Apple’s ecosystem economy is the size of a large country

Companies rule the world

Last week, there was a lot of hoopla around Facebook and Google running market research apps on Apple’s iPhones. These apps were sideloaded onto the iPhone using enterprise certificates. Sideloaded apps using these certificates have more privileges on the iPhone than regular apps and, for instance, can be installed outside of the App Store.

Apple was unhappy and yanked Google’s and Facebook’s enterprise certificates which not only made these marketing research apps stop working, but broke every enterprise app deployed by Google and Facebook. This includes deploying internal alpha and beta versions of their major consumer apps.

Apple was correct in rescinding the certificate. Not only did Google and Facebook violated the terms and conditions of these enterprise certificates, but these certificates were living on the phones of participants of these marketing research programs. The safety of an enterprise certificate is a shared responsibility between the enterprise and Apple. But Apple cannot control the distribution of that certificate and the only option they had was to rescind it.

To give a black-and-white example, a malicious actor within Google and Facebook could deploy a rogue app and trick participants who are not employees of these companies to install that rogue app.

The issue though is how Apple handled it. They could just rescind the original certificate and issue a new one immediately. There was no urgent reason for them to rescind immediately and effectively break many operational processes at these companies.

The only thing what it made clear is that Apple is an untrustworthy partner to Google and Facebook.

It also made it abundantly clear that these large companies have a lot of power. As private entities, they are not under any form of public scrutiny with regard towards their actions other than anything related to their public stock. That is just a financial disclosure.

We have come to a world where companies in some ways are more powerful than governments. Amazon has been fighting with Apple and Google on the listing of their products. Apple has been making life difficult for Amazon by making it impossible to sell their video content through their Prime video app because of the 30% rent extraction on Apple’s App Store sales. Spotify cannot deploy their music app on Apple TV. Google does not want Youtube to be natively supported on Alexa devices. Amazon applies seemingly arbitrary rules towards sellers on their platform with regard to fake product reviews left by competitors.

And this goes beyond the big tech companies. Car companies use DMCA law in the US to prevent low-cost repair shops to exist and force consumers to use “approved” repair shops who pay a premium on spare parts supplied directly from the manufacturer.

You buy something, but you don’t really own it. This has been going on for a decade now. It was PayPal who was the first tech company I know who used these tactics. They routinely disable seller’s accounts in case of problems. This left funds sitting at PayPal beyond the reach of the seller. They use those tactics, for instance, to force the seller to settle a case with a consumer. The problem is that this kind of arbitration happens outside the public eye and without public scrutiny.

The crux of the problem is that as these companies become bigger and more powerful, they suck in economic activity around their ecosystem. Apple controls an economy probably the size of a large country. Just think about that it. Tim Cook is CEO of a company who has the economic power to affect peoples and companies life similar to a government, but much of this happens in the private sphere outside the control of the public. Tim Cook is not democratically chosen nor are any of his decisions public while he controls an economy the size of a large country. And that’s just Apple, but there is also Google, Amazon, and Facebook.

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