Apple and Ireland begin appealing €14.3bn tax bill

Lawyers representing Apple and the Irish Government has begun their arguments in the EU’s lower General Court in an attempt to protect the suspect corporate tax environment.

In 2016, the European Commission ordered the Irish Government to collect back-taxes off Apple to the tune of €14.3 billion, including interest. Apple does not want to pay tax. Ireland does not want to collect it. Europe wants a level playing field. The lawyers are looking forward to nuance to bolster their bank accounts.

During the opening arguments, Apple’s lawyers suggested the European Commission decision “defies reality and common sense,” according to Reuters. Both the iPhone manufacturer and the Irish Government will argue against the decision to tax environment contravenes state aid rules.

Let’s be clear. Ireland is a tax haven. It is facilitating corporate tax avoidance. It is helping corporates collect greater profits without rewarding the societies they strain. Irish Government officials should be embarrassed they are helping technology giants abuse its European partners, the very same European partners which bailed it out of financial doomsday a decade ago.

This is a selfish position, and just at the time when the country is looking to Europe to protect it as Brexit looms large on the horizon.

Some might argue the Irish Government is entitled to charge whatever tax it wants. However, a modern society works because the general public and corporations pay taxes. It pays for roads, schools, hospitals, police officers and postal workers. There are technology giants out there who are asking consumers to strain their wallets further each year and care less about their right to privacy, but they are not willing to contribute to the societies which are fuelling the monstrous profits reported every three months.

With international borders being broken down, much to the distaste of some, irregular taxation policies can be taken advantage of. This is what is happening here. It beggars belief that Ireland can argue the benefits of the single economy, and still maintain this position, weakening the position of partners, depriving them of much needed taxes.

This is not the position the European Commission has taken, but it is the one each of Ireland’s partners in Europe should. Why should Ireland be able to collect all the benefits of Apple’s assaults on the European digital economy when it is citizens of every other nation which is fuelling the iLeader’s growth?

For some, it might sound bizarre that the Irish Government doesn’t want to collect €14.3 billion off Apple, but there are two reasons for this.

Firstly, if the Irish lawyers were not to fight back against the enforced tax run, it is effectively conceded to the assertion that it is a corporate tax haven. The last thing the Irish Government wants to do is admit that it is helping the already richly rewarded residents of Silicon Valley rip-off neighbouring governments further with creative tax strategies.

Secondly, Ireland needs to ensure it is viewed as a friendly corporate-tax environment moving forward if it is to continue to attract corporations to its borders. Ireland doesn’t necessarily have the best talent, it doesn’t have the largest economy and it doesn’t have a local supply chain for manufacturing. It needs a plug to interest the likes of Apple, Facebook, IBM, Intel, Twitter, Pinterest, PayPal and Amazon to house their European HQ in the country.

The value of the technology industry to both the Irish Government and society should not be undervalued. The Irish economy entered severe recession in 2008, and then an economic depression in 2009. The country was in tatters, though it was saved by the technology industry.

Over the last decade, technology giants thrived in the tax haven, creating new jobs directly and indirectly, and continues to be one of the biggest drivers today. Silicon Docks is as important to Dublin as Silicon Valley is to California.

That said, the European Commission does not agree this dynamic should be allowed to continue.

Should the Irish Government continue this favourable tax regime for certain companies, a competitive advantage is offered. The Commission, ably led by Margrethe Vestager, has been tackling anti-competitive business practises for years. If such a monstrous company like Apple is given a competitive advantage, state aid to run riot, start-ups will always be on the back-foot. Competition will likely never emerge, and the consumer will be in a precarious position.

Over the next couple of days, lawyers representing Apple and the Irish Government will argue against the opinion of the European Commission, attempting to overturn an order to collect back-taxes and create a more reasonable tax environment. It will argue that it is perfectly reasonable for it to help Apple bleed the consumer dry and then hide profits from governments who are asking for a fair contribution back to society to pay nurses.

Ireland should be embarrassed.

Apple and Disney belatedly sever corporate ties

Disney CEO Bob Iger has been on the Apple board for eight years but, with the two companies now competing directly in the SVOD market, he has resigned.

Last week Apple officially launched its Apple TV+ subscription video on demand service last week, thus placing it in direct competition with Disney, which is also set to get into the SVOD game with, you guessed it, Disney+. For some reason the two companies left it until the very last minute for Iger to clear off, despite the two competing service having been in development for months.

