There is a long line of articles questioning Apple’s ability to deliver on artificial intelligence because of its position on data privacy. Today, we got another in the form of a newsletter.

Reed Albergotti, Semafor:

Meanwhile, Apple was focused on vertically integrating, designing its own chips, modems, and other components to improve iPhone margins. It was using machine learning on small-scale projects, like improving its camera algorithms.

[…]

Without their ads businesses, companies like Google and Meta wouldn’t have built the ecosystems and cultures required to make them AI powerhouses, and that environment changed the way their CEOs saw the world.

Again, I will emphasize this is a newsletter. It may seem like an article from a prestige publisher that prides itself on “separat[ing] the facts from our views”, but you might notice how, aside from citing some quotes and linking to ads, none of Albergotti’s substantive claims are sourced. This is just riffing.

I remain skeptical. Albergotti frames this as both a mindset shift and a necessity for advertising companies like Google and Meta. But the company synonymous with the A.I. boom, OpenAI, does not have the same business model. Besides, Apple behaves like other A.I. firms by scraping the web and training models on massive amounts of data. The evidence for this theory seems pretty thin to me.

But perhaps a reluctance to be invasive and creepy is one reason why personalized Siri features have been delayed. I hope Apple does not begin to mimic its peers in this regard; privacy should not be sacrificed. I think it is silly to be dependent on corporate choices rather than legislation to determine this, but that is the world some of us live in.

Let us concede the point anyhow, since it suggests a role Apple could fill by providing an architecture for third-party A.I. on its products. It does not need to deliver everything to end users; it can focus on building a great platform. Albergotti might sneeze at “designing its own chips […] to improve iPhone margins”, which I am sure was one goal, but it has paid off in ridiculously powerful Macs perfect for A.I. workflows. And, besides, it has already built some kind of plugin architecture into Apple Intelligence because it has integrated ChatGPT. There is no way for other providers to add their own extension — not yet, anyhow — but the system is there.

Gus Mueller:

The crux of the issue in my mind is this: Apple has a lot of good ideas, but they don’t have a monopoly on them. I would like some other folks to come in and try their ideas out. I would like things to advance at the pace of the industry, and not Apple’s. Maybe with a blessed system in place, Apple could watch and see how people use LLMs and other generative models (instead of giving us Genmoji that look like something Fisher-Price would make). And maybe open up the existing Apple-only models to developers. There are locally installed image processing models that I would love to take advantage of in my apps.

Via Federico Viticci, MacStories:

Which brings me to my second point. The other feature that I could see Apple market for a “ChatGPT/Claude via Apple Intelligence” developer package is privacy and data retention policies. I hear from so many developers these days who, beyond pricing alone, are hesitant toward integrating third-party AI providers into their apps because they don’t trust their data and privacy policies, or perhaps are not at ease with U.S.-based servers powering the popular AI companies these days. It’s a legitimate concern that results in lots of potentially good app ideas being left on the table.

One of Apple’s specialties is in improving the experience of using many of the same technologies as everyone else. I would like to see that in A.I., too, but I have been disappointed by its lacklustre efforts so far. Even long-running projects where it has had time to learn and grow have not paid off, as anyone can see in Siri’s legacy.

What if you could replace these features? What if Apple’s operating systems were great platforms by which users could try third-party A.I. services and find the ones that fit them best? What if Apple could provide certain privacy promises, too? I bet users would want to try alternatives in a heartbeat. Apple ought to welcome the challenge.

There is a free market argument that can be made about how Apple gets to design its own ecosystem and, if it is so restrictive, people will be more hesitant to buy an iPhone since they can get more choices with an Android phone. I get that. But I think it is unfortunate so much of our life coalesces around devices which are so restrictive compared to those which came before.

Recall Apple’s “digital hub” strategy. The Mac would not only connect to hardware like digital cameras and music players; the software Apple made for it would empower people to do something great with those photos and videos and their music.

