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Apple owns every mistake Goldman Sachs makes with its card

Apple owns every mistake Goldman Sachs makes with its card


Apple isn’t a bank, but its brand is tied to one now

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One of the most important stories over the weekend was the news that Apple’s credit card is being investigated for discriminating against women. This story has almost as many layers as the apparently discriminatory algorithm Apple and Goldman Sachs use to determine credit limits.

But before I comment on any of this, I want to point you to the blog post by Jamie Heinemeier Hansson about the whole ordeal. She is the person who was denied the full measure of what her credit limit should have been because of Apple and Goldman Sachs’ black-box algorithm. You should read it in full, even though I’m about to quote a bit below, because it is important, level-headed, and blisteringly accurate. She lays out the stakes of this whole thing quite clearly:

It matters for the woman struggling to start a business in a world that still seems to think women can’t be as successful or creditworthy as men. It matters to the wife trying to get out of an abusive relationship. It matters to minorities harmed by institutional biases. It matters to so many. And so it matters to me.

This is the second time in as many months that Apple has found itself on the wrong side of a social justice issue. As it (at least initially) was with the app rejections in Hong Kong, the company has remained stubbornly silent on this issue so far.

What we do have, however, is a couple of tweets from Goldman Sachs, which operates the banking side of the Apple Card. Neither is an apology, which you know both from the defensive nature of the statements and because they’re not hurriedly tweeted screencaps of the iPhone Notes app. Here’s the most recent one, as of last night:

Of course, you wouldn’t expect Goldman Sachs to apologize, because that could be used against it in the upcoming lawsuit. You also wouldn’t expect Goldman Sachs to apologize because it’s Goldman Effing Sachs, one of the architects of the housing crisis a decade ago that had to pay a $5 billion settlement and admit to a series of facts about how it misled investors.

You know, the company that Apple partnered with to launch the Apple Card.

Apple is trying to have all the benefits of a consumer and privacy-friendly credit card without any of the hassles that come along with it. Take a look at Apple’s promotional page for Apple Card: right now it’s led by the tagline “Created by Apple, not a bank.” I’m sure it was, in the same way that Apple’s products are “Designed in California” but assembled in China — though at least then Apple oversees the manufacturing and tries to guarantee a basic level of human rights.

I know the line of rhetoric I’m pursuing here is a little overblown and somewhat unfair. What did I expect? Did I expect Apple to try to create a pure-as-the-driven-snow bank of its own to back its credit card? Even the mighty Apple has limits, and consumer financial services are definitely outside its bailiwick. And if it was going to partner with a big bank, there aren’t really any that are any cleaner than another. Goldman Sachs, at least, agreed to the privacy protections and less-fine-print Apple demanded.

And yet: the friction between Apple’s (justified!) image as a privacy-protecting company and Goldman Sachs’ less-than-stellar reputation comes up again and again. In light of the current debate, I took a look at Apple’s own support page that explains the policies behind credit approvals and limits.

The entire thing mirrors the first line: “Goldman Sachs uses your credit score, your credit report, and the income you report on your application when reviewing your Apple Card application.” In every sentence thereafter, Apple is distancing itself from any responsibility for the decisions Goldman Sachs is making in its name.

And that’s the heart of it: it’s not the Apple Card, it’s the Goldman Sachs card with an Apple interface and an Apple layer of privacy protections.

With almost every other product, Apple famously wants to control its entire supply chain, from the silicon to the software. It’s known as the Cook Doctrine, and Tim Cook laid it out stridently in an investor call a decade ago before he was CEO, when he was asked how Apple would operate without Steve Jobs running the day-to-day (emphasis mine):

We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.

With the Apple Card, Apple does not own the “primary technologies” that power a credit card. It doesn’t have any control over whatever black-box algorithms Goldman Sachs is using, and has little to do with the actual operation of the credit and payment systems after that. It’s Goldman Sachs.

Apple has no control, but nevertheless Apple shares the responsibility. Not just because it’s Apple’s name on the card, but because Apple chose to make this thing in the first place.

Apple didn’t need to make a credit card. The fact that it did speaks to the company’s desire to diversify its revenue as part of the omnipresent shift to services. And as Nilay Patel has asked over and over again: “Will Apple compromise the user experience of the iPhone to upsell its own services?”

I’ve long said that this services push is a threat to Apple’s reputation. Except for people who are trying to MinMax their points, nobody really loves their credit card company. Apple is a credit card company now. Nobody loves their cable company. Apple is in the business of selling TV shows and acting as a middle man to other TV channels.

This is the part where I exhort Apple to take a stronger hand in opening up the black box of Goldman Sachs’ credit card algorithms and take responsibility for their outputs. But I don’t think it’s realistic to expect Apple to do that.

As it insists on the Apple Card promo page, Apple is not a bank. It just chose to tie its brand to one.


+ Dell XPS 13 2-in-1 review: the XPS 13 to get

I grabbed this laptop first chance I got and clacked away at it and it is indeed clacky. But I would place it at about the same level as Apple’s latest generation butterfly keyboards, which is to say better than you’d expect but still clacky. I think it’s not a reason to avoid this computer, which otherwise seems top notch.

The third change is an all-new, low-profile keyboard that stretches all the way to the left and right of the computer’s lower half. The keys are larger and more comfortable to type on than the standard XPS 13, and they make more efficient use of the XPS’s compact keyboard deck. Dell says this keyboard design is 24 percent thinner than a standard keyboard. There’s also a fingerprint scanner built into the power button just above the backspace key.
But this keyboard, much like the low-profile butterfly keyboards on MacBooks, will be polarizing.

