Apple accused of ‘strong-arming’ state legislators

From Emily Birnbaum’s “How the Apple lobbying machine took on Georgia, and won” posted Friday by Politico:

When Apple wanted to kill off two bills in Georgia this year, it rushed lobbyists to the state legislature, threatened to abandon key economic projects and persuaded the state attorney general to push for an Apple-friendly amendment.

Two months later, the bill that had appeared to have the most momentum stalled in the Georgia House Judiciary Committee. The committee chair did not bring the legislation to a vote during this year’s legislative session, effectively killing it in the lower chamber.

Apple’s aggressive lobbying efforts in Georgia, the extent of which were previously unreported, highlight a pattern that has played out with little national attention across the country this year: State lawmakers introduce bills that would force Apple and its fellow tech giant Google to give up some control over their mobile phone app stores. Then Apple, in particular, exerts intense pressure on lawmakers with promises of economic investment or threats to pull its money, and the legislation stalls.

“Apple has been able to intimidate and use a lot of money” to kill legislation, said Rep. Regina Cobb, a Republican state lawmaker in Arizona who championed an app store bill that didn’t pass her state’s Senate. Cobb said she has been closely following Apple’s playbook in other states. “They do it in different ways in each state, but it all comes down to strong-arming the legislature.”

My take: Not a good look for the owner of the great walled garden, but sometimes the moat needs shoring up.

20 Comments

  1. David Emery said:
    Without knowledge of the actual bills, it’s REALLY difficult to assess if Apple’s actions were appropriate. Some of the bills we’ve seen proposed are specifically targeted to Apple, or to a small number of companies including Apple. In that case, a concerted lobbying effort is most certainly an appropriate response.

    Of course, we rarely read about lobbying efforts by companies like Epic or even Facebook.

    6
    August 20, 2021
  2. An effective lobbying effort is a necessary defensive measure for any firm facing regulatory pressure. Big investors expect to see firms defend themselves in public forums. Steve Jobs resisted putting Apple Computer in government sights. Mr. Cook sees the value of engagement at state, federal and local levels. Lobbyists (READ: $) can quash poorly conceived legislation before it gets passed, avoiding expensive appeals.

    6
    August 20, 2021
    • John Konopka said:
      Apple has every right to defend itself. In a perfect world issues about corporate behavior would be debated in a public forum and fair rules would be enacted into law to guide corporate behavior. In a less than perfect world legislators with little knowledge of science and technology react to the headlines of the day in a clumsy attempt to be effective and corporations do their best to protect themselves.

      6
      August 20, 2021
  3. Gary Gouriluk said:
    Seems more like gentle persuasion than strong-arming.

    4
    August 20, 2021
  4. Fred Stein said:
    Quoting others’ accusations and inflammatory rhetoric does not help.

    Blumenthal’s comments were filled with baseless accusations and inflammatory adjectives. No proof.

    4
    August 20, 2021
  5. Fred Stein said:
    Proposed App Store regulation laws don’t make sense at the state level.

    IANAL, but a state-by-state patchwork of regulation would create confusion, challenges on constitutional issues, and put oversight of the regulation into hands of unqualified people.

    5
    August 20, 2021
    • Steven Philips said:
      Fred, so does legislation on the national level! 🙁

      0
      August 20, 2021
  6. Jerry Doyle said:
    “How the Apple lobbying machine took on Georgia, and won”

    “Poppycock!” This has little to do with Apple flexing its legislative influence prowess and everything to do with a spirit of edification on the part of good Georgian citizens recognizing poignantly that there is no public outcry relative to an alleged Apple’s abuse of its App store policies. We will see similar outcomes across State Legislatures in the coming months and years and also in the nation’s Capital.

    1
    August 20, 2021
    • Gregg Thurman said:
      there is no public outcry relative to an alleged Apple’s abuse[s]

      Exactly. You’ll know when the public is fed up, you’ll see it in the firm’s revenue, satisfaction numbers, and retention rate. Nobody has better stats than Apple.

      1
      August 20, 2021
  7. Microsoft’s lawyers are playing hardball in many places with the Epic suit including lobbying EU officials along with US state and federal politicians. This is corporate war for profit share.
    I have no doubt various proposed state laws attempting to attack App Store policies/policing were the result of those lobbyists pushing legislators to craft such laws. Were that many eligible voters really writing letters about Fortnite purchase restrictions? Tim Cook knows that and places his chess pieces on the board to thwart his opponent’s well-funded strategy.
    In other places the same combatants work together. Apple and other tech firms joined together years ago to lobbying for patent law reform. That effort is likely to be ongoing along with new efforts for AEV modifications to specific state and federal DOT regulations. That’s business as usual.

    3
    August 20, 2021
  8. Thomas Larkin said:
    This rant is just ridiculous, given the failure to acknowledge let alone recognize that this whole stupid cluster *&%$ was started by lobbyists for Apple’s many competitors in their various lines. Shameful, really, what passes for journalism these days. Microsoft, et. al v Apple in State Legislatures; you have to be brain dead to miss that one.

