Jul 1, 2019

Tech companies push ethical boundaries to maximize profit

Illustration: Aïda Amer/Axios

A wave of recent scandals has focused on things that tech companies did that were legal, but nonetheless icky.

Why it matters: Companies are under constant business pressures to grow at all costs and squeeze revenue and profits wherever they can, but what seem like clever legal loopholes can backfire when customers find out. 

There are tons of examples of tech companies big and small doing things that were legal but looked bad. Here are a few...

DoorDash: The company's pay model since 2017 includes customer tips as part of the minimum amount guaranteed to its delivery workers (similarly to tipped employees such as waiters, although DoorDash's workers are not classified as employees).

  • Customers, though, were upset to learn their tips weren't always treated as additional earnings for the delivery workers. The company says it's trying to provide earnings in line with the work delivered while also providing a guaranteed level of pay.
  • Instacart previously used a similar model, as does Amazon's Flex program. 

Grubhub: Last week, a report showed that the company had been purchasing website domains with names similar to its marketplace restaurants and only including phone numbers and links that would route food orders through its service. (Meaning it would take a cut from all orders generated from the sites.)

  • The company told Axios that it had "created microsites for [restaurants] as another source of orders and to increase their online brand presence" as part of their contracts and "it has always been our practice to transfer the domain to the restaurant as soon as they request it." It no longer offers this.
  • OrderAhead was caught doing something similar in 2015. 

Facebook: Earlier this year, it emerged that Facebook had been paying users aged 13 to 35 to install a separate app that gave the social network deep access to their smartphones so the company could collect data about their activities. The news came as Facebook was already under fire for its treatment of user data. 

  • Apple promptly booted Facebook's app from its Enterprise Developer Program, meant for companies to internally test apps, for violating its rules. (Google had been doing something similar and was also briefly suspended from Apple's program).
  • Facebook pulled a similar Android app as well, but recently launched a new, similar program for Android users.

The bottom line: Following the law is important, of course. But it's not the only standard to which companies are and should be held.

Go deeper: What Apple, Facebook and Google each mean by "privacy"

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Mattis on Fox in Septemnber 2019 in New York City. Photo: Steven Ferdman/Getty Images

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Why it matters: Trump’s former defense secretary had refrained from publicly criticizing his former boss since resigning in 2018.