Apple Card

The Real and the Click Bait of the Apple Card and Gender Bias

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Nothing in tech bleeds like a negative Apple headline, so when David Heinemeier Hansson’s tweet storm over his wife Jamie’s disproportionately low credit limit with the Apple Card went viral, everyone immediately jumped on it. Most have probably already heard about this story, as it quickly gained traction outside of the tech world in the mainstream news, but in case you haven’t, Ms Heinemeier Hansson was given a much lower credit limit than her husband when applying for an Apple Card, despite sharing accounts with her husband, having a better credit rating and having a longer established credit history.

Sometimes these kinds of viral stories are meaningless, but this one definitely isn’t. There is a real issue here and a real debate to be had at the heart of it. Unfortunately, 80-90% of the media coverage you get from a story like this tends to be pure click bait. Let’s try to cut through some of that, shall we?

Is Apple sexist?

If you step back from this controversy, no. Apple has actually been working hard to champion diversity within the company over the last 10 years. If you look at the executive rolls and the the events on stage, you are seeing more women than ever before in increasingly powerful roles. They leave every other major tech firm in the dust in this regard. This is absolutely a good thing and Tim Cook deserves credit for his leadership here.

That said, Apple’s commitment to diversity in hiring doesn’t absolve them of anything outside of that. The fact is that, while Goldman Sachs is the bank half of this card partnership, Apple’s name is on it. As you can easily see in how this story has been covered, they bear the brunt of the responsibility for what happens with it. It’s on them to fix this and let people know how they are doing it, or the pounding will continue. Apple as a corporation may not be sexist, but they are guilty of letting institutional sexism happen on their watch.

Is Apple responsible?

Yes, absolutely, and they do deserve blame for not doing their due diligence here. If they are entering a new market, and they are entering several now thanks to their services push, they HAVE to do their homework and make sure they aren’t going to have problems like this. They should have discovered this issue and corrected it in testing before the card was launched to the public. Full stop.

This feels like the old Apple Maps problem again. Apple decides to enter a new field and hypes its product to no end. While the Apple Card itself is actually a good product while Maps was a complete and total disaster, this is still a high profile and completely unnecessary black eye for the company. Apple hubris is still a thing.

Is this “sexist” algorithm behind card approvals and limits Apple’s?

This isn’t public knowledge, but there is likely a 95% or better chance that it is Goldman Sachs’ intellectual property. Again, they are the bank in this partnership and this is definitely falls on what would normally be their side of the fence. Also, if you look at Apple’s iPhone Upgrade Program, their other service that involves a bank, all loan approvals and payments are handled through Citizen One, their bank partner in that venture. This would be completely outside Apple’s wheelhouse and would be a significant departure from how they typically do things.

We will likely get confirmation on this at some point, but for now its safe to assume that Apple didn’t write the code behind this problem. This does not absolve Apple of responsibility, but it should change the nature of the criticism aimed at them. There are several articles that I have read spouting off about “Apple’s sexist algorithm” because the writer didn’t take the time to do some basic research. That kind of charge goes a lot deeper than what Apple is more likely guilty of here. It also shows how the tech media is more interested in a quick click than the real story here and the real problems at the heart of it.

What about Jamie Heinemeier Hansson?

If you haven’t yet, go read her blog post here. While I am critical of how much of the media is portraying this story, her comments are 100% on point and aimed in the right direction. Her focus is on the fact that the fault lies with how the “black box” algorithm used to determine credit worthiness and treated her and likely many other applicants. She points how it was used as both a reason for her credit limit and then the excuse for why she got it after the fact. She is clear that people need to question how these algorithms are used and that we as consumers need to hold the companies that use them accountable for how they use them and not just accept the results. Here, here.

Ms Heinemeier Hansson also owns the fact that she was ultimately helped and her credit limit raised because this story went viral, because her husband is a well-known developer and the fact that she and her family are quite wealthy. A lot of women and minorities won’t get the same treatment, so I think it’s a good thing that she made a public post pressing the issue and made it about more than just how she was treated in this one instance.

What about David Heinemeier Hansson?

I cannot say quite the same for her husband, David Heinemeier Hansson. Ms Heinemeier Hansson was brief in her remarks and completely and totally on point. Her husband shares a lot of the same arguments, but he’s also made some statements that are, frankly, just flat wrong. As a husband, I get it. He’s mad and he wants Apple to step up and own this mess and he is 100% right to stand up for his partner. That said, he runs around in circles both in his tweets and his CNBC interview. Some of what he says is just off base.

For example, his comparison of Apple’s reliance on Goldman Sachs for the banking end of this Apple Card to Apple’s relationship to Foxconn is just 100% factually incorrect. If he were talking about the iPhone Upgrade Program, sure, as that is just Apple’s name stuck on a contract loan arrangement offered by a bank that does similar deals with other companies. If he were talking about an Apple credit card that was just Apple’s name slapped on a card by a bank that does this for many companies, again, I would agree. The Apple Card is neither of those things.

This is not Apple and Foxconn. Apple and Goldman Sachs have a partnership, which is why you see Apple mentioning their name so publicly and prominently. Go try and find Citizen One on the iPhone Upgrade Program site anywhere prominent. You won’t because they aren’t these same kind of programs.

The closest accurate parallel I can think of is Apple and AT&T back in 2008. Apple wanted concessions and features for their new phone that went far beyond what most cell phone companies were getting and most carriers wouldn’t play ball with them. Here in the US, AT&T was willing to meet Apple’s demands because they saw an opportunity to make a big move up by cashing on on Apple’s popularity. There were plenty of bumps along the way, but it worked out pretty well for both in the end.