The iPhone repositioned that in two ways. First, the introduction of iCloud was a way to “demote” the Mac to a device at an equivalent level to everything else. Second, and just as importantly, is how it converged all that third-party hardware into a single device: it is the digital camera, the camcorder, and the music player. As a result, its hub-iness comes mostly in the form of software. If a developer can assume the existence of particular hardware components, they have extraordinary latitude to build on top of that. However, because Apple exercises control over this software ecosystem, it limits its breadth.

Like the Mac of 2001, it is also a hub for accessories — these days, things like headphones and smartwatches. Apple happens to make examples of both. You can still connect third-party devices — but they are limited.

Eric Migicovsky, of Pebble:

I want to set expectations accordingly. We will build a good app for iOS, but be prepared – there is no way for us to support all the functionality that Apple Watch has access to. It’s impossible for a 3rd party smartwatch to send text messages, or perform actions on notifications (like dismissing, muting, replying) and many, many other things.

Even if you believe Apple is doing this not out of anticompetitive verve, but instead for reasons of privacy, security, API support, and any number of other qualities, it still sucks. What it means is that Apple is mostly competing against itself, particularly in smartwatches. (Third-party Bluetooth headphones, like the ones I have, mostly work fine.)

The European Commission announced guidance today for improving third-party connectivity with iOS. Apple is, of course, miserable about this. I am curious to see the real-world results, particularly as the more dire predictions of permitting third-party app distribution have — shockingly — not materialized.

Imagine how much more interesting this ecosystem could be if there were substantial support across “host” platforms.

⌥ Permalink

Last month, Brazilian competition authorities ruled against Apple, finding in an increasingly familiar pattern that its anti-steering App Store rules are illegal. It imposed a twenty-day deadline for compliance.

Filipe Espósito, 9to5Mac:

According to a new Valor Econômico report, a Brazilian Federal Court judge has ruled that the decision by Cade, the Brazilian regulator, is “disproportionate and unnecessary.” The judge understood that the measures imposed by the regulator “change, in a sensitive and structural way” Apple’s business operation.

Cade ruled on November 26 that Apple would have 20 days to comply with antitrust legislation, otherwise it would be fined R$250,000 (US$42,000) per day. Apple had previously appealed on the grounds that the changes requested were too complex and would take too long to be made, so the company wouldn’t be able to meet the 20-day deadline.

Twenty days does seem like a tight turnaround. I have obviously no idea what it would take to copy-and-paste the same policies it uses in Japan, Korea, and the United States, but perhaps it would be easier to rip off the bandage and do so worldwide.

⌥ Permalink

Adam Satarino, New York Times:

But as Ms. [Margrethe] Vestager closes out her era in Brussels, regulating the tech industry has become more mainstream around the world. Thanks to her, Europe is now widely seen as the pioneer of the toughest laws against tech. U.S. regulators have in recent years followed Europe by bringing antitrust lawsuits against Google, Apple, Meta and Amazon. Regulators in South Korea, Australia, Brazil, Canada and elsewhere are also taking on the tech giants.

Vestager’s term has been defined by patience. Owing to both the rapid growth in size and complexity of technology firms, and tedious legal processes, these cases have taken considerable time. Some of the earliest cases Vestager brought have just been settled. It is still too early to tell whether the many changes resulting from these cases will have a radical effect on the technology landscape.

However, as Satarino writes, her approach has been influential worldwide. The technology in seemingly every country outside authoritarian states like China and Russia has been under the thumb of big companies most often based in the United States. Sometimes, those products and services clash with local expectations and values, or consume business viability. Not all of these corporations got where they are by illegitimate means, or are unanimously behaving in illegally anticompetitive ways. But it is sensible to investigate and become a correcting force.

For too long, regulators were too hesitant to question tech companies. These businesses were perpetually too new and too complicated. Vestager broke the dam.

⌥ Permalink

Competition Bureau Canada:

The Competition Bureau is taking legal action against Google for anti-competitive conduct in online advertising technology services in Canada. Following a thorough investigation, the Bureau has filed an application with the Competition Tribunal that seeks to remedy the conduct for the benefit of Canadians.

