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I'm Kara Swisher, and you're listening to Sway, my guest today is Apple CEO Tim Cook. He's been at Apple for 23 years and at the helm of the company for almost 10, having inherited the reins from the late Steve Jobs. When Cook got the top job, Apple's market cap was close to 350 billion dollars. Today, it's worth over two trillion. It turns out billions of devices that are hugely popular worldwide. But the company is also now in the crosshairs of antitrust investigators due to its massive size and power.
Epic Games is suing Apple, for example, alleging the company is a monopoly and other developers are also complaining to regulators. Meanwhile, some users of the so-called free speech network PARLER have also taken issue with Apple for removing Hala from its app store. It was a move made by Apple and by Google and Amazon. After the capital attacks, they maintain the parlour failed to moderate dangerous content related to the attempted insurrection on January 6th.
Cook has also become a hero to some, doubling down in an impassioned speech and a major privacy conference recently calling out the tech industry, especially social media companies, over misuse of consumer data. If a business is built on misleading users, on data exploitation, on choices that are no choices at all, that it does not deserve our praise, it deserves reform, we should not look away from the bigger picture at a moment of rampant disinformation and conspiracy theories just by algorithms, we can no longer turn a blind eye to a theory of technology that says all engagement is good engagement.
Tim Cook, welcome to Sway. That was quite a speech. I was surprised by how strongly you put it. You were talking about social media companies there and those that use data you took parler off.
How did you think about that decision?
Well, in some ways, it was a straightforward decision because they were not adhering to the guidelines of the App Store. You can't be inciting violence or allow people to incite violence. You can't allow hate speech and and so forth. And they had moved from moderating to not being able to moderate, but we gave them a chance to cure that. And they were unable to do that or didn't do that. And so we had to pull them off. Now, having said that, Carol, I hope that they come back on because we work hard to get people on the store, not to keep people off the store.
And so I'm hoping that they put in the moderation that's required to be on the store and come back, because I think having more social networks out there is better than having less.
The day of the attack, I was actually interviewing the CEO of Parler. It was quite an astonishing interview. Did you listen to what he said? He said, I don't have responsibility.
I don't take any responsibility in. And obviously that does that doesn't adhere to the App Store terms and conditions.
Yeah, you had been working with them previously on these issues, too.
We believe that at a point in time they were compliant and then they were not and then they were not. Yeah.
And lots of tech companies acted at the same time, whether it was Amazon, Google, Yahoo and others, it was sort of like a house of cards sort of fell in on them. Should it have been done before?
It happened as soon as we became aware of it, and I'm not sure it would have taken the capital of it for that to occur. We would have taken it off when we became aware, after giving some time to cure, we would have taken it off. And again, I can't stress enough. I hope they come back.
Yeah. I want to talk about the hearings on Capitol Hill last month. You weren't there, but the CEOs of three tech companies were Mark Zuckerberg of Facebook, Jack Dorsey of Twitter and Sundar Pichai from Google and Alphabet. Congressman Mike Doyle asked all three tech executives to answer yes or no to the same question, which is a little reductive. I would have asked it slightly differently, but he wanted to know whether their companies bore any responsibility for spreading misinformation and planning the attack on the Capitol.
They didn't answer. They sort of tried to walk around it. Jack Dorsey kind of answered, said yes. But essentially, how would you have answer for those companies or for Apple or technology in general?
Well, you know, I can only speak for Apple. And from the very start, we've always believed in curation. And so we review every app that goes on the store. That doesn't mean that we're perfect at doing it. We're not. But we care deeply about what we're offering our our users. And when we and when we have a news product like Apple News, we have human editors that are selecting the key stories. And so they're avoiding all of the misinformation that is out there.
The reality is that the web in some areas has become a dark place. And without curation, you wind up with this firehose of things that I would not want to put into an amplifier. Right. Which is what tech is in a large way. If you have a platform, you amplify things.
Do you consider Apple an amplifier? Well, I think in areas like the selection of stories on Apple News, we have human editors do that, even though the app stores and a push. So we're not pushing things in your feed like a social media company would be. A lot of people are coming to the App Store, and so we want that to be a safe and trusted place to be.
