Tim Cook’s Billion Dollar Hypocrisy
Apple CEO Tim Cook has been heralded by the media for repeatedly discussing how much his company respects user privacy, and by extension, how much he detests the flagrant abuse of said privacy by ad-driven companies such as Google and Facebook. He has said it on company earnings calls, he said it during a Vice News interview recently and even more recently he said it during an Axios interview on HBO and covered by ARS Technica.
However, it has become extraordinarily easy to draw a straight line from what Tim Cook says to the hypocrisy of what his company actually does. Namely, Tim Cook wants to be an advocate for user privacy – but not so much that he considers revamping or abandoning Apple’s multi billion-dollar partnership with Google, the provider of the default search engine on all Apple products. Google is, of course, notorious for making money off of user data.
Tim Cook‘s recent weak response to this issue seems to make it clear that while he postures as an advocate for user data, he doesn’t really have any interest on following up on his statements in any tangible fashion. When asked about keeping Google as Apple’s default search engine, Cook said:
I think their search engine is the best. Look at what we’ve done with the controls we’ve built in. We have private Web browsing. We have an intelligent tracker prevention. What we’ve tried to do is come up with ways to help our users through their course of the day. It’s not a perfect thing. I’d be the very first person to say that. But it goes a long way to helping.”
Meanwhile, Google pays Apple to use its search engine as the default on iPhones and other Apple devices. That money goes into a segment of Apple’s revenue that happens to be the company’s only bright spot of late for investors: its services business. While concerns about iPhone saturation now seem to be widespread as Apple no longer reports iPhone unit sales, Apple suppliers furiously slash guidance – and watch their stock tank – the service segment for the company remains the sole bright light for any stockholder to hang onto at this point.
Bloomberg estimates that Apple brings in between of $3 billion and $9 billion from its licensing agreements with Google and a majority of analysts put that number between $3 billion and $4 billion. The services segment as a whole recently hit $10 billion in revenue during the final fiscal quarter of 2018.
At the same time, Cook’s answer about possible Federal privacy regulations has been as two-faced as his stance on Google. While he has said he’s “not a big fan of regulation”, he also has said that companies have to recognize when the free market approach has failed.
“I’m a big believer in the free market. But we have to admit when the free market is not working. And it hasn’t worked here. I think it’s inevitable that there will be some level of regulation. I think Congress and the administration at some point will pass something.”
Yet when it boils down to Google, there really is no way to put a polish on it: Tim Cook is a hypocrite. The suggestion that Google is the only effective search engine is nonsense, and if anything, should open up Google to antitrust litigation. For Cook, however, the bottom line is simple: either practice what you preach and throw Google out or simply come out and say what is already well known – at a time when public perception of Apple’s growth is suddenly in crisis, it simply can’t afford to lose the billions in “growing service revenues” the company is – happily – getting from Google.