“On September 10, 2019, Bob Iger resigned from the Board of Directors of Apple Inc,” said the abrupt, unsentimental Apple SEC filing. The Hollywood Reporter got a bit more comment on the matter, with Iger saying how great Apple is and Apple returning the compliment, which is nice. Whether relations will remain so cordial when they’re trying to steal SVOD market share from each other remains to be seen. For some reason Iger is still isted as a board member on the Apple site.

While Iger has been on the Apple board, links between the two companies go a lot further back than that. Apple founder Steve jobs was also the founder of Pixar Animation and thus become one of the largest Disney shareholder when it bought Pixar in 2006. Jobs also joined the Disney board at that time and stayed until his death in 2011.

As companies Apple and Disney have a lot in common. They both position themselves as premium consumer brands and invest heavily in their brand image. They also have a reputation for wanting to control everything around their product offering and image, so it’s not at all surprising that they would want to have their own SVOD services offering only their own stuff rather than rely on third parties for distribution or content.

One other big thing they have in common is a desire to be viewed as wholesome, family companies, which creates the possibility that they will end up producing fairly similar content. Right now Disney is mainly about feature-length movies while Apple seems to be focusing more in TV-style stuff. But that distinction could easily change over the years and, if it does, these two American icons will be fighting for the same wholesome dollar.

US lawmakers want to look at private emails from tech execs

Scrutiny of the US tech giants has been taken up another level after members of the US House Judiciary Committee have demanded they expose their internal workings.

The move has been widely reported in the US, including by the Washington Post. It seems there is already a congressional antitrust investigation underway into Amazon, Apple, Facebook and Google, which is presumably related to the actions taken against Google and Facebook earlier this week. They want to know whether the companies have abused their dominant positions to corrupt markets for digital products and services in their favour.

One of the fun things about getting legislators and lawyers involved in scrutinizing the activities of companies is that they have the power to demand access to a bunch of information that would normally be kept locked in a dark cellar, to which only the CEO has a key. The stuff this committee would like financial data about includes their products and services, and private discussions about potential merger targets, we’re told.

Having said that the letters sent apparently don’t have any legal weight behind them right now, so the companies could theoretically refuse. This is a dangerous game to play, however, as they would have to refuse in a way that didn’t imply they had something to hide. Perhaps they could just chuck over some light-hearted Friday afternoon email banter while whistling nonchalantly.

What seems unavoidable is that the state machinery in the US and elsewhere has the tech giants in its sights and seems to have decided the lot of them have far too much power by half. Since they are undeniably dominant their execs and legal departments would be well advised to buckle in for the long haul. They could also do worse than speak to grizzled campaigners from companies like Microsoft and Intel to get some top tips.

Apple finally gets the memo on sacrificing margin for market share

By making its entry-level new phone cheaper than last year’s one and only charging a fiver for its new video service, Apple is further compromising its premium image.

The roman numerals experiment is over, which means no more X in the iPhone nomenclature. Now we have the entry-level iPhone 11, the iPhone 11 Pro that has additional wide-angle and telephoto cameras on top of the regular one, and the iPhone 11 Pro Max, which is the same as the Pro but bigger. The most significant change, however, is the pricing of the 11, which is $50 less than the XR was last year at $699, which is also $100 less than the Google Pixel 3. The price of the other two phone remains the same.

On top of that the pricing of the new Apple TV+ SVOD service, which will launch on 1 November, has been announced at $5 per month, a lot cheaper than the standard Netflix package that costs $13 per month. The latter is a sensible acknowledgement that Apple TV+, which will only have original content, won’t have a fraction of the amount of stuff you can get from Netflix, while the phone pricing must surely be in response to increasing competitive pressure from the sub-premium market.

“With the tight integration between hardware, software and services, the advancements in iPhone 11 bring an unparalleled user experience at an affordable price to even more customers,” said Apple marketing boss Phil Schiller. “Apple TV+ is an unprecedented global video service with an all-original slate,” said Jamie Erlicht, Apple’s head of Worldwide Video. “We look forward to giving audiences everywhere the opportunity to enjoy these compelling stories within a rich, personalised experience on all the screens they love.”

The pricing angle has caught the attention of the commentariat. Bloomberg notes that not only is the iPhone 11 price cut significant, but the XR has had $150 knocked off it. “We view this as an admission that Apple stretched too far with the price points at last year’s launch,” Chris Caso, an Analyst at Raymond James & Associates, is quoted as saying in the Bloomberg piece.

