Tim Cook was grilled by a Senate investigative committee today, and the Apple CEO had to publicly defend a tax avoidance scheme that shifted at least $74 billion away from U.S. tax collectors.
Cook pointed out that Apple pays billions of dollars in taxes on its U.S. earnings and breaks no laws with its tax strategies. But there was no denying some damage had been done to Apple’s image; Republican Sen. John McCain called the company “the most egregious offender” among tax-avoiding U.S. corporations, while Democratic Sen. Carl Levin said Apple has been “exploiting an absurdity, one that we have not seen other corporations use.” In other words, in a nation that tends to focus its corporate outrage on banks and health insurance companies, elites from across the political spectrum argued that Apple is exceptionally bad at meeting a crucial societal obligation. That can’t be a message Apple is happy to see aired.
But the public pressure on Apple to live up to its high-minded marketing won’t be confined to one company; tech corporations are being held to an increasingly high standard. That’s partly because their role has grown so dramatically. Once upon a time, computers were large boxes used behind closed doors, adopted by tinkerers and sold by misfits of little interest to the broader society.
Today people have a much more intimate relationship with software and hardware, carrying smartphones at all times, taking tablet computers into bed, uploading private photos to the web and turning to a remote server when they want to get in touch with a relative or close friend. Tech companies have seized on this sea change, positioning themselves as enablers of freedom, self expression, and cultural change. Their leaders are not the subjects of Oscar-winning movies and best-selling books. Is it any wonder politicians are now more likely to call them on questionable behavior?
Apple may, today, be the most prominent tech company called to the carpet, but others have had, and will again have, their turn. Google, for one, has been criticized for its own aggressive tax avoidance strategies, while Facebook and Twitter have taken federal heat for their privacy practices.
Tech companies are not, for the most part, polluting the air, ruining the land, and poisoning the food supply like the industrial villains of decades past. But they have held themselves up as instrumental to human progress. Having sold this vision of advancement and having captured the imagination of the public, tech companies must comport themselves accordingly. Technical compliance with the law isn’t enough; companies like Apple will have to strain – and be seen straining – to do the right thing.
