Apple sticks taxpayers with portion of costs for U.S. states’ digital IDs in Wallet app

Apple requires states to maintain the systems needed to issue and service digital IDs at taxpayer expense, according to contracts signed by four states. The agreement, obtained through public record requests from CNBC and other sources, shows that Apple maintains a high degree of control over the government agencies responsible for issuing identification cards, with “sole discretion” for key aspects of the program.
Driver’s licenses and state IDs in Apple Wallet provide an easy, fast, and more secure way for people to present their driver’s license or state ID from their iPhone or Apple Watch.
Hugh Son and Kif Leswing for CNBC:

Apple is making U.S. states foot part of the bill and provide customer support for its plan to turn iPhones into digital identification cards, according to confidential documents obtained by CNBC.
The company requires states to maintain the systems needed to issue and service credentials, hire project managers to respond to Apple inquiries, prominently market the new feature and push for its adoption with other government agencies, all at taxpayer expense, according to contracts signed by four states…
The move has brought questions from industry observers about why local authorities are ceding control of citizens’ identities to a $2.46 trillion private corporation. Beyond that, the integration of identity into powerful mobile devices has drawn concern from privacy experts about the risk of dystopian scenarios involving surveillance.
Apple has “sole discretion” for key aspects of the program, including what types of devices will be compatible with the digital IDs, how states are required to report on the performance of the effort, and when the program is launched, according to the documents. Apple even gets to review and approve the marketing that states are required to do.
The dynamic is similar to the way Apple typically deals with vendors, although instead of getting paid by Apple, the states have to shoulder the financial burden of administering the programs, according to Jason Mikula, a fintech consultant and newsletter author who obtained some of the contracts.
“It’s like a vendor relationship, which makes no sense to me because it’s the states that have the monopoly on what they’re giving to Apple, they could presumably negotiate a much more equal contract,” Mikula said in an interview.

MacDailyNews Take: Generally, government doesn’t know how to negotiate. This is likely because it’s not their money and they believe they can always get more, so there is no real impetus for government to negotiate like a business, to which the money actually means something. A tough, seasoned negotiator like Apple will dictate terms to overmatched politicians and government employees and laugh about it later.
The best minds are not in government. If they were, business would hire them away. — Ronald Reagan
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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
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