You mean like it could shut down any other market involving criminal actors, like the drug trade, if they wanted to?They should up it ten times, yes - and then the tax-payer should compensate them.
Because the government has created this very market and could shut it down any time, if they wanted to.
Yes, the government could probably lower prices by stopping to buy any vulnerabilities. They could make it more criminal by not participating. But they could not shut it down the same way the cannot shut down the market for other illicit goods like drugs.
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Apple could in principle probably raise prices so much that most criminals would refrain from buying because the reward for investment ratio is too low.It doesn't work that way. If Apple raised the bounty, they would just get in a bidding war with each new bug that is found as security researchers, criminals, intel agencies, etc., would just announce that they would pay more. Apple set a reasonable bounty for someone who wants to work with them; there is no practical or sensible way to try and outbid others every time someone finds bug.
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That worked so well in the drugs trade.Make selling vulnerabilities to third parties illegal and that will change the balance.