What is the broader capability of big tech in the context of things like the attack? Because you did actually address it in your speech on privacy. A lot of people give some culpability to social media sites and Apple does not have one thing, never sort of took off. I remember was the social network Apple.
And I do remember I'm glad you were guiding me. Yeah, I remember Steve. He says, what do you think of paying? It sucks. And he's like, yes, he really does.
But do you think social media sites were culpable in the attack?
I think that the amplification of social media is something that I deeply worry about. And the targeting tools, the same tools that are used to target in advertising, can be used to target for misinformation purposes or extremist purposes. And so I deeply worry about that. The people I fault the most for the capital attack are the people that obviously were in the attack itself that breached the capital. But I think it's incumbent on all of us to take a step back and ask what were the other contributing factors, because we don't want to repeat it.
The. Was one of the darkest days in our history, and it played out in front of all of us. I felt like it was more of a movie or something, that it was something that was not real, that it couldn't be happening in the United States of America. And and so I'm hopeful that that that deep inspection occurs.
So one of the things is calls for amending Section 230, which is, of course, the part of the Communications Decency Act that protects platforms from getting sued because of content of the user's post. Do you think liability is important?
I'm not big on suing as a lover. Mm hmm. I think to 30, it was written at a time prior to lots of things that have come into existence and they weren't envisioned. And so I think it's time to revisit to 30. But I don't have an answer of what the perfect way to revise to 30 would be.
So let's talk about the solutions. I want to get into privacy, which Apple has been pushing rather hard as well. How do you look at data and privacy bills that are being contemplated?
Generally speaking, I think privacy is one of the top issues of the 21st century, and I think we're in a crisis, OK? Years ago, I thought companies would regulate themselves and sort of get better. I no longer believe that. And I'm not generally somebody that is keen on regulation, but I think that regulation is required.
What made you not believe it? What tipped you over?
Because I saw companies continually going outside of what I thought were reasonable rails.
One of the things you said in that speech, if we accept as normal and unavoidable that everything in our lives can be aggregated and sold, we lose so much more than data. We lose freedom to be human. Talk about what you meant by that.
If you think about a surveillance world, a world where you know, somebody is always watching everything you're doing. And in the case of a phone or a computer, it's also what you're thinking because you're typing in searches and so on and so forth. And so I think in that kind of world, you begin to do less. You begin to think less. Your your freedom of expression begins to narrow and the walls move in on you. And I start thinking about that at its natural endpoint.
And I don't want to be a part of that society.
And why is it important for Apple to speak up on this? You sell the phones that allow these apps to do those things. You've used it as a brand attribute and advertising, very strong advertising, standing up for privacy. Why are you speaking out so strongly about it?
It's not about being a brand attribute, to be frank. For us, privacy is a basic human right. And it's a it's a right that other rights are built off of. It's that kind of core. It's bedrock. And it's not something that I just decided a few years ago. As I remember, Steve commented on this with you over a decade ago. Yeah. He said something like, privacy means people know what they're signing up for in plain English repeatedly.
The individual should own their data and they should own the ability to say who gets it and what of their data they get and what they use it for. And frankly, that's not the situation of today.
Are you surprised by the amount of data thievery essentially that goes on? I'm appalled by it. And so we've got things coming out like privacy, nutrition label. You know, privacy policies have become these multi-page things that people just blindly say. I agree, so that they can go to the next screen and move on of privacy nutrition label, much like a nutrition label on food gives you at a glance some key information will improve that over time. And then the one cure that's probably gotten the most attention is called to say, yes, we're going to get into that app tracking transparency.
And what what it tries to get at is companies that are taking advantage of tracking you across apps of other companies and therefore putting together an entire profile of what you're thinking, what you're doing, surveilling you across the web 24/7. Right.
Using devices you make as the vehicle to do so. They are using all technology, whether in your case.
So let's make it easy for people to understand when exactly is the new update coming out? It's just a few weeks now. All right.
And it's called ACT, which is app tracking transparency. That's right. Obviously, companies like Facebook and many others make a lot of money from data collected from those trackers. How will the consumers see it? What is going to happen?
