MacOpinion: October 5, 1999 - Apple’s Abuse of Power [UPDATED]

| The Flashback Files

October 5, 1999. Apple was full of a sense of power and had begun to throw its weight around. Corporations do that. But what really got me upset was the target of the power play: a 16 year old Canadian boy. Apple crushed him and his family over a domain name, appleimac.com, that the boy had legally registered.

Context: back in those days, Domain Names were issued on a first come, first serve basis. So lots savvy people jumped in and registered names like ford.com. They came to be called Domain Squatters and, in time, the courts decided that the principal trademark holder had more right to the domain name, even if years tardy, than the first entity to register the domain. At issue was whether this Canadian boy was an innocent victim or, as Apple saw it, an evil Domain Squatter, out to extort big money from Apple.

What’s even more sad is that in the 11 years since, Apple has never really used the fruits of its powerplay. Here’s how I called it at MacOpinion.com back then, in my column: Utopia Planitia. [I’ll admit to being a bit long-winded back then, so the article has been edited. Author comments are in square brackets.  Broken URL’s have not been removed.]

Utopia Planitia

“The Limits of Power”

“Morality is your agreement with yourself to abide by your own rules..”

— Jubal Harshaw Stranger in a Strange Land

“Nearly all men can stand adversity, but if you want to test a man’s character, give him power.”

— Abraham Lincoln

  • Increasingly, Apple is obtaining wealth and power.
  • Increasingly, Apple is throwing its weight around.
  • Increasingly, Apple is acting like Microsoft.

The Discipline of Power

There is a human philosophy, derived from every major religion, that there are implied limits on power. The very concept of good versus evil has, at its basis, the abuse of power.

And yet when I look around and observe my work place and acquaintances both personally and from afar, I witness serious resistance to the idea that personal power should have limits.

My guess is that that tendency is derived from our movie and television culture of wish fulfillment. In many cases, we are restricted and controlled by the law, police, or an employer. To find a catharsis for this frustration, we go home and watch the good guys shoot it out on TV or play video games.

Of course, the heros are imbued with good motives; nevertheless, they carry weapons, and it’s the writer’s job to make quite sure that the good guys have the proper motives for using those weapons. The target can be either a serial killer/rapist who must be gunned down, or it’s a race of nasty aliens who like to eat human children for breakfast.

Consequently, when human beings manage to come upon a moderate amount of personal power, they cast themselves into the role of the good guy and proceed to exercise that power.

The problem is that it would be incredibly boring in the entertainment business to lay out realistic scenarios. So television and the movies have become quite adept and generating sympathetic characters who wield great power. The lonely, widower hero (perhaps Mel Gibson) gets up in the morning, pets the dog, makes breakfast for his precious blonde 5 year-old daughter, drops her off at school, then proceeds to blow away the bad guys with hundreds of 9 mm rounds. In real-life, a police officer may have a 20 year career and never fire a gun.

The effect, then, is that many people, raised on television, never having been trained in law enforcement or having served in the military, do not understand the basic principles of power associated with authority:

  • Rule #1. Authority implies responsibility.
  • Rule #2. Authority implies self-discipline.
  • Rule #3. Authority can be delegated, responsibility cannot. (Most people get this one wrong and try to delegate the responsibility while retaining authority.)
  • Rule #4. Authority is granted solely for the good of those tendered to, not the one granted the authority. [In 2010, this point is completely missed.]

Let’s Look at Apple

In recent times, when it appeared that Apple Computer was going to go under, the company was too busy fighting off The Angel of Death. Today, Apple is prosperous, healthy, and growing again. In order to wage new wars and preserve their fighting chances, Apple executives are now faced with the prospect of exercising much more power than when the company was virtually helpless in the market place. In the process of exercising that power, the following events have occurred.