On top of the aggressive price point for Apple TV+, anyone who buys a new iPhone, iPad, Apple TV, Mac or iPod gets a year’s subscription for free, which is not just a great way for Apple to seed TV+ into its existing customer base, but provide a strong incentive for new sales too, so this is a smart move. Having said that it’s further evidence of Apple’s sudden willingness to sacrifice margin at the altar of market share.

We spoke to Ed Barton of analyst firm Ovum to get his take on the TV+ move. “The price point and a free year of access for new Apple device buyers are aggressive moves which will help drive early growth and usage,” said Barton. “But it’s still, by volume of content, a very limited video service with no catalogue content wholly reliant on new, untested intellectual properties.

“The strength of the Apple hardware and services ecosystem means that it practically can’t fail and a lot depends on how effectively and frequently Apple drops new shows to maintain viewers’ interest levels. Apple’s $6 billion production investment and its ability to surface and promote Apple Video content to a global audience of hundreds of millions throughout its tightly integrated hardware and software ecosystem give the service huge potential.”

On top of the phone and telly stuff Apple also unveiled the latest versions of its Watch and iPad in a mega-launch that it would previously have scattered throughout the year. Just as with the phones the new devices are largely spec upgrades, but we were reminded what a relative bargain the iPad is at just $329 (Apple is still charging $130 for a modem, for some reason, and it’s hard to see why anyone would pay that when they can just tether).

One other announcement was Apple Arcade, a gaming subscription service that Apple has been banging on about for a while. Just like TV+ it costs a fiver a month (although there’s no free subscription offer) and offers a smallish selection of exclusive games. People are less impressed with the games service though.

“It’s difficult to get excited about the games subscription, it does include some exclusive, new titles which didn’t appear particularly noteworthy from a gaming perspective,” said Barton. “Most of the games included didn’t sell well on a standalone basis so it’s difficult to see who this will appeal to. Perhaps there is a casual gamer segment which appreciates the simplicity of a subscription for a heavily curated selection of mobile games, but I won’t hold my breath.”

Since smartphone innovation has been stagnant for the best part of a decade, Apple decided to seek revenue and margin growth from flogging services to its installed base. Apple TV+ is a major step further in that direction, but the decision to be more aggressive on pricing is also a sensible strategy when it comes to expanding that installed base and thus the addressable market for its services.

Apple tells Google to stay in its lane over security claims

Apple has hit back at a Google blog post, which emerged last week, suggesting its rival in the smartphone OS segment was ‘stoking fear’ amongst its users.

The presence of vulnerabilities is nothing to be too surprised about, though when the owner of one smartphone OS points out said vulnerabilities to a rival, egos are always going to flare up. This appears to be the case here, with Apple offering its rebuttal to the Google claims, attempting to calm the waters.

“Google’s post, issued six months after iOS patches were released, creates the false impression of ‘mass exploitation’ to ‘monitor the private activities of entire populations in real time,’ stoking fear among all iPhone users that their devices had been compromised. This was never the case,” the statement reads.

Firstly, Apple claims the vulnerability was narrow, not broad-based as suggested by the Google blog post. Fewer than 12 websites were able to exploit the vulnerability. Secondly, Apple has claimed these websites were only operational for two months, as opposed to the two-year period which Google is claiming.

The vulnerabilities were reported to Apple in a responsible fashion in February, though last weeks blog from Ian Beer of Google’s Project Zero is what is irking Apple.

What Google pointed out to Apple in February is that there were several nefarious websites which exploited a flaw in the iOS programming to allow hackers access to iPhone users’ contacts, photos and location, as well as data from apps like iMessage, WhatsApp, Telegram, Gmail and Google Hangouts.

The vulnerability covered each version of the OS from iOS 10 through to the latest version of iOS 12, though it was not immediately clear from the blog post whether any data was actually taken from users. Apple has not offered any insight here either.

As mentioned before, the idea of searching for vulnerabilities is not new. Bug Bounties are often offered to individuals and companies to find and report the flaws to the company which owns the software in a responsible manner. Interestingly enough, bug bounty platform HackerOne has recently announced it has raised $36.4 million in a series D round of funding led by Valor Equity Partners.

We suspect Apple isn’t that concerned about a flaw being highlighted, its more who did the highlighting.