    2
    August 20, 2021
  9. Daniel Epstein said:
    Well in the excerpt of the Article Philip used the issue was supposed to be about lobbying in Georgia by Apple but there was a quote from a Republican Arizona lawmaker about Apple. No Georgia specific complaints. Poor journalism structure of an argument. That person from Arizona is calling it strong arming! No proof is offered that Apple was doing anything different from other lobbying done by an organization who has the resources to have a multi state effort. And I think individual state regulations make no sense for this technology. MIght as well have different state by state coverage of cell service types.

    3
    August 20, 2021
    • Daniel Epstein said:
      I just had to Pull this quote from the article.
      “Apple’s hard-charging tactics attracted national attention in Arizona and North Dakota, but the approach has also been effective in smaller states such as Louisiana and Georgia.”
      Smaller States? Georgia and Louisiana
      Really who is editing this? Using Size instead of population as the criteria. What a hoot.

      A Quick search By Population Georgia is 9th ,Arizona 16th, Louisiana 25th , North Dakota is 48th
      By physical Size Arizona 6, North Dakota 19th, Georgia 24, Louisiana 31,

      2
      August 20, 2021
  10. Gregg Thurman said:
    Emily Birnbaum: Another click seeking airhead.

    Emily should ask herself: Is the problem that entities seek to influence legislatures, that APPLE may have sought to influence a legislature, or is it that your clicks have dropped below your paycheck requirement?

    0
    August 20, 2021
    • Gregg Thurman said:
      I wonder how bills are introduced, knowing they’ll never become law, just to get the attention of lobbyists (and by extension campaign contributions)?

      1
      August 20, 2021
      • Dave Ryder said:
        @Gregg, at the risk of being too skeptical, I also wonder about the motives.

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        August 20, 2021
  11. Michael Goldfeder said:
    A billion+ happy customers that never complain about being an Apple user or enjoying the peace and tranquility of being part of the “walled garden.” Yet it’s the renegades like Epic and Spotify that want to bill customers, mostly minors, directly and outside of the governance of Apple or their parents.

    The reason I enjoy being part of the protected Apple ecosystem is that anytime I want to dump an App, it’s done! We all remember trying to get ahold of customer service for any internet provider and cancel a subscription service back in the day. They never provided a 800 number that had an actual live person, or their email was a straight dead drop with no response ever being received.

    Never a problem with Apple leading the way as getting service through them is faster than a Sandy Koufax or Nolan Ryan fastball!

    As for these “lobbying efforts”, Epic and probably their stalking horse were the purveyors of extremely miscast State Bills that run afoul of the US Constitution’s Commerce Clause. Which explains why they were kicked to the curb in the first place. Any action needed ought to be brought by a State’s AG.

    We’ll see how the multi-state actions against Google by various State AG’s ends up being played out. My hunch is a settlement will be extracted which just exposes all of this as a Money grab shakedown lawsuit from the inception. The playbook derived from Vestager and the EU.

    3
    August 20, 2021
    • Gregg Thurman said:
      We all remember trying to get ahold of customer service for any internet provider and cancel a subscription service back in the day.

      I just had that problem with a firm called 3BSC (credit reporting firm). At the end of the free trial, I tried to cancel my subscription. Three months later (and 3 auto-billings) I went to my bank with a first full of cancellation screenshots and emails to their customer “service” email address. My bank stopped the auto-pay and got 2 of my auto payments refunded.

      0
      August 20, 2021
  12. Bart Yee said:
    Strong arming? You mean a company doesn’t have the option of advocating for its position regarding legislation or policy that affects it? I would rather companies advocate rather than throw money at legislators’ campaigns or pacs. That maybe Apple has dangled jobs and investments (or threat of withholding same) in that state or region isn’t a new tactic, illegal, or unusual, see any pork barrel legislation ever debated, inserted, or passed. While I would like to believe Apple’s versions of lobbying is maybe cleaner or logical, I’m not naive to think Apple can and does use legal lobbying or informational campaigns that are allowed by law. No reason not to.

    Plus Apple, like any company, should be able to advocate for it business segments. The App Store has many many similar business precedents that it is based upon, both in tech and many other retail industries as we have pointed out on PED 3.0. Most of those existing parallels are still quietly in place today, with matching or higher costs to those who wish to use them – Apple has not decided bring these parallels out lest they be pointed out as the big company who disrupted someone else’s business arrangements that seem mutually beneficial AND agreed upon (grocery store products, shelf placement, exclusives, car dealerships with exclusive, regional business maps to the exclusion of competing same source/brand dealers, etc., etc.

    All of these App Store critics want to use Apple’s created platform without paying the freight. They have the alternative of using Android, creating their own hardware platform and building that user base to exclusively serve and monetize or work with PC operating systems and create apps for them, there lots of alternatives. But if you want access to everything that Apple has taken 14 years to create, nurture, build trust, security, and safety by its policies and management, then pay the dues and work together. Don’t want to pay the dues, then go elsewhere and good luck. Companies all over the world decline to work with others all the time.

    0
    August 21, 2021

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