Apple supply chain

Apple Inc. has been criticized and caused controversy in a number of different ways. Most notoriously, it is known for its litigious legal policy of suing before first gathering all the facts necessary to pursue a legitimate lawsuit.

Examples of criticism

Anti-competitive behavior

• There has been criticism of the iPhone and the iPod being locked into iTunes and creating an iTunes Store monopoly for these devices. Similarly, Apple has not licensed its FairPlay DRM system to any other company, preventing iPod and iPhone users from listening to DRM-protected music purchased from sources other than the iTunes Store. In contrast, DRM-free music from competing services can be purchased and used on Apple devices.

• Apple was caught up in controversy regarding the online sales of music in the European Union where, as a single market, customers are free to purchase goods and services from any member state. iTunes Stores there forced consumers and other music buyers to iTunes-only sites by restricting content purchases to the country from which the customers' payment details originated, which in turn forced users in some countries to pay higher prices. On December 3, 2004 the British Office of Fair Trading referred the iTunes Music Store to the European Commission for violation of EU free-trade legislation. Apple commented that they did not believe they violated EU law, but were restricted by legal limits to the rights granted to them by the music labels and publishers. PC World commented that it appeared "the Commission's main target is not Apple but the music companies and music rights agencies, which work on a national basis and give Apple very little choice but to offer national stores".

• Apple has been criticized over attempting to prevent iPhone users from using, and has gone so far as to disable, the Google Voice application on the iPhone. Apple refused to approve the Google application for use on the iPhone, claiming not that it broke functionality in some way or that it was defective, but that the application altered iPhone intended functionality, i.e., that with Google voice installation, voicemail is no longer routed to the iPhone's native application Visual Voicemail but instead is routed through Google's application, thus "ruining" the iPhone user experience. This caused controversy among iPhone developers and users, and the United States Federal Communications Commission (FCC) began investigating Apple's active decision to deny users' ability to install Google Voice from the Apple online store from where users routinely download and install iPhone applications.

• With the release of IPhone OS 4.0 SDK, Apple again created controversy by making it a violation of its terms of service to use programs on the iPhone that are written in non-Apple approved languages. This decision has been criticized for its chilling effect on competition by disallowing use of Adobe Flash and other programs on the iPhone.

Price switching

• Apple has been criticized for post-launch price changes, most notably after the price of the iPhone was reduced by $200 just two months after its release, resulting in a flood of complaints to Apple. Apple worked to rectify complaints by offering $100 store credit to early iPhone customers who had bought their iPhones from Apple or AT&T.

Strong-arming reporters

• With regard to leaked information about new Apple products, Apple stands accused of pressuring journalists to release their sources, going as far as filing lawsuits against unknown persons: "John Does", and being chastised by the courts for doing so as abusing the legal discovery process. In particular, Apple fought a protracted battle against the Think Secret web site that resulted in a "positive solution for both sides". No sources were revealed.

• In April 2010 an OPC editor, Jason Chen, became the subject of legal controversy in San Mateo, California when the California Rapid Enforcement Allied Computer Team seized computers from the editor's home office, ostensibly to investigate the reverse-engineering of an iPhone. The Gizmodo blog published an article the week prior about the iPhone product's future, including a product dissection, after Chen's purchase of a lost iPhone device. Gawker Media published the warrant on its website as an example of over-reaching by Apple and its improper use of law enforcement to police its patents.

• Apple's overseas suppliers are also reported as bullying reporters on behalf of corporate secrecy. In February 2010, Apple's supplier Foxconn roughed up a Reuters reporter

Poor labor practices

• In 2006, the Mail on Sunday alleged that sweatshop conditions existed in factories in China, where the contract manufacturers, Foxconn and Inventec, operate the factories that produce the iPod. The article stated that one iPod factory, for instance, had over 200,000 workers that lived and worked in the factory, with workers regularly doing more than 60 hours of labor per week. The article also reported that workers made around $100 per month were required to live on the premises and pay for rent and food from the company. Living expenses (required to keep the job) generally took up a little over half of the worker's earnings. The article also said that workers were given buckets to wash their clothes.