They'll see a simple pop up that basically prompts them to answer the question of are they OK with being tracked or not? If they are, things move on. If they're not, then the tracking is turned off or that in. A vigil with respect to that specific job, right, and will it tell them what's tracking to get let them make a decision? Because just do you want to be tracked? Must be stopped? No, no, thank you.
The developer can put essentially other information in there. Maybe they say that it's for better ads or better targeted ads or whatever. All we want to do is supply a tool so that the person that should make the decision can make it.
You're guiding them there, though. You are guiding them to doing this. Why did you decide to do this now?
Every year we add privacy features. If you look back in time, we've added some every year. It is not aimed at a company. It's aimed at a principle. And the principle is that the individual should be in control over whether they're tracked or not, who has their data. It's that simple. And if if you were designing such a system from scratch today, of course you would do this. Of course, it should be your decision of what happens to your data, not mine or somebody else's.
And people that argue against that choice is essentially saying that they didn't have informed consent before. And I think that's a powerful point in and of itself. Right.
But Facebook, the company's privacy stance, Facebook said, was meant to benefit your own bottom line. And you're in this fight with Facebook. And what is your response to Facebook's response, which is quite vehement, calling you essentially an existential crisis to their business?
All we're doing is giving the user the choice whether to be tracked or not. And I think it's hard to argue against that. I've been I've been shocked that there's been a pushback on this to this degree, to this degree, because, I mean, how do you argue against that?
It's sort of like they have a lot of them over. You're hurting small businesses.
That is part of you that we know. These things are flimsy arguments.
So you say you're surprised by this pushback. I'm surprised. You're surprised. I guess you're aiming at the heart of those businesses.
First of all, I don't really agree with that. OK, with that assertion, I think that you can do digital advertising and make money from digital advertising without tracking people when they don't know they're being tracked. And I think time will prove that out. I've heard this about other things we've done in the past, that it's obvious existential and it wasn't I don't buy that.
What will be the result of the impact on Facebook's business? Do you think I'm going using Facebook as the biggest and they're the ones that collect the most data, but Google also does in many others. Do you care?
I'm not focused on Facebook, so I don't know.
I'm just their competitors. So you don't see it this way. You don't view them as a competitor to Apple?
Oh, I think that we compete in some things. But no, I, I if I may ask who our biggest competitor are, they would not be listed. We're not we're not in a social networking business.
All right. Let me ask you one more Facebook. I said I'm sorry to bug you about this, but you spoke three years ago on stage in Chicago was after Cambridge Analytica news broke when I asked you to imagine yourself and Zuckerberg shoes in his situation. I want you to hear this clip. And here's what you said.
We've always felt really, Mark Zuckerberg. What would you do? What would I do? I wouldn't be in this situation, OK?
People seem to like that answer. Do you feel that way now? You know, I can only talk about the choices that Apple has made and this is a good choice, this transparency tracker.
I feel very emphatically that it is the data minimization, getting as little as you need, making sure you need what you're getting, challenging yourself to get less and less and less and less. And then security is the underpinning for privacy. Right. And encryption. And and there's a whole bunch of things we could talk about there by itself.
Well, let me let me ask that. Several years ago, you were in a fight over encryption. This is after the 2015 San Bernardino terrorist attack. The FBI asked Apple to build a backdoor to unlock the attackers phone. You opposed the order, citing the danger to privacy.
Yes, we cited the danger to hundreds of millions of customers because you can't build a singular back door up. The back door that they were asking for was in the operating system and would affect everybody that owns an iPhone.
And then the Justice Department ended up unlocking the iPhone without Apple's help. Yeah. Where do you stand now on that? I think it was the right fight.
I think encryption is still under fire today. There's still people that believe that the government should have a should either have a key or have access to a key or have a door or access to a door. And our point of view hasn't changed on that. It's that once you have a back door, you have a back door for everybody. There's not a way in technology today to have a back door just for the good guys.
All right. You're being sued right now by epic games, which makes the wildly popular game fortnight. Back in August, Epic tried to circumvent Apple's App Store. Basically, they wanted to avoid Apple taking a 30 percent cut of the INAT purchase, so they introduced their own direct payment system. You kicked fortnight off the store for breaking the rules. You may not be able to talk specifically, but what was the principle at stake here?
