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Technology
APPLE FLEXES MUSCLE AS QUIET POWER BEHIND APP GROUP
* Company funds more than half of group’s budget, shapes goals
* Association chief says it backs the interests of developers
Photographer: Chris Delmas/AFP/Getty Images
By
Emily Birnbaum
+Follow
September 19, 2022 at 9:00 AM GMTUpdated onSeptember 19, 2022 at 4:38 PM GMT
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The App Association brands itself as the leading voice for thousands of app
developers around the world. In reality, the vast majority of its funding comes
from Apple Inc.
The tech giant isn’t a member of the association. But it plays a dominant
behind-the-scenes role shaping the group’s policy positions, according to four
former App Association employees who asked not to be named discussing internal
matters.
In fact, critics note, the association’s lobbying agenda tracks closely with
Apple’s -- even when it’s at odds with app developers, the companies that make
the individual games and programs that run on Apple’s iPhone and other devices.
The group, known as ACT, says it’s not beholden to Apple, but confirmed that it
derives more than half its funding from the company. The former employees say
the actual percentage is much higher.
The relationship between Apple and ACT illustrates how big companies quietly
pour money into outside groups that promote their agenda in Washington. ACT
representatives regularly testify in Congress, file court briefs in defense of
Apple’s positions and host annual “fly-in” meetings for developers with
lawmakers.
Rick VanMeter, a former congressional aide who is the head of rival developer
group Coalition for App Fairness, said ACT’s purported representation of app
developers is deceptive, given its relationship with Apple. “When you pretend to
be something that you’re not in order to make a point, that’s bad for the
lawmaking process,” said VanMeter.
Cupertino, California-based Apple declined to comment for this story, but ACT
executives defended the role of the company. ACT President Morgan Reed said in
an interview that it “doesn’t pass the laugh test” to say the association is
fronting for Apple.
“Our job is to make sure we’re paying attention to the way that government can
have an impact, unintended or otherwise, on all of those small businesses making
cool software products,” Reed said.
Reed and other ACT executives said that they determine policy positions based on
the preferences of their members and don’t take direction from Apple, though
they take Apple’s positions into account.
ACT spokesperson Karen Groppe declined to say how much of the group’s funding
comes from Apple other than to say it’s more than half. Contributions from all
donors topped $9 million in 2020, according to the most recently available data
from disclosure filings, suggesting Apple makes a multimillion-dollar
contribution.
Read moreTech Antitrust Bill Teeters Near Defeat After Lobbying Spree What to
Know in Washington: Big Tech Steps Up Gifts to LawmakersTech Giants Split in
Lobbying Brawl Over the App Store’s Future
Apple is a major force in the industry. Its App Store is a virtual marketplace
for apps, a lucrative business for both the developers and Apple. The company
takes a 15% to 30% cut of sales of paid apps and subscriptions -- representing
billions of dollars a year.
But many app developers object to the fees and restrictions, which Apple insists
it needs so it can vet the systems to ensure the safety of its users.
Proposed antitrust legislation advancing in Congress would loosen Apple’s grip
over the App Store and enable developers to circumvent the company’s cut. The
measure, known as the Open App Markets Act, is backed by the Coalition for App
Fairness.
But ACT opposes the bill, arguing it would threaten the privacy and security of
the App Store, echoing Apple’s talking points against the bill.
ACT’s executive director, Chelsea Thomas, is a former lobbyist on Apple’s
government affairs team.
“Understanding what bigger players in the ecosystem are thinking on policy
issues is important to us to understand where the conversations are going,”
Thomas said.
ACT’s work has also drawn scrutiny from some of the developer world’s biggest
players. Tim Sweeney, chief executive officer of Epic Games Inc., called the
association “Apple’s fake ‘small app developer’ lobby” in a June tweet.
Epic Games, a member of VanMeter’s Coalition for App Fairness, lost an antitrust
case against Apple involving the App Store last year, but did win on an unfair
competition claim and some counterclaims.
Both sides are appealing. ACT supported Apple in the case.
ACT’s website says it represents 5,000 developers and device companies around
the world, though Reed said the number of active members is smaller. In addition
to Apple, other corporate sponsors listed on its website are Verisign Inc., AT&T
Inc., Intel Corp. and Verizon Communications Inc.
The group’s annual congressional fly-ins feature policy presentations to the
developers by Apple representatives and tech industry experts. People who have
attended them said ACT often shared talking points that mirrored Apple’s agenda
before they met with lawmakers and staff.
Several ACT members said they appreciate the sessions with lawmakers arranged by
ACT, even if they don’t always agree on the group’s positions.
“Is it unreasonable that there is a major donor whose position also aligns and
supports all the small contributors in this space?” said Thomas Gorczynski, an
ACT member and founder of software development agency DevScale.
But VanMeter, whose coalition’s members also include Apple antagonist Spotify
Technology SA, said he assumed ACT was “the unified voice of app developers”
when he received materials from them during his time in Congress.
“They have sown a lot of confusion,” said VanMeter.
(Updates with details of App Store commission fees in 11th paragraph)
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