Apple sticking taxpayers with part of the bill for digital ID rollout
[ad_1]
Keys and wallet
Source: Apple
AppleAccording to CNBC confidential documents, the company is asking for support from customers and a portion of the cost to make iPhones digital ID cards.
According to the four-state contracts that were signed, the company required states to keep the system needed for issuing and servicing credentials. They also hired project managers to assist with Apple inquires. The new feature was prominently promoted and pushed for adoption by all other agencies.
Apple announced in JuneIts users will soon be able to store their state-issued ID cards within the iPhone’s Wallet app. This is billed as a safer and more convenient method for customers to enter credentials in a range of settings. This feature could be combined with Apple’s biometric security measures such as Face ID to reduce fraud.
However, industry experts have raised questions about how local authorities can hand over control of citizen’s identities to a private company worth $2.46 billion. The integration of identity into mobile devices is another draw. concernInformation from privacy specialists about possible dystopian scenarios with surveillance.
A rare insight into the business dealings of this powerful corporation can be found in the contracts signed between Apple’s Cupertino (California) and several states, including Kentucky, Arizona and Kentucky. Apple is known for their innovative products. obsessionSecrecy. To prevent documents being leaked into the public, it often requires potential partners to sign confidentiality agreements.
`Sole discretion’
The seven-page Memorandum of Agreement, obtained by CNBC through open records requests, portrays Apple as having great control over all government agencies involved in issuing ID cards.
Arizona and Georgia will offer drivers’ licenses via the Wallet app. However, they have not yet launched their programs. Although the agreements were almost identical between states, CNBC didn’t review the agreements for Connecticut and Utah. signed up for Apple’s digital ID program.
Apple holds the “sole discretion” of key elements of the program. This includes what type of device will work with the digital IDs, the reporting requirements for states, as well as when and where the program launches. Apple has the right to approve or reject marketing plans that are submitted by states.
Similar to how Apple deals with vendors in the past, but instead of Apple getting paid, states must bear the financial responsibility of running the programs. Jason MikulaThe contracts were awarded to, a newsletter author and fintech consultant.
Mikula explained that the relationship is like one between vendors. While the states have exclusive rights to what Apple gives them, it makes no sense. They could, however, presumably, negotiate a more equitable contract. I don’t think there was any other case where the identity and government systems were available for commercial purposes.
Apple did not respond to requests for comment. Requests for comment were not immediately answered by representatives from Oklahoma, Arizona, Kentucky, Kentucky, and Georgia.
There is an international push to develop more advanced digital identification systems. This will be in addition to digitizing industries ranging from entertainment to finance. According to, however, these efforts in China, France and Germany are made at the nation level. Phillip PhanJohns Hopkins Carey Business School professor.
Apple is in charge
You can see who sits in which seat throughout the contracts.
Apple asks states to conform with the International Organization for Standardization’s security requirements regarding mobile driver’s licenses. Apple stated in September that it was involved in standard development.
According to documents, states must agree to allocate “reasonably sufficient resources and personnel (e.g. staff, project management, funding)” to help Apple launch the Program within a timeframe to be set by Apple.
The contract says that “Agency will, upon request by Apple designate one (or more) project managers who will be responsible for answering Apple’s questions regarding the Program.”
States must agree to broad-ranging initiatives to make Apple’s digital identifications more widely adopted. This includes offering this feature “proactively”, at no extra cost, whenever citizens get new or replacement ID cards.
States must also encourage the adoption of new IDs among “key stakeholders” in federal and state governments, such as the Internal Revenue Service and law enforcement agencies from the states.
Although the State agencies are required to prominently mention the Program on all communications that relate to Digital Identity Credentials, marketing efforts must be approved by Apple.
States pay for all these expenses. According to the contract, “except where otherwise agreed between the Parties”, neither Party will owe any fee under the Agreement.
A communications officer from the Arizona Department of Transportation was asked by a reporter if his state is eligible for Apple payments. He confirmed that there were no economic or payment considerations.
There are no guardrails
The result is that taxpayers pay for the maintenance of technology systems in states. This benefits Apple, who finds its devices more crucial than ever.
“Apple’s interest is clear – sell more iPhones,” Phan said in an interview. The state wants to serve its citizens. But I don’t know why they believe a partnership with one technology company, which has a closed ecosystem, is the best way. It is questionable that the state would spend its taxpayers’ money on a product which serves half of its citizens.
Apple’s Wallet application isn’t a significant revenue source, though it does generate fees from Apple Pay transactions. This is reported under the services business. Instead, the Wallet and other services serve as strategic features that make iPhones more attractive to customers and prevent them switching to Google’s Android.
Apple has made it clear that its contract transfers responsibility for verifying user identities to states. Apple will not take responsibility for verification results. Agency agrees with Apple.
Mikula says that the agreements also highlight what’s missing. Mikula claims there are no restrictions or guardrails to restrict Apple’s use of its powerful identity verification capability. It raises the question of whether Apple can limit access to this new capability for its competitors’ products.
He said that Apple has had a long history of using its dominance in software and phone hardware to prefer its products and to impose a cost on third-party users.
[ad_2]