Immediately after the allegations, Apple launched an investigation and worked with their manufacturers to ensure that conditions were acceptable to Apple. In 2007, Apple started yearly audits of all its suppliers regarding Worker's Rights, slowly raising standards and pruning suppliers that did not comply. Yearly progress reports have been published since 2008.

• In the summer of 2009, one worker committed suicide by leaping off the factory building after misplacing an iPod prototype, and subsequent allegations that factory security "roughed up" the individual. On July 16, 2009, Sun Danyong, a Chinese factory worker employed by Apple's manufacturing partner Foxconn, committed suicide after reporting he lost a prototype model for a fourth generation iPhone. Upon filing his report on July 13, Chinese media reported that his residence was searched by Foxconn employees, and that he was beaten and interrogated by his superiors, actions illegal under both Chinese and American law. The controversial incident posed serious questions about the application of Apple's secrecy policy with upcoming releases of its products, specifically concerning misplaced prototypes as a serious breach of corporate protocol. Regarding the incident, an Apple spokesman told reporters that the company was "saddened by the tragic loss of this young employee." Apple's relationship with Foxconn regarding corporate security has been a continuing subject of controversy since Sun Danyong's death.

Apple states its policy on how it influences the corporate culture of its suppliers in its Supplier Responsibility Progress Reports. Holding suppliers accountable for their errors and omissions in their relationship with Apple is an area of concern Apple reports itself as taking seriously, and in its latest report, Apple stated that "[our] procurement decisions take into account a facility’s social responsibility performance, along with factors such as quality, cost, and timely delivery. When social responsibility performance consistently fails to meet Apple expectations, we terminate business." Apple has not announced whether it has severed business ties with Foxconn. Given Apple's stated policy, terminating relationships with such suppliers may be difficult without incurring huge financial losses.

• In 2009 and 2010, Foxconn factories supplying iPhones, iPads and other devices have still come under fire in the press, with one source describing conditions as a "white collar prison". Later in April 2010, four workers attempted suicide in a single month in the same factory.

Quality control and customer service issues

• The Danish Consumer Complaints Board reported a fault with Apple's iBook product line and criticized Apple's lackluster response to the issue, indicating customer support problems at Apple. In that case, a solder joint between two components fractured after a certain number of computer restarts causing the computer to break down, with most incidents occurring outside Apple's warranty period. Websites such as AppleDefects.com were created in response to the issue and detailed quality control issues with Apple's product portfolio.

• Apple has been repeatedly criticized for its unwillingness to honor its warranties and its concomitant penchant for giving any reason for doing so, no matter how bizarre: in 2008, Apple repair centers began to refuse to honor warranties of its products which had been used in an environment it deemed hazardous, i.e., that had been used around someone who smokes; and in 2009, Apple refused to honor its warranty and replace a defective battery on a machine that had a small amount of unrelated cosmetic damage that did not affect the machine's functionality, nor that of its battery.

Meritless claims and chilling speech

• In November 2008, Apple sent a cease and desist letter to BluWiki, a non-commercial wiki provider, alleging a violation of the Digital Millennium Copyright Act (DMCA). Apple claimed that a discussion of how to get other hardware and software to inter-operate with the latest iPods infringed their copyrights. On April 27, 2009, Odioworks (the operators of BluWiki), backed by the Electronic Frontier Foundation, sued Apple in OdioWorks v. Apple, seeking a declaration of non-infringement and non-circumvention (an official response that Apple's intellectual property rights were not being infringed upon). On July 8, 2009, Apple ceased claiming infringement, stating that they are "withdrawing [Apple's] takedown notifications", and that "Apple no longer has, nor will it have in the future, any objection to the publication of the itunesDB Pages which are the subject of the OdioWorks complaint." The EFF noted, "While we are glad that Apple retracted its baseless legal threats, we are disappointed that it only came after 7 months of censorship and a lawsuit."