The Apple Card is a similar partnership. Apple is moving into a new industry, but came in the door demanding concessions about user privacy. Goldman Sachs has been looking to diversify into personal finance and sees this as their big ticket to fast growth. I do agree with Mr Heinemeier Hansson that Apple’s name is on the card and that they do have ultimate responsibility. His is also a good example of why Apple farming out the majority of support for this card to Goldman is a huge risk. It blew up in their faces this time and this family does have every right to call them out on that.

However, right or not, if you are going to go and rant about something on TV, get your facts straight. Apple may have the ultimate authority and oversight over the Apple Card, but if your expectations are really that Apple will wave a magic wand and change the credit industry in an instant, then you are dreaming. They are not a bank and they aren’t going to become one overnight. Now, if we go back to my Apple-AT&T analogy, that was a very bumpy ride at first, too. However, given time, Apple DID completely change the smartphone and larger tech industries. They need to fix this specific problem of sexism by algorithm yesterday, but give them some time to make real changes to the broader industry.

Despite the ranting, David Heinemeier Hansson does have several really cogent points. He told CNBC that he doesn’t believe people with nefarious intent are at work at Apple or GS actively trying to oppress women and minorities. It is the algorithm that’s doing this and that and the poor support are what need to be addressed. He also stopped going in circles long enough to say that it is the absolute dependence on an algorithm, both for results and as an excuse for outcomes, that is the biggest problem. Also, he made it clear at the end of the interview that, rather than dump Apple over outrage, he is rather looking for them to do better and that he loves the advertised features that the Apple Card is supposed to bring with it. Apple should reward a person who could have easily raked them over the coals even worse with what he is asking for.

What about Goldman Sachs?

Ouch. They are swinging big for the fence in the consumer credit market and it will likely work out for them in the end. But this is a swing for the fence strikeout that left them on the ground in the dirt. It’s likely their algorithm. It’s mostly their customer support. They are newer to consumer credit, so their code may have flaws that haven’t been worked out yet. Oh, and this company already has credibility issues (as many other financial institutions do) dating back to the economic crisis of 2008.

We don’t know the nature of their contract with Apple for the Apple Card and don’t know how much say either has over an issue like this one. However, they are the bank and they will be the ones called to the carpet by the regulators, who are already looking into the matter. Apple should have caught this because its their name on the card, but Goldman should have because this is supposed to be their business and their specialty.

I again return to my Apple-AT&T analogy, as anyone who had an original iPhone or a 3G can remember how AT&T’s cell network buckled under the strain of the new device. Apple wasn’t to blame for their network problems, but that certainly didn’t stop people from complaining about the iPhone because of it. Sound familiar? Anyway, AT&T had to scramble to upgrade to meet the fast growing demand and it took years for them to get there. Hopefully Goldman won’t take that long, but it could be a bumpy ride for them for a bit.

What about Apple and Goldman Sachs’ partnership?

This is actually a double-edged sword for and against Apple. David Heinemeier Hansson may be wrong that this relationship is like Apple and Foxconn, but that actually makes it worse for Apple, in my opinion. If this were just a contract card relationship, Apple could sit back and put the spotlight completely on their bank as the culprits. They would be guilty of bad judgement, but that’s about it.

Because of their public partnership with Goldman Sachs, they own this problem in a more tangible way. This isn’t just some gimmick Apple rewards card. They have a huge influence over the operation of this card and they touted that at launch. This is a new and different kind of credit card. Yeah, now that claim is coming back to bite them.

Since we don’t know exactly where the line between Apple and Goldman sits, people are going to define it for themselves. Since Goldman is the bank, it is reasonable to assume that they are handling all card approvals and limits. However, many will just assume otherwise, even if it’s just to take some cheap shots.

What should the focus be on?

Again, just go back to Jamie Heinemeier Hansson’s blog post. If you didn’t read it with my link earlier, do it now. She nails it a lot better than I can say. The person who’s really at the heart of this story has handled it better than her husband or the media. She is 100% correct in how she assessed the situation, what was at fault for it, and what needs to change because of it. We need to demand more from tech companies when it comes to their algorithms and how they can define us. In this case, they can limit people’s access to credit. In China today, they are being used to limit people’s access to some basic services. We don’t think about how much influence similar black box algorithms have over our lives, but they are always there in the background, deciding our credit score, if we can get a card, a house, or who knows what else.

The thing about algorithms is, they were originally designed and coded by people. Whether we want to admit it or not, all of us have biases and preconceived notions. That’s part of what makes us human. The use of algorithms sounds like a great democratizer because it can be a way to limit or check our human biases. However, if we don’t take the time to examine how they are created and even the teams that create them, then we can just end up reinforcing existing problems and stereotypes.

It is very possible that is what happened here with the Apple Card. It could also be that Goldman is still relatively new to this and their algorithm still needs a lot of work. I think it’s likely some of both of these issues with some excuses and poor customer support mixed in. Whatever the reasons though, it’s time for Apple to apologize in public and tell everyone what they are doing to prevent this going forward. It’s their name on the card. Now it’s time for them to step up and own it.




James Rogers

I am a Christian husband and father of 3 living in the Southeastern US. I have worked as a programmer and project manager in the Commercial and Industrial Automation industry for over 19 years, so I am hands on with technology almost every day. However, my passion in technology is for mobile devices, specifically Apple's iOS and iPadOS hardware and software. My favorite is still the iPad.

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