Aside from a few very minor ‘also rans’, the smartphone operating system market is dominated by two players; Google’s Android and Apple’s iOS. This is where you have to take the severity claims about the vulnerabilities with a pinch of salt; it is of course in the benefit of Google to make the vulnerabilities seem as serious as possible.

The publication of the Google post could have come at a better time for Apple considering it is set to unveil its latest iPhone tomorrow (September 10).

“A lack of 5G support in the new iPhone won’t surprise anyone, though it will still disappoint operators looking for 5G devices to help them drive traffic to new 5G networks,” said Peter Jarich, Head of GSMA Intelligence.

“At the same time, new features that are expected – improved camera functionality, improved processor, upgrade to Wi-Fi 6 – may all seem incremental rather than revolutionary, particularly if the product line and form factor line-ups remain relatively constant.”

As it is unlikely the new iPhone will offer anything particularly innovative or revolutionary, combined with the high likelihood of it costing a small fortune, Apple will want to quash any negative connotations. The iLifers are extremely loyal, but with 5G attracting headlines around the world, some might be tempted to jump ship to a 5G-compatible device. Google’s claim of vulnerabilities might encourage a few more.

Google exposes massive iPhone hacking operation

Google’s Project Zero security team has revealed a vulnerability in iOS that exposed large numbers of users to a hack that allowed the installation of a monitoring implant.

This kind of hack is called ‘zero-day’, the definitions of which vary, but which refers to a vulnerability in a piece of software that leaves it open to exploitation by outside actors. The stated aim of Project Zero is to make zero-day hard and it goes about doing so by trying to find such vulnerabilities. Apparently it always publishes these findings after giving the owner of the software time to address the vulnerability and Apple was told about this one back at the start of February this year.

“Now, after several months of careful analysis of almost every byte of every one of the exploit chains, I’m ready to share these insights into the real-world workings of a campaign exploiting iPhones en masse,” wrote Ian Beer of Project Zero in the blog post detailing the findings. “Let’s also keep in mind that this was a failure case for the attacker: for this one campaign that we’ve seen, there are almost certainly others that are yet to be seen.”

This is at best very embarrassing for Apple, which prides itself on the relative lack of malware on its close software platforms. The malware was able to install itself on iOS devices if they merely visited an infected website, with no manual download required. Upon successful installation the malware apparently granted the bad guys access to everything on the phone, including passwords, chat histories, etc.

Google is, of course, Apple’s sole rival in the mobile operating system space, so it does seem pretty convenient that it should be discovering iOS vulnerabilities and publicising them. Project Zero’s policy, it seems, is to publish all such findings after an appropriate delay to allow for patching, which it should be stressed Apple did immediately, but you have to wonder whether it’s quite as keen to bring Android’s failings into the public domain.

Apple given golden opportunity to crack India with relaxed rules

Apple has struggled to gain any sort of traction in the Indian markets to date, but new Government rules could perhaps open the door a crack.

India is a market which represents a significant opportunity for the major players in the digital economy. It has the second-largest population globally and a smartphone penetration rate of roughly 24%, but one of the few markets worldwide where smartphone shipments are increasing quickly. Thanks to certain market disruptions, India is currently under-going its own digital revolution, with the increasingly wealthy middle-class easing into the digital euphoria Western consumers have been accustomed to as the norm.

Year Smartphone penetration1 Average income (US $)2
2018 23.9% 2,020
2017 21.9% 1,830
2016 20.4% 1,690
2015 18.6% 1,600

1Statista 2World Bank Group

The evolution of India and the surge of the digital economy in the country is moving at a dramatic pace. The opportunity for profit is monstrous, but this is a tricky market to crack.

This is the conundrum which Apple is currently facing. It currently has less than 2% of market share across the country (which isn’t increasing), and premium prices are stifling any genuine ambition to increase this.

Indian consumers are gradually spending more on devices, though by the time Apple’s prices would be deemed palatable, other brands might have already developed a strong sense of loyalty; do not underestimate the power of the Android/iOS divide.

Brand Market share
Xiaomi 31%
Samsung 26%
Vivo 6%
Oppo 6%
Realme >1%
Apple >1%

Figures curtesy of Counterpoint Research – Q2 2019 shipments

However, there is a glimmer of hope. The Indian Government has this week announced it will relax rules which dictate how foreign companies can operate in the country. Fortunately for Apple, the easement will allow it to sell directly to customers through its eCommerce channels.

