Fining companies who have spare billions down the backs of their couches is pointless, but what about threatening their executives with prosecution? In a scathing ruling (PDF), US District Judge Yvonne Gonzales Rogers finds that Apple’s vice-president of finance, Alex Roman, “lied outright under oath” and that CEO Tim Cook “chose poorly” in failing to follow her injunction in Epic Games v. Apple. She asks the US Attorney for the Northern District of California to investigate whether criminal contempt proceedings are appropriate. “This is an injunction, not a negotiation.”
As noted here last week, last year Google lost the similar Epic Games v. Google. In both cases, Epic Games complained that the punishing commissions both companies require of the makers of apps downloaded from their app stores were anti-competitive. This is the same issue that last week led the European Commission to announce fines and restrictions against Apple under the Digital Markets Act. These rulings could, as Matt Stoller suggests, change the entire app economy.
Apple has said it strongly disagrees with the decision and will appeal – but it is complying.
At TechRadar, Lance Ulanoff sounds concerned about the impact on privacy and security as Apple is forced to open up its app store. This argument reminds of a Bell Telephone engineer who confiscated a 30-foot cord from Woolworth’s that I’d plugged in, saying it endangered the telephone network. Apple certainly has the right to market its app store with promises of better service. But it doesn’t have the right to defy the court to extend its monopoly, as Mike Masnick spells out at Techdirt.
Masnick notes the absurdity of the whole thing. Apple had mostly won the case, and could have made the few small changes the ruling ordered and gone about its business. Instead, its executives lied and obfuscated for a few years of profits, and here we are. Although: Apple would still have lost in Europe.
A Perplexity search for the last S&P 500 CEO to be jailed for criminal contempt finds Kevin Trudeau. Trudeau used late-night infomercials and books to sell what Wikipedia calls “unsubstantiated health, diet, and financial advice”. He was sentenced to ten years in prison in 2013, and served eight. Trudeau and the Federal Trade Commission formally settled the fines and remaining restrictions in 2024.
The last time the CEO of a major US company was sent to prison for criminal contempt? It appears, never. The rare CEOs who have gone to prison, it’s typically been for financial fraud or insider trading. Think Worldcom’s Bernie Ebbers. Not sure this is the kind of innovation Apple wants to be known for.
Reuters reports that 23andMe has, after pressure from many US states, agreed to allow a court-appointed consumer protection ombudsman to ensure that customers’ genetic data is protected. In March, it filed for bankrupcy protection, fulfilling last September’s predictions that it would soon run out of money.
The issue is that the DNA 23andMe has collected from its 15 million customers is its only real asset. Also relevant: the October 2023 cyberattack, which, Cambridge Analytica-like, leveraged hacking into 14,000 accounts to access ancestry data relating to approximately 6.9 million customers. The breach sparked a class action suit accusing the company of inadequate security under the Health Insurance Portability and Accountability Act (1996). It was settled last year for $30 million – a settlement whose value is now uncertain.
Case after case has shown us that no matter what promises buyers and sellers make at the time of a sale, they generally don’t stick afterwards. In this case, every user’s account of necessity exposes information about all their relatives. And who knows where it will end up and for how long the new owner can be blocked from exploiting it?
There’s no particular relationship between the 23andMe bankruptcy and the US government. But they make each other scarier: at 404 Media, Joseph Cox reported two weeks ago that Palantir is merging data from a wide variety of US departments and agencies to create a “master database” to help US Immigration and Customs Enforcement target and locate prospective deportees. The sources include the Internal Revenue Service, Health and Human Services, the Department of Labor, and Housing and Urban Development; the “ATrac” tool being built already has data from the Social Security Administration and US Citizenship and Immigration Services, as well as law enforcement agencies such as the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service.
As the software engineer and essayist Ellen Ullman wrote in 1996 in her book Close to the Machine, databases “infect” their owners with the desire to link them together and find out things they never previously felt they needed to know. The information in these government databases was largely given out of necessity to obtain services we all pay for. In countries with data protection laws, the change of use Cox outlines would require new consent. The US has no such privacy laws, and even if it did it’s not clear this government would care.
“Never volunteer information,” used to be a commonly heard-mantra, typically in relation to law enforcement and immigration authorities. No one lives that way now.
Illustrations: DNA strands (via Wikimedia).
Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. She is a contributing editor for the Plutopia News Network podcast. Follow on Mastodon or Bluesky.