Last week, two different verdicts were returned by courts dealing with a dispute between American electronics giant Apple, and South Korean electronics giant Samsung. The dispute is over a whole pile of perceived infringements and counter-infringements over technologies and design. Since the competition between the two companies is global in scope, the same suits keep turning up in different countries, and that has produced some rather different verdicts.
In South Korea, Apple was found guilty of appropriating technologies from Samsung and vice versa, with both awarded damages. In the US, all of Samsung’s claims were dismissed and the company was ordered to pay over a billion dollars in damages. Courts in Britain have ruled several times that Samsung has not infringed Apple’s designs. Germany has ruled in Apple’s favour in the past, Holland in Samsung’s, and similar battles have occurred across Europe, Australia, and Japan.
Who’s right? Frankly, I don’t care. The whole business is undignified and an enormous waste of time on both sides. The judges should have thrown the cases out of court in the first place as an abuse of the legal system. Of course, each of these battles is a part of a larger war between Apple and its rivals on the Google Android operating system. Android has the biggest share of the smartphone market, and Apple wants it gone. Steve Jobs famously declared war on Android, and that’s exactly what this is.
Does Apple have a point, that Android copies their technology? Maybe, but the primary reason for all this legal back and forth is that Apple is a shareholder corporation – the biggest in the world. And it desperately wants to stay there. Shareholder corporations are not allowed to stand still. They must grow. You can either grow by creating new products and carving out new niches, like Apple did with the iPad. Or there are alternative ways to create profits. You can cut costs by using cheap overseas labour. You can dodge your taxes, or you can bludgeon the competition out of the way with superior legal firepower.
Everyone applauds the company when they pursue the first strategy. Rightly so – Apple is second to none in developing innovative and desirable consumer electronics. What annoys me about Apple is the relative silence over the dark side of their business. Apple is a notorious bully, willing to set their lawyers on just about anyone who might be perceived as a threat. We’re not just talking about Samsung and HTC either. Last year the owners of a small family-run cafe in Germany were sent a cease and desist letter for using this logo. Is anyone really going to think Apple has branched into coffee and cake?
Apple doesn’t pay its taxes either. This is a photo of the iTunes Europe head office. Yep, it’s a box on a wall, on a street in Luxembourg. You’d think a major corporation like Apple would have something grander than that, but of course its operations aren’t really there. The important thing is that the company is registered here, because Luxembourg is of course a tax haven, the second most secretive financial jurisdiction in the world. Tax campaign US Uncut have targeted Apple in the US. As yet, I’m unaware of any protests outside Apple stores in Britain.
Apple’s poor labour record is probably better known. The suicide prevention nets at the Foxconn factory provided something of an iconic image, with the launch of the iPad marred by rumours of a spate of worker suicides. Conditions at Foxconn aren’t all that bad by Chinese standards, but Apple has many, many suppliers across dozens of factories. Improving conditions at Foxconn has got critics off Apple’s back, but that is the tip of the iceberg. In 2010 the company audited 127 different factories and the majority of them were below standard on health and safety, pay and worker rights – and this is Apple’s own inspections. We can’t independently verify standards across the supply chain because, unlike many other electronics companies, Apple doesn’t publish a list of suppliers.
Of course, Apple isn’t doing anything that other electronics companies aren’t doing too. It’s no worse than its competitors, and is certainly no worse than Exxon, the company it overtook on the way to being the world’s biggest corporation. But it is the market leader, and where it goes others will follow. Its products are the apotheosis of consumer desire, and its late CEO is the closest to a secular saint that you will ever find. Apple doesn’t compete on price, so it doesn’t have to screw its workers to increase its margins. It could be so much more than it is. It could pioneer ethical electronics, and set a new standard. If anyone can do it, Apple can – and it will, if it’s customers demand it.
So when does that start, I wonder. How many more ugly court cases do we need before customers start paying attention, how many sweatshop exposes, how much tax has to be avoided? I don’t know, but I hope the changes at the top of the company recently will open the door to a more honest business.
The Earthbound Report 
Thanks again Jeremy. An apple a day will keep the tax man away… Apple, ethically no worse than any other electronics corp but no better either. A good look at the size of the bite of Apple and more importantly the need to stop this stive for domination and supremacy.
The exploitation of tax havens is only made possible by tax systems that depend on the taxation of people and companies. The first are mobile. The second are nothing more than a legal fiction. The solution lies in the hands of the governments that presently suffer the losses. Hint: land cannot be hidden or removed to a tax haven and its rental value is public knowledge and readily ascertainable. If governments impose tax systems that are defective in principle then they will lose revenue that is due to them.
As for Apple, the victory will prove phyrric. The device with its delicate screen is scarcely fit for purpose and whoever had the idea of typing on a touch screen with a miniature qwerty keyboard? The court decision should give a useful boost to innovators who should come up with a device designed according to sound ergonomic principles.