In by-gone years, a foreign company had to source 30% of its production locally to create a retail presence in India. This presence includes online channels. With such reliance on China for the manufacturing elements of the supply chain, Apple has always struggled to meet these requirements. As a result, Apple’s devices have been sold through local partners, who add a premium to an already premium product; it has struggled to gain a foothold in the market.

Another element tied to this is the brand story. The Apple Store is a presence in 25 countries around the world, not only presenting a direct-selling opportunity, but a chance to offer an experience to current and potential customers. This is a fundamental building block in the Apple strategy, which is all about creating a brand and an identity to cultivate customers into the loyal iLifers you see around the world today.

Thanks to new elements being considered by the Indian Government, Apple now meets the requirements and will allegedly begin selling products through its own eCommerce channels in the coming months. These new considerations take into account more iPhones will be manufactured in India, not only for Indian consumers, but for export to Europe as well. This is massive win for Apple.

In short, there are two massive benefits for Apple. Firstly, it can own the purchasing relationship with the customer, dictating the messaging and reducing the price while maintaining profit margins. Secondly, it can begin to create the Apple experience for customers to nurture the sense of loyalty which is so critical to the Apple success over the years.

Apple is an incredibly successful smartphone manufacturer because it creates excellent devices, but the work which has been done to build loyalty with its customer base should never be underestimated.

Think back to the 90s and 00s when you saw Apple adverts on TV. None of these adverts ever really discussed products in the way you would expect but talked about the Apple experience. A huge proportion of advertising today is designed around story-telling and brand experience, but Apple was arguably one of the first to do it and remains one of the best at building this experience.

The result of these campaign was an ‘us’ and ‘them’ mentality which persists today. Whether it pins iOS versus Android, or Mac versus PC, the split is very apparent, and crossover is very rare. Not only does this segmented approach maintain loyalty for the individual products, it presents significant cross-selling opportunities. How many iPhone users have an iWatch, an iPad or a Mac also? We suspect a high percentage.

Shifting people into, and keeping them in, the Apple universe can partly be attributed back to the brand marketing campaigns, the closed ecosystem and ownership of sales channels and brand experience. And now, it presents another massive opportunity moving forward; software and services revenues.

Period Net sales Software and services revenue Percentage of total
Q3 2019 53,809 11,455 21.2
Q2 2019 58,015 11,450 19.7
Q1 2019 84,310 10,875 7.7
Q4 2018 62,900 9,981 15.8
Q3 2018 53,265 10,170 19
Q2 2018 61,137 9,850 16.1
Q1 2018 88,293 9,129 10.3

Figures taken from Apple financial reports – USD ($) in millions

Apple CEO Tim Cook has made a big deal about software and services, and he is very right. It attracts recurring revenues without the R&D and manufacturing price tag. There will of course still be R&D, but smartphones are very expensive products to produce at the level Apple customers demand.

Generating revenues through AppleCare, iTunes, Apple Music, iCloud, Apple Pay, Apple Books, Siri, maps, search or TV subscription services becomes substantially more profitable once people are bought into the ecosystem. And as you can see from the table above, it is becoming an increasingly important facet of the financial spreadsheets.

With many users persisting with the OS they have become accustomed to, if Apple wants to make India a profitable market, it will have to start embedding itself in the minds and lives of Indian consumers today.

The Indian market is one which offers great prospects and profits for those who play their hands wisely. Up to now, Apple would have been written off by many industry commentators, but will changes to the rules, the door is slightly ajar. But that is all it is right now.

Apple will have to convince smartphone users it is a better alternative than the Android ecosystem, while also justifying the premium it traditionally charges for products. This will be a very difficult battle, but Apple is in a better position today than it was yesterday.

Silicon Valley’s ‘ask for forgiveness, not permission’ attitude is wearing thin

Silicon Valley has often pushed the boundaries in pursuit of progress, but the it deserves everything it gets if it continues to try the patience of consumers and regulators with privacy.

‘It is easier to ask for forgiveness, than beg for permission’ is a common, if largely unattributable, phrase which seems to apply very well to the on-going position of Silicon Valley. It is certainly easier to act and face the consequences later, but it should not be right or allowed. This is the approach the internet giants are taking on a weekly basis, and someone will have to find the stomach and muscle to stop this abuse of power, influence and trust.

The most recent chapter in this on-going tale of deceit and betrayal concerns the voice assistants which are becoming increasingly popular with consumers around the world.

Apple is the latest company to test the will of the general public as it has now officially ended an internal process which is known as ‘grading’. In short, humans listen to Siri interactions with customers, transcribing the interaction in certain cases, to help improve the accuracy of the digital assistant.