Case #1. Apple, having blundered in not registering the desired domain names for the iMac soon enough, tries to recover by accusing a Canadian teenager, Abdul Traya, of infringing on their trademark. The domain name appleimac.com was lawfully registered by the Canadian teenager, but Apple wanted it, so they took it by force, that is, without a court judgment.

Case #2. Apple makes some changes to the G3 ROM code, claiming that this is a beneficial fix and encourages us to install the upgrade. Amongst all the things it does, it also secretly looks for the presence of a G4 CPU and will refuse to boot the computer if it finds one — according to companies that make processor upgrades. This story broke in June, 1999.

Case #3. [Deleted for brevity.]

Power Analysis

Now, lets examine the three cases above in terms of the proper exercise of power.

Case #1. First of all, the outcome can be found here. The net result is that even with the help of his own lawyer, the 16 year old had to relent under strong legal pressure, but never went to court to protect his rights. Instead, young Mr. Traya, gave up the appleimac.com name for $800 in legal fees paid and $120 in cash because, he said, “It’s too much of a hassle. I had better things to do.”

This sounds to me like a young man who was put under so much pressure that he didn’t know how to respond, let alone carry on a fight. Sixteen year-old, boys, even with legal representation, seldom do.

Now when a corporation fights another corporation for its rights, it will likely see the opposition in court and let the legal system sort it out. But when a large, powerful company engages a 16 year old boy, even with legal representation, they can count on exhausting the time, patience and resources of a child and his family. As a result, Apple had a responsibility to exercise its power wisely when seeking to take from a minor that which he legally obtained. But Apple didn’t do that. Instead of being gracious about their own lack of foresight and offering to work amicably with the boy, Apple apparently perceived that this fellow was out to soak them for money and infringe on their trademark rights. After all, it’s always easier to justify your aggressive actions when you rationalize that the opponent is somehow scurrilous.

Apple’s failure to let the courts rule (and protect) in the case of Mr. Traya and the unwillingness to approach the issue with good humor and a light hand appear to me to be a failure to exercise the responsible use of great power.

Case #2. In this case, Apple appears, for reasons that are not clear, to have made changes to the G3 ROM code, that prevent the upgrade to a G4 processor. The fact is that Apple has made no statement on the issue, and only the effects of the change have been observed by those doing system testing. We don’t know Apple’s motivations or the constraints they may be under. But the observed fact remains that Apple published code with a hidden function that deprives the owner of the machine of control over that machine. This sets a very bad precedent because, as computers become more and more powerful and are embedded in intelligent consumer devices, the customers are denied confidence that they are in total control of the unit. In this case, authority and control over the item sold is secretly retained by the manufacturer in a way that could injure the buyer in some fashion, unforeseen.

Consider, for example, how a continuation of this behavior could be even more insidious. Some day, you could ask your household robot to go to the Safeway to get some Yoplait yogurt. The robot returns, instead, with Dannon yogurt because Dannon paid the robot manufacturer to insert special shopping software. Unchecked, this could come to pass based on the prevailing business ethics of the 1990s. [I ended up writing a science fiction story about this.]

Somewhere, sometime, one of those senior engineers has to say, “This crosses the line. I won’t do it.” And his or her boss has to agree right up the chain. This is the exercise of discipline when wielding great power.

Final Thoughts

We have looked at several cases here where Apple Computer has confronted small organizations, individuals, and customers with great power. They have taken actions which, while preserving their own interests, on the surface, appear to be those kinds of things that we criticize Microsoft for: throwing their weight around and getting their way by the use of undisciplined power.

I have asked Apple Computer, via Katie Cotton in public relations, several times about whether Apple has generated a corporate ethics document, a self-imposed doctrine that dictates how Apple will establish and adhere to business ethics. Ms. Cotton has failed to respond. [Author note: later when I worked for Apple, I searched for such a document - to no avail.]

As Lord Acton said, “Power tends to corrupt, and absolute power corrupts absolutely.” Apple now has some new found power and wealth. The cases cited above reveal how Apple is using that power. It is not a welcome sight.

