The Apple Watch, the Galaxy Fold, the iPad, VR headsets, voice assistants, and a whole lot more exciting tech has been birthed over the last 10 years, and we’re thankful for almost all of it. The transformative effect they’ve had on our lives cannot be overstated, blah, blah, blah.
Singing the praises, again, of all these great innovations is all well and good, but what about the flip side? What happened in the technology industry that generated scandals worthy of the tabloids, caused potential business-ending disasters, cost companies millions, or turned executives red in the face?
Now that’s much more interesting. You already know the Apple Watch is the best smartwatch out there, but do you remember Samsung’s Vice Chairman going to prison in 2018?
Yeah, thought that would get your attention. Let’s dig in, and see who our dubious “winner” is for the biggest tech scandals of the decade.
The explosive Samsung Galaxy Note 7
We’re kicking things off with a bang here! Sorry, we had to. After several Galaxy Note 7 phones exploded while being charged, Samsung was forced to end production and recall the ill-fated phone. It reportedly cost the company a whopping $5.4 billion once all was said and done. Even a few airlines banned onboard use of the phone. Such widespread publicity and proliferating reports seriously threatened to be the end of the Note series entirely. It was such a big story, we even had a guide on how to return your fiery Galaxy Note 7.
A disaster that would’ve crushed lesser companies didn’t end up affecting Samsung’s reputation, however, or Note fans’ thirst for new hardware. Samsung returned with the Galaxy Note 8, which was met with critical acclaim, emphasizing the work it had done to make the battery safer. Since then, the series has gone on to become one of the very best phones you can buy every year. Samsung eventually reissued the Note 7 as the Fan Edition, with crucial fixes to the battery, in some markets because people still just loved it so darn much.
Samsung’s vice chairman convicted on bribery
Although it made no difference to Samsung’s business financially, this was the definition of a scandal. It had everything: a billionaire executive and heir to the Samsung throne, political ties that went all the way to the top, horses worth millions used for bribery, and pictures of said executive in handcuffs being led away by the cops. What more could you want?
The story ran for months as detail after juicy detail was revealed. The end result was Samsung’s vice chairman Lee Jae-yong being arrested and sentenced to five years in prison in 2018, found guilty of bribing advisors to South Korea’s then-president Park Guen-hye, in order to cement his position at the head of the firm and gain approval for a key business merger. Again, like fallout from the Note 7, Samsung didn’t seem to suffer much.
Like almost all scandals, this one involved money. Lots of money. In 2014, Andy Rubin, the man who created the Android software platform left Google with a $90 million handshake and praise from the entire team, including chief executive Larry Page. In 2018, it came to light that Google had investigated Rubin for sexual misconduct, and found the accusations “credible,” the year before he left. Google, undeterred, swept this aside and the $90 million was paid out, in addition to a monthly installment of $2 million for four years. Google even invested in Rubin’s subsequent venture, Essential, too. The repercussions of the accusations against Rubin continued into 2019, when he teased the Essential Phone 2, and was met with pushback from industry observers, journalists, and other rightfully upset spectators.
For those seeking context, see this thread: https://t.co/MW4F0glvZA
— David Ruddock (@RDRv3) October 9, 2019
The ride-sharing firm has had too many scandals over the past ten years to list individually, or to single one out as “the worst.” From former Uber CEO Travis Kalanick’s less than savory behavior and subsequent resignation to Uber driver’s persistent complaints of pay to sexist remarks, spying on riders, suggestions to dig up dirt on journalists, and $20 million dollar fines over false advertising, Uber has done a great job of staying in the headlines — for all the wrong reasons.
Sony data hacks
Not one hack but several ensures Sony a position in the top ten. In 2011, the account details including names and addresses of 77 million PlayStation Network account members were stolen, leading to a shutdown of the service, and many unhappy gamers. Just months later, another hack exposed private information on those working in Sony Pictures, a part of the company that suffered again a few years later in 2014.
It was then that Sony Picture’s corporate email system was hacked, exposing both financial details and embarrassing emails, which among other things, revealed a disparity between pay for male and female movie stars. The bright side? Stupid comedy movie The Interview’s release was hobbled due to threats of terrorism against theaters that showed the movie.
Theranos scammed hundreds of millions of dollars
A startup with an astronomical valuation of $9 billion promised to conduct blood tests not with a needle, but with only the amount of blood collected from a finger prick. Except it couldn’t deliver, and apparently did everything it could to hide this fact as high profile investors, including Rupert Murdoch and Walmart heirs the Waltons (as well as partners like Pfizer and Walgreens) continued to pour money into the venture. Founder Elizabeth Holmes and her business partner are being investigated by the government for fraud.
Charismatic Holmes, like all eccentric Silicon Valley CEOs accused of crimes or otherwise, has stayed in the news due to the trial, and even received coverage after a surprise marriage. A movie is even being made about this twisty tale. Theranos’ story has not played out yet, but to get fully up to date with what has happened so far, read the fascinating book Bad Blood: Secrets and Lies in a Silicon Valley Startup for more.
VW faked emissions results
Scandalous corporate behavior at its absolute best. Or worst, if you like. Volkswagen eventually admitted, after investigations began in 2015, that it used software installed on its vehicles to fool tests carried out by government organizations into thinking its cars were considerably more environmentally friendly than they actually were. The company paid dearly not just in reputation, but also through compensation, fines, and a $20 billion hit on its company value. It’s still dragging on too, as the class action lawsuits in the U.K. only started at the beginning of December.
Breaking unbreakable windows on unattractive, angular vehicles is one thing, but having to pay a $20 million settlement in a case brought about by the SEC is another. Over what? Tweeting a throw-away joke about taking the company private, sending the stock tumbling, and therefore misleading investors. Tesla also got hit with a $20 million fine, and Musk had to step down as chairman of the company for a minimum of three years. Add in “pedo guy” comments, threats to start a website to rate journalists’ credibility, brushing aside analysts questions during earnings calls, and smoking marijuana during a live-streamed podcast, and you’ve got just some of the many reasons why Musk is one of the most divisive individuals of the past decade.
Yahoo data breach
A two-part security fail gives Yahoo the unwanted honor of the largest hack in terms of stolen accounts seen over the past ten years. Back in 2013 and 2014, data from three billion Yahoo accounts was stolen. Yes, three billion, or in other words, every Yahoo account there was. Names, addresses, passwords, and later, security questions and answers were all stolen — apparently by different hacking groups. Its tarnished reputation didn’t stop Verizon paying nearly $5 billion for the company in 2017, but it couldn’t shield Yahoo from an expensive class action lawsuit that’s still not settled today.
Data from 87 million Facebook users was illegally mined and used to allegedly manipulate the Presidential campaign in 2016, and the Brexit vote in the U.K., along with accelerating the alt-right’s accession to mainstream recognition. One of the most recent scandals on our list, the story behind it is still being told, and the long-reaching implications of how our data is used and abused may not have been fully realized either. Those interested in knowing more about how life has been changed by Cambridge Analytica and our online data can now read two books on the subject written by people directly involved.
It’s hard to choose, isn’t it? Liars, cheats, criminal convictions, drugs, theft, bribery, and quite a lot of very scummy behavior make this one of the most hard-fought shootouts we’ve ever held. So difficult in fact, that the decision has been made to give all those competing an award — making it a draw. Congratulations everyone, you should all be similarly ashamed of yourselves.