“We know that customers have been concerned by recent reports of people listening to audio Siri recordings as part of our Siri quality evaluation process — which we call grading,” Apple said in a blog entry. “We heard their concerns, immediately suspended human grading of Siri requests and began a thorough review of our practices and policies. We’ve decided to make some changes to Siri as a result.”

Of course, it is perfectly reasonable for Apple to want to improve the performance of Siri, though it must ask for permission. This is the vital step in the process which Apple decided to leave out.

The new process will seek consent from users through an ‘opt-in’ system, making it compliant, while the default position for all Siri interactions will be to not store information. For those consumers who do opt-in to aid Apple in training Siri, the audio will only be transcribed and reviewed by permanent Apple employees.

This process should have been in-place prior to the ‘grading’ system being implemented. It is inconceivable that Apple did not realise this would break privacy regulations or breach the trust it has been offered by the customer. It decided not to tell the consumer or authorities this practice was in place. It muddied the waters to hide the practice. It lied to the user when it said it respects privacy principles and rights.

Apple acted irresponsibly, unethically and underhandedly. And there is almost no plausible explanation that it did so without knowledge and understanding of the potential impact of these actions. If it did not understand how or why this practice violated privacy principles or regulations, there must be an epidemic of incompetence spreading through the ranks at Cupertino.

What is worth noting is Apple is not alone; Google and Facebook are just as bad at misleading or lying to the user, breaking the trust which has been offered to these undeserving companies.

Google is currently under investigation for the same abuse of trust and privacy principles, this time for the Google Assistant.

“We have made it clear to Google’s representatives that essential requirements for the operation of the Google Assistant are currently not fulfilled,” said Johannes Caspar, Hamburg Commissioner for Data Protection and Freedom of Information. “This not only applies to the practice of transcribing, but to the overall processing of audio data generated by the operation of the language assistance system.”

The investigation from the Hamburg data protection authority has pressured Google into changing the way it trains its digital assistant. Earlier this month, Belgian news outlet VRT NWS revealed 0.2% of conversations with Google Assistant were being listened to by external contractors. At least one audio clip leaked to the news outlet included a couple’s address and personal information about their family.

Google has now said it has stopped the practice in the EU, but not necessarily elsewhere, and the Hamburg DPA has said it will have to seek permission from users before beginning anything remotely similar.

At the same regulator, Facebook has been dragged into the drama.

“In a special way, this also applies to Facebook Inc., where as part of the Facebook Messenger to improve the transcription function offered there a scheduled manual evaluation was not only the human-to-machine communication, but also the human-to-human communication,” said Caspar. “This is currently the subject of a separate investigation.”

Two weeks ago, reports emerged Facebook had hired external contractors to transcribe audio from calls made across the Messenger platform. Once again, users were not informed, while consent was not obtained, but what makes this incident even worse, is there does not appear to be any logical reason for Facebook to need this data.

The only reason we can see why Facebook would want this data to improve algorithms is to take the insight to feed the big-data, hyper-targeted advertising machine. However, this is a massive no-no and a significant (and illegal) breach of trust.

All of these examples are focused on transcription of audio data, though there are many other instances of privacy violations, and demonstrate the ‘easier to ask for forgiveness than permission attitude’ which has engulfed Silicon Valley.

We cannot believe there is any way these companies did not understand or comprehend these actions and practices were a breach of trust and potentially breaking privacy rules. These companies are run by incredibly smart and competent people. Recruitment drives are intense, offices and benefits are luxurious, and salaries are sky-high for a very good reason; Silicon Valley wants to attract the best and brightest talent around.

And it works. The likes of Google, Facebook and Apple have the most innovative engineers, data scientists who can spot the wood for the trees, the savviest businessmen, accountants who are hide-and-seek champions and the slipperiest lawyers. They consider and contemplate all potential gains and consequences from any initiative. We cannot believe there is any conceivable explanation as to why these incredibly intelligent people did not recognise these initiatives were either misleading, untransparent or non-compliant.

The days of appearing before a committee, cap in hand, begging for forgiveness with a promise it will never happen again cannot be allowed to continue. The judges, politicians and consumers who believe these privacy violations are done by accident are either incredibly naïve, absurdly short-sighted, woefully ill-informed or, quite frankly, moronic.

Silicon Valley must be forced to act responsible and ethically, because it clearly won’t do it on its own.