PostScript (12 April 2010)

I got an e-mail from Mr. Abdul Traya a few days ago.  He is now working at WestNet Wireless, a company he founded near Calgary, Alberta — a CDMA-based mobile operator. He wrote: “First I would like to congratulate you for another decade of great reporting at the Mac Observer.

“Your writing recently came to my attention after someone contacted me in regards to this article, a matter that occurred nearly 12 years go., which never seems it will be laid to rest. However a few statements are of concern to me, such as “Apple crushed him and his family” Apple never crushed either of us in the way sources portrayed it. [My own source was Reuters. -JM]

“Also in regards to;  ‘Instead, young Mr. Traya, gave up the appleimac.com name for $800 in legal fees paid and $120 in cash because, he said, ‘It’s too much of a hassle. I had better things to do.’ ‘.” That statement isn’t necessarily true, as I was paid an undisclosed sum which was more than fair — also neither parties have disclosed the sum.

“If you may kindly revise your article to reflect my input for more accuracy, it would be of great gratitude.”

Sincerely, 

Abdul Traya

It just goes to show that the reporting of the day, even when extensive, is still tempered and deepened by the revelations in time, sometimes years later, of the principles involved. A good lesson for us all.

 

Comments

Tiger

Thoughtful and intuitive. And although it uses examples, it’s more about what could happen and less about what has.

And we all have to be mindful because corporations are not living, they are made up of people. Flawed people who make decisions and mistakes. Let’s hope the right folks in the corporations realize that their actions have consequences and that having ethics is one of the things that defines us as a higher life form. We HAVE the ability to choose. We don’t just act out of instinct.

daemon

[Author note: later when I worked for Apple, I searched for such a document - to no avail.]

Apple doesn’t have a corporate ethics document? Wow! Clark gas station had an ethics policy in 1998…. No wonder Apple has no compunction against screwing over everyone that buys an iPhone.

jsbow-long

Why say this now? How is it relevant?

John Martellaro

We decided to go back in time, from time to time, to see what was going on a decade ago with Apple. Both in the author’s head and with customers. Think of it as a George Santayana type experience.

A reader asked me about the AppleiMac.com incident awhile back, so I decided to start with that one.

Bosco (Brad Hutchings)

Why say this now? How is it relevant?

If you’re like me and you brought a $240/month family plan from Sprint to AT&T and picked up two iPhones in the process, maybe you’d like to know why you can’t get a swimsuit catalog or a WiFi finder on your iPhone. That sure didn’t seem like it would be an issue 6 months ago.

gslusher

“The domain name appleimac.com was lawfully registered by the Canadian teenager, but Apple wanted it, so they took it by force, that is, without a court judgment.”

Apple was almost surely within its rights. See:

http://www.chillingeffects.org/domain/

http://www.chillingeffects.org/domain/faq.cgi

BTW, the link in the section quoted doesn’t work any more.

John Martellaro

“Apple was almost surely within its rights.”

According to my preamble, by today’s standards, yes.  But the method, as I described it, remains questionable.

As for broken links, I left them in as a testament to the ephemeral nature of historical information on the Internet. (Also explained in the preamble.)

DualG5

In a perfect world (which doesn’t exist), people as well as corporations would always do the right thing.  There would be no question of ethics or morality.  Another poster hit on this about corporations being made up of people.  This is exactly why they need a statement of ethics and business practices.  This document would be the standard against which all decisions should and would be measured. 

Do not the recent events on Wall Street teach us that there are companies who either have no such document or have one, but have chosen to ignore it?  It’s those companies that should have been allowed to die.  Might does NOT make right.

I have been a long-time Mac user and Apple evangelist because I love their product and believe it is superior to anything else on the market.  But when it comes to supporting Apple versus Microsoft, it’s really just the lesser of two evils.  Apple has a higher rating of customer satisfaction than just about any other technology company, but the incidents mentioned in this article prove that it is still a corporation driven by the bottom line.