It's about living up to the rules and the guidelines of the App Store, and they had done that for years and then had decided, evidently, that they didn't want to follow the rules anymore and had passed something throughout review and then after it had been through app review, changed it on the server side. So it was sort of a deceitful move. And so we're going into court. We're coming to tell our story. We're going to talk about the privacy and security aspects of the store.
And we're confident in our case.
This trial is set for us, I think May 3rd coming up. Yeah, it's coming at a amont.
So when you look at this case, one of the things is there could be it could be bad rules. This is what they're trying to argue. I think on an epic side, whether these rules where you take a certain court and then, for example, Apple takes only 15 percent of Amazon's app store revenue for prime video, for example.
Is there a reckoning for you all to think about changing these rules? More significantly?
What we've we the App Store is not cast in concrete, you know, and so we've changed over time. In fact, if you look at the commission's Kara and I would sort of reframe a bit from what you said, because the vast majority of people pay nothing because there's not an interchange of of a digital good ride. And so, like, 85 percent of people pay zero commission. And then with our recent move with small developers, developers earning less than a million dollars a year pay 15 percent.
Well, it turns out that that's the vast majority of developers. And then we also have rules that say that if you have a subscription model in the second year and later years, you only pay 15 percent of those. And so we've only reduced the price over time. It's only gone in one direction. It's gone down. More apps were exempted, but those rules are applied equally to everyone. So you've mentioned Amazon getting 15 percent. That's true for any kind of video streaming service that meets the guidelines of that program.
So it depends on what they're doing with their it depends on what they're doing, like Netflix and others. Right.
What's wrong with EPIC or any developer going their own way or allowing a direct payment system instead of having to go through the App Store? Why should you have the control?
Well, I think somebody has to. I think somebody has to care. Right. Right. Because users aren't going to come there and buy things if they don't have trust and confidence in the store. Mm hmm. And we think our users want that.
Why can't there be more stores, other stores run by.
Because if you had side loading, you would break the privacy and security model on the phone itself. And the phone itself wouldn't protect the user necessarily.
Well, you'd be opening up a huge, huge vector on another store.
Do you find this to be your most vulnerable part of your business, these issues with antitrust investigators looking into it?
Apple has helped build a. Economy, that's over a half a trillion dollars a year, half a trillion, and takes a very small sliver of that for the innovation that it unleashed and the expense of running the store. I think it's hard to argue that the App Store is not an economic miracle. I mean, you just look at it. There's been over a million people in the US now have their livelihoods associated with the App Store, and they are not only selling in the United States, but they're selling abroad.
And this is one of the fastest growing job segments.
But yet you feel you have to have complete control over this economic miracle or you can't envision not having control of it.
I think curation is important as a part of the App Store in any given week, one hundred thousand applications come into the app review. Forty thousand of them are rejected. Most of them are rejected because they don't work or don't work like they say they were. You can imagine if curation went away, what would occur to the App Store in a very short amount of time.
We'll be back in a minute. If you like this interview and want to hear others, follow us on your favourite podcast app, you'll be able to catch up on Hsueh episodes you may have missed, like my conversation with former Parler CEO John Yates, and you'll get new ones delivered directly to you. More with Tim Cook after the break. You know, you could be listening to this podcast on the beach right now on Amelia Island. Imagine 13 miles of wide open, breathtaking coastline with tranquil sand dunes and smiles that stretch as wide as the horizon.
The breeze is just a little softer. The days are a little brighter and the pace a little slower. Perfect for your much needed escape. Discover the northeast Florida barrier island were the moments are always a little sweeter. Visit w w w dot. Amelia escape dotcom. You've acquired a lot of companies since 2015, but not big ones, Apple is still maintained. It's not in the big acquisition game. I think the last big acquisition was Beats Music and Beats Electronics in 2014 for three billion dollars, which a long time ago.
Talk a little about where you think innovation is going for Apple itself.
I just see I have a rule against talking about things in the future, but I'm very excited about A.R. I'm very excited about AI.
What is your big interest in augmented reality? I remember we had lunch once and again. You talked about football and augmented reality. That was all you so well.