This has become a familiar announcement: a consumer protection agency, somewhere in the world, is questioning whether a giant technology conglomerate has abused its power. A dam has burst.

⌥ Permalink

Leah Nylen, Josh Sisco, and Dina Bass, Bloomberg:

The US Federal Trade Commission has opened an antitrust investigation of Microsoft Corp., drilling into everything from the company’s cloud computing and software licensing businesses to cybersecurity offerings and artificial intelligence products.

Seems like a lot of people who thought Microsoft would escape antitrust investigations in the U.S. might have been a little too eager.

This kind of scrutiny is a good thing, and long overdue. Yet one of the unavoidable problems of reducing the influence of these giant corporations now is the pain it is going to cause — almost by definition. If a corporation is abusing its power and scale to such a degree the FTC initiates an investigation, unwinding that will have — to put it mildly — an effect. We are seeing this in the Google case. This is true for any situation where a business or a group of people with too much influence needs correcting. That does not mean it should not happen.

It is true that Microsoft’s products and services are the backbone of businesses and governments the world over. These are delivered through tight integrations, all of which encourages further fealty to this singular solution. For example, it used its dominant position with Office 365 to distribute Teams for free, thereby making it even harder for other businesses to compete. It then leveraged Outlook and Teams to boost its web browser, after doing the same with Windows. If it charged for Teams out of the gate, this would be having a different discussion.

Obviously, the FTC’s concerns with Microsoft’s business practices stretch well beyond bundling Teams. According to this Bloomberg report, the Commission is interested in cloud and identity tying, too. On the one hand, it is enormously useful to businesses to have a suite of products with a single point of management and shared credentials. On the other hand, it is a monolithic system that is a non-starter for potential competitors.

The government is understandably worried about the security and stability risks of global dependence on Microsoft, too, but this is odd:

The CrowdStrike crash that affected millions of devices operating on Microsoft Windows systems earlier this year was itself a testament to the widespread use of the company’s products and how it directly affects the global economy.

This might just be Bloomberg’s contextualizing more than it is relevant to the government’s position. But, still, it seems wrong to me to isolate Windows as the problem instead of Crowdstrike itself, especially with better examples to be found in the SolarWinds breach and its track record with first-party security.

⌥ Permalink

Michael Kan, PC Magazine:

Mozilla points to a key but less eye-catching proposal from the DOJ to regulate Google’s search business, which a judge ruled as a monopoly in August. In their recommendations, federal prosecutors urged the court to ban Google from offering “something of value” to third-party companies to make Google the default search engine over their software or devices. 

“The proposed remedies are designed to end Google’s unlawful practices and open up the market for rivals and new entrants to emerge,” the DOJ told the court. The problem is that Mozilla earns most of its revenue from royalty deals — nearly 86% in 2022 — making Google the default Firefox browser search engine.

This is probably another reason why U.S. prosecutors want to jettison Chrome from Google: they want to reduce any benefit it may accrue from trying to fix its illegal search monopoly. But it seems Google’s position in the industry is so entrenched that correcting it will hurt lots of other businesses, too. That does not mean it should not be broken up or that the DOJ’s proposed remedies are wrong, however.

⌥ Permalink

I have to say, it is quite an odd thing to be listening to a podcast and hear one’s own name. This recently happened to me on the latest episode of “Upgrade”. It feels like I am about to be called to the principal’s office or something. But I was not.

Myke Hurley and Jason Snell discussed an article I wrote about the more granular control available to users in iOS 18 when apps request access to their contacts. (My piece is a response to a New York Times story; Snell also linked to both with some commentary.) Their chat centres Apple’s scale and influence. Even little decisions the company makes are capable of transforming entire industries.

Hurley raises an apt comparison to App Tracking Transparency, which is exactly what I was thinking about when I wrote my piece. I am similarly unsympathetic to corporate empires built on illicitly obtained data. If you cannot make money when users are given a choice to consent, your business model probably sucks. But I do think it is concerning how powerful both of the major players were in the aftermath of that announcement: Meta, for hoarding behavioural data on billions of people; and Apple, for its ability to give users options.