Chandra Coomar

Perhaps it is just Apple’s way. They don’t believe in making statements for the sake of making statements. Many companies have Mission statements and Ethics statements that they then spend a lot of time and money ignoring or outright overturning. Google and Don’t be evil comes to mind. I’m sure enron had an Ethics doc the size of the Bible.
I mean this in the same sense that Apple now believes in actions rather than words. It doesn’t share Micorsoft’s or HP’s penchant for showing off vapourware ideas that will never come to fruition or, if they do, are abysmal failures in the marketplace. What is the point? Why is there such manic chatterati hype over Apple’s mythical future products? Why does nothing similar exist for any player in the Wintel space? I mean as far as gossip and idle speculation is concerned, the Wintel market is a yawn a minute. I’ll agree that the chatterati go much too far with Apple hype, but the worst offenders are experienced journalists, not the fanboys.
Back in 99, Apple was still a recovering failure. The anecdote you relate is probably symptomatic of the time. In more recent news, Apple is a good citizen, fair pricing, eco credentials, strong employer, good to customers and, most significantly perhaps, has championed consumer rights by serially and systematically removing the gouging tendencies of all media channels. Buy only what you want and pay no more than it is worth and let us allow the market to set the worth of everything that is on offer. That’s how the stock market works and over time it does it well. Why not consumer markets? Apple set that ball rolling and it is wreaking havoc among all exploiters.
Show is better than tell.
Walk is better than talk.
Apple is not what it was ten years ago and some stories, like this one, should remain in the past where they belong and where they are in a more accurate context.
Why is it necessary to bleat like a baby about swimsuits and WiFi finders when there are thieves in the major banks and the Fed who are stealing your children’s future financial stability? And that is but one example of mind-boggling scales of corporate crime taking place daily in America. Who bleats about cable companies peddling mind-numbing trash to dumb down Americans and charging Shylock prices for the privilege? Who bleats about the hundreds of thousands of Americans who die unnecessarily or before their time each year because of insurance company profit targets?
Ohhhh yesss! It’s swimsuits and Wi-Fi finders goddammit!
And the loonies have taken over the asylum.
What else is new?
TouCh

vasic

as I was paid an undisclosed sum which was more than fair ? also neither parties have disclosed the sum.

As the (then) teen wrote himself: in the end, he was compensated quite well for the whole ordeal. So, even if the initial reaction was arguably improper, the final resolution seems to be perfectly acceptable, and I doubt anyone here would refuse such a resolution.

DualG5

Perhaps it is just Apple?s way. They don?t believe in making statements for the sake of making statements. Many companies have Mission statements and Ethics statements that they then spend a lot of time and money ignoring or outright overturning. Google and Don?t be evil comes to mind. I?m sure enron had an Ethics doc the size of the Bible.

When a company publishes a code of ethics, it makes itself accountable to itself, its shareholders and public scrutiny.  By making promises or predictions known to others, you put yourself in a position of being judged.  For example, if a sprinter thinks only to himself that he can win the gold for his country in the 100 meter dash, but doesn’t, he is not judged as harshly as the sprinter who told everyone before the race that he knew he was going to win, but comes in 4th.  In as sense, there was no trash talk to back up. 

When a corporation publishes a code of ethics by which they say they will conduct business, they put themselves out there for harsher criticism than those who don’t.  Because they’ve “talked the trash” and when they don’t come through, they are pounced on like a lion on a baby gazelle.

Remember that as a consumer we vote with our wallets.  If a company gets a bad rap in the court of public opinion, then that company’s bottom line will suffer.

Why do you think Microsoft’s market share has been losing ground?  People are tired of them not fulfilling their promises.  Who wants to deal with Microsoft when Apple is making machines that cross the OS Divide?

By the way, I could be wrong but didn’t most of Enron’s execs get indicted?  They may have ignored their code of ethics, but it came back to bite them.

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