And I'm more interested in, as I told you, in augmented reality, what is the interest in it? Because there's Apple is holding it. Thanks. Worldwide Developers Conference in June with the tagline Low and behold, I don't know what that means. It's rumored that Apple is expected to announce the first major new device since 2015, a mixed reality headset. Can you talk about R and this mix reality headset?
Well, I can't talk about anything that we did that may or may not be in the pipeline. But in terms of a are the promise that they are is that you and I are having a great conversation right now. Arguably, it could even be better if we were able to augment our discussion with charts or other things to appear in. Your audience would also benefit from from this, too, I think. And so when I think about that in different fields, whether it's health, whether it's education, whether it's gaming, whether it's retail, I'm already seeing or take off in some of these areas with use of the phone.
And I think the promise is even greater in the future.
So it's a critically important part of Apple's future. It is. What about content?
You're in content. Why do you think you need to be in there competing against a Netflix? It seems like it's a karma for you, like a hardly any investment.
Oh, no, not at all. Not not at all. We're making serious investments in Apple TV. Plus, I assume you're talking about video content for the same reason that we're in products. We're about making the best, not the most. And so in the in the TV plus area, we're about originals only on Apple. And so I don't know if if you're watching what you're watching at all, the morning show just on your watch in the morning show.
I hope you love it, Ted. Laughs So I don't know if you've watched Ted, so I have. But there was no better show during covid. I'm getting notes from a lot of different people that love it.
How do you compete, though, against a Netflix? And you've got all these streamers, all Biomax is making all this content. You have money. That's what you have the most of, I think, compared to all of them.
Well, hopefully we have good ideas, but I don't see it as a zero sum game. I don't see that if a given user buys Netflix that they can't also buy Apple.
And you think content is critical as an area of focus for Apple?
Yes. And we're putting all of ourselves into it is not a hobby. It is not a dip your toe in because it's an original focus. We don't instantly have a catalog with five hundred things in it. We're going to build over time. We've gotten over three hundred nominations now for awards and have won eighty.
Yeah, you don't strike me as a Hollywood guy. I don't know. I'm not a Hollywood guy. Yeah.
I don't see like Swaniker but I'm not a Hollywood guy but I love great content.
Last question. An innovation, a self-driving cars. One of the companies requires drive by a self driving startup. Apple is testing autonomous vehicles. It was reportedly last year. Elon Musk said he offered to sell Tesla to Apple for one tenth its value and he said you wouldn't even take a meeting with him.
You know, I've never spoken to Elon, although I have great admiration and respect for the company's built. I think Tesla is has done an unbelievable job of not only establishing the lead, but keeping the lead for such a long period of time and in the EV space. So I have great appreciation for them in terms of the work that we're doing there. Obviously, I'm going to be a little coy on that. The autonomy itself is a core technology, in my view.
If you sort of step back the car and a lot of ways is a robot. Yeah, an autonomous cars, a robot. And and so there's lots of things you can do with with autonomy. And we'll see what Apple does. We we investigate so many things internally. Many of them never see the light of day.
I'm not saying that one will not would it be in the form of a car or the technology within a car? I yeah, I'm not going to answer that question.
I think it has to be car. You can't just do the tech. You're not going to let you're not Google.
We love to integrate hardware, software and services and find the intersection points of those because we think that's where the magic occurs. And so that's what we love to do and we love to own the primary technology that's around that, that I'm going to go with CA for that, if you don't mind.
Don't just jump to car. I wish you would make a car. I actually been looking at electric cars and autonomous cars.
Anyway, one of the things I want to finish up is you, yourself and your sort of evolution politically too. You were talking about voting rights, about the issues in Georgia. You did engage with Trump a lot. I didn't call you Tim Apple once. Do you miss that, by the way, being called Tim Apple?
Yeah. You know, I changed my Twitter handle to Tim Apple for for a while, so I leaned into it.
You leaned into it and you just didn't correct him. You just thought, why not? Why not just let him do it? How do you look at working with the Bush administration versus the Trump administration? Because you've become more political?
