Apple is keeping its promise to customers by fighting to protect their privacy, while Volkswagen failed its fans by cheating on emissions standards.
These days we see far too many examples of people and companies that seem to have no core values beyond expediency. They’ll say and do whatever they need to achieve a goal, whether that’s increasing the bottom line or racking up enough delegates to secure a presidential nomination.
We’re still in the early stages of what is likely to be a long and potentially bitter election season, so it’s probably best to avoid the political arena, and its unrealistic campaign promises and look to the corporate world instead to see how two different companies dealt with their implied promises to consumers.
Starting in the 1960s, Volkswagen built an iconic persona that resonated with millions of Americans. Those who didn’t live through that period may have seen Don Draper dissecting some of those quirky, early ads on Mad Men or in old issues of Life magazine. The company brought us German engineering, but in a fun way with the Beetle and the VW Bus, arguably the first mini-van and a favorite of hippies everywhere. (Full Disclosure: I drove ’65 VW Bus with a mural on the ceiling and curtains on the windows when I was in college. And a Beetle after that.)
Then the company, which could claim 70 percent of the U.S. passenger car diesel market, decided it would be a good idea to cheat on emissions testing. Since VW could not legitimately make the case that diesel was a clean alternative to hybrids and fully electric cars, they decided to get around that sticky little detail by installing deceptive software on 11 million cars worldwide (more than 500,000 of them in the U.S.) that made the vehicles fully compliant during regulatory agency testing, but switched off during regular operation, which while providing better mileage and more power also had the potential to emit nitrogen oxide, a pollutant linked to lung cancer, up to 40 times greater than the federal limit.
I’m not sure what the company hoped to gain by this deception, but the losses have been and will continue to be devastating. Technically, fines in the U.S. could be as high as $37,500 per affected vehicle, or as much as $18 billion. There’s also the potential for criminal charges to be brought in Germany, the U.S., South Korea and other affected countries.
For a long time to come, that’s what Volkswagen will be remembered for. Not Herbie the Love Bug. The company may have gotten over on the regulators in the short term, but it lied to its customers and lost their trust. VW owners are a notoriously loyal group. There are lots of people who have at one time or another time owned virtually every Volkswagen model available in the U.S. It wasn’t just that the cars were affordable and dependable. The cars had a certain brand personality that people related to and they liked what it said about themselves.
Apple is another company with great technology and an iconic brand personality. It had great commercials with John Hodgman and Justin Long representing the difference between Macs and PCs. The company invented the iPod, the iPad and the iPhone.
Apple has developed unshakeable (so far) customer loyalty because not only do they make a great product, but because their customers trust them. Millions of people around the world bought iPhones and iPads, and use them to conduct their most intimate personal and financial business. One of the reasons they feel comfortable doing so is because Apple has assured them that whatever information their devices contained would be secure.
And that very promise is in essence what Apple is being asked to betray. The case involving the phone of the San Bernardino shooters is the one that has gotten the most coverage but it’s not the only one. There are more than a dozen other cases pending in various federal courtrooms involving where law enforcement seeks information from phones of people charged with non-terror related crimes including drug trafficking and pornography.
This is undoubtedly a complicated issue with questions about privacy, personal and national security, the rights and obligations of corporations. It’s a matter that’s important enough to be debated publicly and ideally resolved by our elected representatives, not secret court decisions.
We’re living in the 21st Century, and minus the flying cars and robotic maids, enjoying much of what The Jetsons predicted 50 years ago (flat screen 3D television, videoconferencing, people-moving conveyors) while the government is interpreting a law, the All Writs Act of 1789, written before the invention of the steam engine to compel Apple to comply with its wishes.
Apple CEO Tim Cook has been accused of merely trying to protect his brand, and I’m sure that’s part of it, but that’s not the most important one. This is also about what should be a bedrock value of a civil society—living up to one’s commitments and fulfilling promises real and implied. That’s the moral stand that Cook and Apple have taken.
In “A Message to Our Customers” on the Apple website, Cook notes, “If the government can use the All Writs Act to make it easier to unlock your iPhone, it would have the power to reach into anyone’s device and capture … your messages, access your health records or financial data, track your location, or even access your phone’s microphone or camera without your knowledge.”
Apple consumers are very loyal, just as VW consumers were before the emissions testing scandal, not just because they think the company makes superior products but because they have a strong sense of identity with the brand and the values they associate with it. Were the company to voluntarily capitulate, many of those individuals would understandably feel betrayed.
Whether the nuances of this issue are resolved in Congress or in the courts, Cook is seeing that Apple remains true to its word and that’s an old-fashioned commitment that the 21st century could use more of.