Core principles – Apple chief talks privacy and the need for fair tax

Apple chief executive Tim Cook believes that GDPR “doesn’t go far enough” to protect privacy and says his firm will not compromise on its privacy and security features, regardless of pressure to do so.

In an exclusive interview with the Irish Independent, Mr Cook also said that relations with the Irish Government are “really good” and that Apple expects to be in Cork for the “next 40 years”.

Mr Cook, who was in Ireland to receive an IDA award and to visit developers and Apple’s Cork staff, said that he wants privacy regulators to go beyond Europe’s GDPR standards.

“This is an area where regulation is needed,” he said. “GDPR, I think, was a really great first step. And, largely, it’s become adopted throughout the world, either because companies couldn’t do it two different ways, or because other countries are moving along the same path.

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“But GDPR in itself is not sufficient. The risk to our privacy, which we view as a fundamental human right, has never been greater. I do think it’s an area that companies broadly haven’t shown that they will self-police. I think the EU is a great place … where it can ignite and start.”

The company is coming under more sustained pressure to provide ‘backdoors’ into its secure iPhone encryption as police forces look to suspects’ digital devices to help investigate offences.

To date, Apple has taken a stiff line on the issue, rebutting requests from UK and – this month – US authorities for access into its security systems. This has drawn the ire of US president Donald Trump, who tweeted his discontent that Apple would not help the FBI break into one of its own iPhones in a terrorist case.

Asked whether there is any room for nuance or a lower standard of privacy should authorities seek it, Mr Cook said that there was not. “No,” he said.

“I think that everybody has seen some of what’s at stake over the last several years in some form. And perhaps it’s not well understood by everyone about how important privacy is. But our view is that it’s the base at which many other things exist.

“It’s the basis for freedom of expression, as just one example. So I think society is waking up to this and I don’t think people in most countries in the world would be satisfied with the continuation of where we are today.”

Asked about current relations with the Irish Government, Mr Cook described them as positive.

“I feel really good about the relationship, not only with the Government, but with the people,” he said. “We’ve been here now 40 years. And like every good relationship, there’s been some ups and downs for both parties. But we came here at a time of very high unemployment in Cork.

“Now, we’ve grown to a 6,000-plus employee base that has 100 nationalities in it. I look forward to being here the next 40 years.”

Mr Cook also spoke about Irish iOS app developers which, he said, have earned close to €1bn from selling their apps to customers around the world and have been central in “creating 17,000 app economy jobs” in Ireland.

“The developer population here is really taking off and it’s great to see it,” he said.

But asked whether phone and tablet apps were the inevitable endgame for computing, he struck a different note to the “post-PC” enthusiasm articulated five years ago at the launch of the iPad Pro.

“I think what I’ve come to realise is that there is room for a number of devices for people,” he said. “I don’t see a day that PCs are gone. I don’t see that. I think there’s too many things about it that are great.

“I mean, you can look at our numbers, we sell a lot more iPads. But increasingly, I view it as a computing device and you just decide which one or ones you want. Some people will use one of them. Some people will use two. Some even more than two. And so I think it’s very much an individual preference.”

Apple has recently seen its value soar to $1.4trn (€1.2trn), partly thanks to the success of its new products, such as the Apple Watch and AirPods.

Ireland is one of the EU countries with the highest iPhone share.

Cork’s Hollyhill facility is a global transport logistics hub for Apple. When a new iPhone is launched, Cork’s managers become responsible for overseeing thousands of delivery trucks, flights and other practical arrangements to make sure the devices get to shops and depots.

The facility is also Apple’s only self-operated manufacturing site in the world, building iMacs to order. There are almost 35,000 configurations possible.

Apple has a relatively high percentage of remote workers in Ireland, with around 25pc given the option to work from home.

After receiving the IDA’s award from Taoiseach Leo Varadkar, Mr Cook held a public question-and-answer session with IDA chief executive Martin Shanahan, where he spoke about the €13bn European Commission tax case and having doubted whether Apple would keep its Cork base open in 1998, when the company was in financial trouble.

“It’s very complex to know how to tax a multinational,” he said. “It’s not like a small business that does all of their stuff generally in one country.

“A multinational might manufacture in one country, service in another, sell in another and do research and development in another. And so somebody has to decide how to apportion the profits and, therefore, the tax payments.”

Mr Cook told Mr Shanahan that it was a “really reasonable subject for people to debate” as a policy issue.

“I think reasonable people can have different points of view,” he said. “I think the place for that to happen is at a worldwide level, because you can bet that each country is going to have a different point of view. Companies shouldn’t have anything to do with this, they should just follow the law. And so the OECD, I think, is the place for this.”

Mr Cook said that Apple “desperately wants” it to be fair.

“This is where the issue comes in the commission. We believe that law should not be retrofitted, that the law is the law and the law can change going forward but it shouldn’t change going backwards.

“That is at the heart of the case if you just make it very simple. It is before the court now and we have great faith in the justice system.”

He went on to say that he is “optimistic” that the OECD can create a clearer tax code.

“I think they have to. This is never going to be one that everybody is going to say ‘yeah, great’, because everybody would like a little bit more. But I think that they [the OECD] are the place for it to happen. And I think that, logically, everybody knows it needs to be rehauled. I would be the last person that would say that the current system is a perfect system.”

Mr Cook repeated Apple’s assertion that it is the “largest taxpayer in the world”.

“We do so willingly, not grudgingly,” he said.

“The [European] Commission has a different perspective on who we should pay.

“And the way that we look at it, and I believe it’s the way Ireland looks at it as well, is that we have paid them per the law. We followed the law and paid them accordingly.”

The European tax case is expected to last several years.

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