I see parallels to Google’s power over the web. The near-uniform layout and structure of webpages is thanks to Google’s specific suggestions for improving the likelihood of ranking higher. The main difference is Google’s suggestions are sort of optional; if a website’s owner does not care much about search traffic, they can do whatever they want. The prompts on iOS, on the other hand, are baked into the system.

As Snell says, these apps “have to make the case” for granting permission. I do not think that is such a bad thing, and I am amenable to their suggestion of Apple’s built-in apps being placed on a level playing field. I think a lot of this would be more predictable if privacy laws were stronger. A basic level of privacy protections should not be a competitive advantage, nor should users be required to navigate either unceasing permissions dialogs or terms of service agreements to understand the myriad ways their personal information is being exploited — because their personal information should not be exploited.

⌥ Permalink

Alfonso Maruccia, TechSpot:

Its most recent financials show Mozilla gets $510 million out of its $593 million in total revenue from its Google partnership. This precarious financial position is a side effect of its deal with Alphabet, which made Google the search engine default for newer Firefox installations.

Jason Del Rey, Fortune:

Mozilla is putting on a brave face for now, and not directly addressing the existential threat that the ruling appears to pose.

“Mozilla has always championed competition and choice online, particularly in search,” a spokesperson said in a statement to Fortune on Monday. “We’re closely reviewing the court’s decision, considering its potential impact on Mozilla and how we can positively influence the next steps… Firefox continues to offer a range of search options, and we remain committed to serving our users’ preferences while fostering a competitive market.”

It is possible Mozilla will not be impacted by remedies to Google’s illegal monopoly, the details of which will begin to take shape next month. It seems possible Mozilla could be losing virtually all its revenue, thereby destabilizing the organization behind one of the few non-Chromium browsers and the best documentation of web technologies available anywhere.

Trying to untangle an illegal monopolist is necessarily difficult. This will be a long and painful process for everyone. The short-term resolutions might be ineffectual and irritating, and they may not change Google’s market position. But it is important to get on the record that Google has engaged in illegal conduct to protect its dominance, and so it will be subjected to new oversight and scrutiny. This exercise is worth it because there ought to be limits to market power and anticompetitive behaviour.

⌥ Permalink

Ashley Belanger, Ars Technica:

Google just lost a massive antitrust trial over its sprawling search business, as US district judge Amit Mehta released his ruling, showing that he sided with the US Department of Justice in the case that could disrupt how billions of people search the web.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in his opinion. “It has violated Section 2 of the Sherman Act.”

Google will surely contest this finding when its implications are known; Mehta has not announced what actions the government will take against Google.

The opinion is full of details about the precise nature of how Google search and its ads work together, Google’s relationship with Apple and other third parties, and how its business has changed over time. For example, the judge notes Google adjusted ad pricing to maintain a specific growth target, and increased it incrementally to mask it in the typical fluctuations of ad costs. He also cites a finding that “thirteen months of user data acquired by Google is equivalent to over 17 years of data on Bing” in informing the quality of search results. Meanwhile, Google pays Apple a redacted amount through its revenue sharing agreement for default placement in Safari, and it pays for searches performed through Chrome on Apple devices as well. There is a lot more in here, and I fully intend on re-reading the opinion with a bunch of questions I have in mind.

Google really does have great search results a lot of the time, even though it has stumbled in recent years. DuckDuckGo is my default but I find myself often turning to Google for local results, very old results, and news. (DuckDuckGo is powered by Bing, which prioritizes MSN-syndicated versions of articles that I do not want.) Google has not fallen into the same trap as Bing by wholly cluttering the results page. Microsoft still has no taste.

But two things can be true: Google can be the best search engine for most people, most of the time, because it is very good; and, also, Google can have abused its market-leading position to avoid competition and maintain its advertising revenue. Those are not inconsistent with each other. In fact, per the judge’s citation of how long it would take for Bing to amass the same information about user activity as Google does in a year, it is fully possible its quality and its dominance are related, something the judge nods toward. In fact, Google’s position is now so entrenched “it would not lose search revenue if were to significantly reduce the quality of its search product”.

