Washington DC-based tech industry group The App Association boldly describes itself as “the leading industry voice in the app economy” and says it represents more than 5,000 app makers and connected device companies in approximately 27 countries worldwide. What the App Association’s website doesn’t say is that more than half of the estimated $9 million in sponsorship revenue in 2020 came from one company – Apple.
That’s according to a recent Bloomberg article, which cites sources describing the group’s close financial relationship with Apple. These funds, in turn, shape the group’s influential political priorities from the shadows, according to Bloomberg. Tech transparency groups who spoke to Gizmodo claimed the App Association’s (known by its moniker ACT) relationship with Apple illustrates a broader trend of Big Tech’s covert infecting the politics of trade groups with an organization dubbing ACT “Astroturf lobbying group”.
In response to requests for comment from Gizmodo, ACT clarified that Apple is a sponsor and not a member of the organization, but further confirmed that the smartphone maker nonetheless contributed more than 50% of ACT’s sponsorship revenue in 2020. Other major sponsors listed on ACT’s website include Verizon, Intel, AT&T and Verisign. This figure of 50% leaves a lot of room for interpretation. Although ACT didn’t specify a specific dollar amount that Apple contributed, sources speaking to Bloomberg claimed that the total percentage coming from Apple’s coffers is well over 50%.
Speaking to Bloomberg, ACT executives firmly denied accusations that they are essentially acting as a front for Apple’s lobbying efforts. Executives said that when it comes to political positions, they will not be directly guided by Apple, but will consider the views of their key funders. Instead, ACT suggests that its policies may overlap with Apple’s interests on some issues.
Earlier this month, ACT released its top legislative priorities for the remainder of this Congressional term. These priority areas include broadband, telehealth and digital healthcare, cryptocurrency, privacy, tax policy, workforce development and education, and intellectual property. Given Apple’s immense size and scope, almost every one of these issues has a potential business impact.
ACT denies claims it is a ‘big tech front group’
Tech transparency groups speaking to Gizmodo don’t believe ACT’s breakup claims, redoubling skepticism about the relationship with Apple.
“Like Google, Facebook and Amazon, Apple was caught red-handed concealing its affiliation with yet another astroturf lobby group,” Sacha Haworth, executive director of the Tech Oversight Project, told Gizmodo. “Apple tries to curate their public profile, but they play just as dirty as their big tech co-conspirators.”
ACT has sided with Apple on numerous important policy decisions over the past several years, but perhaps the most significant of these followed the 2019 Supreme Court ruling Apple V. Pepper. In a 5-4 ruling, the court went against Apple and in favor of developers who claimed Apple was monopolizing the iPhone app market. In short, the confirmed developers claim that App Market consumers are “direct buyers,” meaning they have the right to sue Apple for price hikes or other disputes that fall under antitrust law.
ACT President Morgan Reed strongly opposed the ruling, saying ACT was “extremely disappointed” with the outcome. “This decision and its categorization of developers as ‘suppliers’ or ‘producers’ of platforms sets a disturbing precedent,” Reed wrote at the time.
“ACT, like the Developer’s Alliance and the Connected Commerce Council, is simply the latest organization to emerge as Big Tech’s front group,” Krista Brown, senior policy analyst for the American Economic Liberties Project, told Gizmodo. “It has taken a number of positions that penalize the developers it purports to speak for but aligns well with Apple’s agenda.”
ACT has taken numerous positions over the years that, according to Brown, “disadvantage[s] Developers it purports to speak for,” and all while necessarily aligning with Apple’s agenda.
In a statement sent to Karen Groppe, Gizmodo ACT’s senior director of global communications, the organization said the organization saw an increase in sponsorship revenue in 2020, along with its efforts to support privacy, broadband, and privacy initiatives advancing others aiming to help their members “navigate the early stages of the pandemic.”
“In terms of agenda, our members are driving the organization’s political and legislative agenda,” Groppe said. “It’s been happening since 1998.”
Groppe echoed ACT’s comments about Apple’s sponsorship donations relating to 2020, saying the organization would not comment on any more recent financial figures until the IRS releases its tax returns.
Apple’s feud with developers
Apple plays an important and increasingly complicated role in the mobile app economy. The App Store, along with Google’s Play Store, are the top two ways for app makers to offer their services to users. In exchange for this service, Apple charges a fee, or what some would call a “tax,” ranging from 15% to 30% depending on the app. This fee is under scrutiny from app developers like Epic, Spotify, and others who claim it’s unfair. Regulators in South Korea have even introduced laws preventing major platform owners like Apple and Google from forcing developers to use their own in-app purchase system, which many developers worldwide have derided. Apple has repeatedly defended its App Store policies in Congress and elsewhere to the extent necessary to maintain security and quality control on the platform.
Antitrust advocates like Bruce Schneier of the Berkman Klein Center for Internet & Society dismiss Apple’s argument.
“Security is a huge red herring,” Schneier said in an interview with Bloomberg. “It will scare a lot of people. The goal is to protect the monopoly.”
Regardless, the fact that Apple regularly squabbles with developers over its policies makes it all the more complicated for ACT, the self-proclaimed “industry voice” in the wireless economy, to seek undue influence from one of the industry’s key gatekeepers.
Apple did not respond to Gizmodo’s request for comment.
Big Tech’s increasingly creative approach to lobbying
Apple isn’t the only tech giant lurking in the shadows of the lobby.
In its Big Tech Wiki, the Tech Oversight Project cites numerous smaller industry organizations with known connections to large technology companies, citing groups such as the Connected Commerce Council and the Download Fairness Coalition, among others. One of those groups, the American Edge Project, which bills itself as a non-partisan non-profit base, was recently revealed to have received a $4 (6) million donation, allegedly in exchange for the staunch opposition to antitrust reforms The Tech Transparency Project. The report claims that Mets may have funded American Edge and even served as its founder.
Big Tech’s creative — or, depending on your perspective, more underhanded — lobbying approach is taking place amidst an absolute political spending spree. Bloomberg estimates that Apple, Amazon, Google and Meta have collectively spent $95 million ($132) on lobbying since 2021, a large chunk of which has reportedly gone into efforts to reduce upcoming antitrust legislation to an informal pulp to shred. For its part, Apple reportedly spent a record $2.5 million ($3 million) on lobbying in the second quarter of 2022. That may not sound absurdly high, but it’s worth noting that the number represents an almost 100% increase over the amount spent the same time last year.
Haworth of the Tech Oversight Project, whose organization advocates for tougher antitrust legislation, told Gizmodo Apple’s previously unknown ties to ACT are all the more reason to pressure lawmakers to press ahead with a vote on legislation that is at risk, among other Democratic priorities to be buried.
“Unless we rein in these tech monopolies, they will continue to cripple competition and bleed small businesses and startups dry,” Haworth said.
AELP’s Brown similarly said Apple’s ACT connections expose broader issues plaguing the industry and urged lawmakers to shine a spotlight on Big Tech’s alleged financial interference.
“It’s a clear example of how Big Tech money is driving much of the narrative in Washington,” Brown said. “It’s a serious issue, and lawmakers and enforcers would do well to keep this in mind when considering efforts to curb Big Tech’s power.”