and their citizens will only escape being exploited if they act together. IT companies operating anywhere in Europe should be signatories to an EU-wide data charter, as proposed, for instance, by the Big Innovation Centre, setting out their acknowledgement that data is owned by the individuals who generate it: the principle must be that “my data is my own”. There must certainly be derogations for commercial use, but only with the express agreement of its owners, along with agreed processes for redress of grievances and speedy payment of fines.

Competition policy must operate internationally. Similarly, IT companies must comply with OECD initiatives on tax avoidance or face the risk of paying a flat rate levy on sales. And all must establish ethical guidelines and ensure that there is compliance. Britain will want to work closely with the EU, even after Brexit.

Apple and its fellow IT disrupters are changing the world. That does not mean they can change the ethics by which we live – that requires European countries to work together.

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