+ Amazon Fire HD 10 (2019) review: you get what you pay for

Chaim Gartenberg points out the only truly compelling feature on Amazon’s Fire HD tablets — and asks the essential question about the whole idea of the “inexpensive Android tablet.”

Compared to an iPad, the experience isn’t even close. Apple’s entry-level tablet is dramatically faster, features a far better selection of apps, and doesn’t feel like a toy. The one big advantage Amazon has is still its best-in-class parental control and multi-user support. [...]
For what you’re paying, and the almost total lack of meaningful competition at the price point, it’s easy to call the Fire HD 10 the best $150 tablet around. But in a world where Apple’s entry-level iPad is better and cheaper than ever before, the question starts to become: at what price point will Apple’s tablet cost before it’s no longer worth dealing with the Fire HD 10’s limitations?

+ Vergecast: Microsoft’s big hardware bets this fall were a mixed bag

We always have to leave so much out of the reviews so they’re not a million words long — and it’s even more painful for the videos. I have a lot of thoughts about the ways to tell an engaging narrative about a product that’s accurate and not too bogged down in details, but I won’t bore you with them.

But yes: having the opportunity to spend an hour with Tom Warren and Dan Seifert to talk about all the stuff we have been talking about behind the scenes was a blast. I might want to do more of these, haven’t decided. If you enjoy this format, please do let me know.

Sometimes tech is stranger than fiction

+ WeWork reportedly wants to hire T-Mobile’s brash CEO John Legere as its new boss

I had to restrain myself from posting photos of Legere in his 2012 very-expensive-suit Global Crossing executive days. I think Legere is best understood as a ruthless telecom executive who has been remarkably effective and remarkably struck on a great PR and marketing strategy for T-Mobile, and for whatever reason I think old photos of him before his T-Mobile transformation are instructive. But then I imagine people posting 7-year-old photos of me to make a point and I realize it’s a bit of a cheap shot.

Nilay Patel tweeted some good analysis, though:

1. SoftBank invests in Sprint, installs Marcelo Claure as CEO
2. Marcelo’s Sprint rescue plan is selling to T-Mobile and John Legere
3. SoftBank invests in WeWork, installs Marcelo as exec chairman
4. Marcelo’s rescue plan is... John Legere

+ Amazon is opening its own grocery store in 2020: Alexa, email Jeff Bezos the gif of Ryan Reynolds saying “Buy Why?”

+ Google plans to give slow websites a new badge of shame in Chrome

I am SO SURE that Google’s example warning image just happens to be a lowercase “e” inside a blue square. A small blue “e” is totally common and not at all associated with a competing browser, right?

Even big tech is big stupid at handling big data

+ Google may be secretly gathering millions of personal health records with alleged ‘Project Nightingale’

Mary Beth Griggs has helpfully explained all of the details we know so far here (at least as of me writing this newsletter). It is just dumb dumb dumb for Google to be within a million miles of health data without copious transparency about what it’s doing and announcements ahead of time.

Part of me wonders if this would have been a nonstory if Google had just announced this in advance. Google’s blog post last night was a sad attempt to retcon that announcement into existence. Even if you give Google the benefit of the doubt on its intentions and its data policies (and I grant that’s difficult), it’s still, as I just said, dumb dumb dumb.

Plus— as Mary Beth points out — Google is already facing a lawsuit about inappropriately accessing medical data. Can’t help but wonder if the FTC is going to take a much more skeptical view of the proposed Fitbit acquisition, and I wouldn’t blame them if they did.

+ SMS provider said 168,000 Valentine’s texts were delayed — now it says the number is higher

I know this isn’t much of a silver lining, but I am happy that this event pierced the veil of carrier interconnects. Getting your texts and your phone calls routed between carriers is hella complicated and companies like Syniverse are a big part of it. You may know that I have been tracking RCS — the successor to SMS — for some time. Part of that story is the complicated way that RCS servers (Google’s software for this is called Jibe) are supposed to work together. It is all very complicated to explain and kind of a snoozer, but I think the RCS system is more elegant than what’s happening with SMS right now, from a routing perspective. too bad we won’t know for sure for years, given the pace of adoption.

Syniverse, the company in question, originally stated that 168,149 messages were delayed. It now says that the number was based on “preliminary data” and that further review shows the message total “is higher than initially reported.”

More from The Verge

+ Queer Eye’s Bobby Berk on designing for Japanese homes, TikTok, and the new iPhones

Great, fun interview from Dami Lee. Super happy she asked the question about my favorite Queer Eye memes, super don’t believe Berk’s answer.

Lee: Okay, one last question. What do you think of the memes online that are like, “Antoni: I made a salad. Karamo: believe in yourself. Bobby: I built a house”?
Berk: I’ve seen them. Our jobs are all equally important. Some are more labor-intensive than others. But yeah, all equally important.

+ Apple reportedly plans 2022 release for first AR headset, followed by AR glasses in 2023

I will admit that I’m baffled that Apple thinks it’s a good idea to release a standard VR headset with cameras on the outside as an AR headset in 2022. It just seems like patently a thing most consumers don’t want.

And I very obviously have to disclose that my wife works for Oculus, which makes the Quest headset that’s explicitly mentioned here as an analog of what Apple is reportedly working on.

+ Uber CEO calls Saudi murder of journalist a ‘mistake,’ then quickly backtracks and I can’t put it better than Andrew Hawkins and Sean O’Kane have here: Tech’s transportation companies keep bending the knee to Saudi Arabia