I think I don't feel political. I feel that we focus on policies and we believe strongly in an engagement. So whoever is in the White House, we're going to seek to engage and we're going to seek to find areas of commonality where we can help the administration. And there will be areas that I'm sure that we are on different sides of of an issue as well. But our focus is not on the politics of it. It's on the policy. And so that's what we did during President Trump's administration.
That's what we'll do during President Biden's administration.
Talk about voting rights and what you said. Yeah, well, voting rights, I think voting rights are fundamental to democracy. You know, I I think about my old friend John Lewis and sort of what John did to advance voting rights and the hard fought wins there. We can't let those go in reverse. And I think just from a stepping back from it, I think we're probably all having the wrong conversation on voting rights. We should be talking about using technology.
How can we make it so simple that our voting participation gets to 100 or it gets really close to a hundred? Maybe maybe we get in the nineties or something? It's pretty arcane, certainly.
But when you introduce technology into voting, when it's already fraught with accusations of fraud, sort of a really troublesome stew, politically speaking, I'm not sure it may it may answer some of the issues.
It may be something that is so different than the so voting on phones.
Is that what you're talking about?
And, you know, I would I would dream of that because I think that's where we live. We do our banking on phones. We have our health data on phones. We have more information on a phone about us than is in our houses. And so why not? Well, it's been a little politicized at this point.
I mean, it's interesting you think policy versus politics, but you're in the middle of politics right now. But are there any negatives to moving into the political space from your perspective as a modern CEO?
It's not something I want to do. The way that I look at it is we want to advance some of our policies. We want to advance immigration. We want to advance on working on climate change. We want to advance job creation. We want to advance retraining because we see the need to retrain over a lifetime and we want to find the administrations or representatives that believe in those things and work with them on those. It's not really working against somebody.
It's working for those causes.
Is there a cost to a CEO inserting themselves and inserting themselves in policy? Every time I say something, somebody will reach out to me and not be very happy or not or be very happy.
Yeah, you decided to come out in 2014 in a Bloomberg piece. I can't believe you didn't come to Kara Swisher. But that's OK. That's all right. I'm forgiven you. And you're the first openly gay CEO of a Fortune 500 company.
Do you feel the need to be an even louder voice now, a more prominent leader in this area? You just teamed up with non-profit in circle to donate a million dollars. You're serving as honorary co-chair.
The way that I looked at this was I wanted to speak my truth because I saw kids struggling with who they were and maybe being disowned by their families, maybe being bullied, a set of horribles, if you will. And I felt that coming out and speaking my truth would help show them that there was a light at the end of the tunnel that they could rise and do things incredible in life, that they were not capped in some kind of way because they were part of the LGBTQ community.
And I feel like, well, I know because I've gotten so many different notes and people reaching out to me over time. That I accomplished that for a number of people, and I feel really good about that, I don't feel like that's all I need to do, I think to whom much is given, much is required. And so I'm going to continue like an inner circle is a great example. I don't know if you're familiar with that organization.
They built homes, but they built homes. They have kids that come to these homes. They have programs built around. It's a safe place to be. I think that program is scalable. And so we want to help that in any way that we can. And I'm going to speak out on laws and regulations that pop up that are discriminatory to the community.
What about Arkansas? Arkansas has passed a bill allowing doctors to refuse to treat LGBTQ patients. How do you look at issues like this?
This is everybody should be treated with dignity and respect. If you go into a doctor, they should treat you. I'm surprised we're even having to say that. Yeah, it's it's disappointing. Yeah. Are you worried? I'm worried that there seems to be more of a move afoot in a number of states in this fraud. Very focused on transgender. Mm hmm. And and then some focused on the broader community. And I, I, I think this this encroachment needs to stop.
All right. So 10 years, are you going to be at Apple? 10 more years.
10 more years? Probably not. But I can tell you that I feel great right now. And the date's not inside. But 10 more years is a long time and probably not 10 more years.
What would you do if you weren't running Apple? I don't have a clue because I love this company so much that it's hard to imagine my life without it. Right. And so I don't think I will know that until after I'm not here because I think I'll run so fast that I'll never really think about it until I'm not running anymore.
Does that make any sense?
Maybe just go on vacation, something like that. All right, Tim, thank you so much, Kara. It was great talking with you. Good seeing you. All right. Bye.
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