Notably, Mehta did not sanction Google for failing to preserve evidence in the case, writing:

On the request for sanctions, the court declines to impose them. Not because Google’s failure to preserve chat messages might not warrant them. But because the sanctions Plaintiffs request do not move the needle on the court’s assessment of Google’s liability. […]

In cases where the judge found evidence of monopolistic and abusive behaviour, the lack of supporting text messages and other communications would not have made a difference; this is also true, the judge says, for his finding of a lack of anticompetitive behaviour in SA360.

⌥ Permalink

The Asahi Shimbun, in a non-bylined report:

The new law designates companies that are influential in four areas: smartphone operating systems, app stores, web browsers and search engines.

The new law will prohibit companies from giving preferential treatment for the operator’s own payment system and from preventing third-party companies from launching new application stores.

[…]

The new legislation sets out exceptional rules in cases to protect security, privacy and youth users.

Penalties are 20–30% of Japanese revenue. Japan is one of very few countries in the world where the iPhone’s market share exceeds that of Android phones. I am interested to know if Apple keeps its policies for developers consistent between the E.U. and Japan, or if they will diverge.

⌥ Permalink

If you had just been looking at the headlines from major research organizations, you would see a lack of confidence from the public in big business, technology companies included. For years, poll after poll from around the world has found high levels of distrust in their influence, handling of private data, and new developments.

If these corporations were at all worried about this, they are not much showing it in their products — particularly the A.I. stuff they have been shipping. There has been little attempt at abating last year’s trust crisis. Google decided to launch overconfident summaries for a variety of search queries. Far from helping to sift through all that has ever been published on the web to mash together a representative summary, it was instead an embarrassing mess that made the company look ill prepared for the concept of satire. Microsoft announced a product which will record and interpret everything you do and see on your computer, but as a good thing.

Can any of them see how this looks? If not — if they really are that unaware — why should we turn to them to fill gaps and needs in society? I certainly would not wish to indulge businesses which see themselves as entirely separate from the world.

It is hard to imagine they do not, though. Sundar Pichai, in an interview with Nilay Patel, recognised there were circumstances in which an A.I. summary would be inappropriate, and cautioned that the company still considers it a work in progress. Yet Google still turned it on by default in the U.S. with plans to expand worldwide this year.

Microsoft has responded to criticism by promising Recall will now be a feature users must opt into, rather than something they must turn off after updating Windows. The company also says there are more security protections for Recall data than originally promised but, based on its track record, maybe do not get too excited yet.

These product introductions all look like hubris. Arrogance, really — recognition of the significant power these corporations wield and the lack of competition they face. Google can poison its search engine because where else are most people going to go? How many people would turn off Recall, something which requires foreknowledge of its existence, under Microsoft’s original rollout strategy?

It is more or less an admission they are all comfortable gambling with their customers’ trust to further the perception they are at the forefront of the new hotness.

None of this is a judgement on the usefulness of these features or their social impact. I remain perplexed by the combination of a crisis of trust in new technologies, and the unwillingness of the companies responsible to engage with the public. There seems to be little attempt at persuasion. Instead, we are told to get on board because this rocket ship is taking off with or without us. Concerned? Too bad: the rocket ship is shaped like a giant middle finger.

What I hope we see Monday from Apple — a company which has portrayed itself as more careful and practical than many of its contemporaries — is a recognition of how this feels from outside the industry. Expect “A.I.” to be repeated in the presentation until you are sick of those two letters; investors are going to eat it up. When normal people update their phones in September, though, they should not feel like they are being bullied into accepting our A.I. future.

People need to be given time to adjust and learn. If the polls are representative, very few people trust giant corporations to get this right — understandably — yet these tech companies seem to believe we are as enthusiastic about every change they make as they are. Sorry, we are not, no matter how big a smile a company representative is wearing when they talk about it. Investors may not be patient but many of the rest of us need time.