Apple Flexes Muscle as Quiet Power Behind App Group

Apple Flexes Muscle as Quiet Power Behind App Group

(Bloomberg) — The App Association brands itself as the primary voice of thousands of app developers around the world. In fact, the vast majority of its funding comes from Apple Inc.

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The tech giant is not a member of the association. But he plays a dominant role behind the scenes in 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 closely aligns with Apple’s — even when it’s not at odds with app developers, the companies that make the games and individual programs that run on Apple’s iPhone and other devices. another.

The group, called ACT, says it is not seen by Apple, but confirmed that it receives more than half of its funding from the company. Former employees say the actual percentage is much higher.

The relationship between Apple and ACT shows how big companies quietly pour money into outside groups that advance their agenda in Washington. ACT representatives regularly testify in Congress, file court briefs to defend Apple’s positions and host annual developer “fly-in” meetings with legislators.

Rick VanMeter, a former congressional aide who heads the rival developer group Coalition for App Fairness, said the ACT’s purported representation of app developers is deceptive, given its relationship with Apple. “When you pretend it’s something you’re not going to make a point, that’s bad for the legislative process,” VanMeter said.

Cupertino, California-based Apple declined to comment for this story, but ACT executives defended the company’s role. The President of the ACT, Morgan Reed, said in an interview that it “doesn’t pass the laugh test” to say that the association is facing Apple.

“Our job is to make sure we’re paying attention to the way the government can influence, unintentionally or otherwise, all those small businesses that make cool software products,” Reed said.

Reed and other ACT executives said they decide policy positions based on the preferences of their members and do not take direction from Apple, although they do take Apple’s positions into account.

ACT spokeswoman 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 reached $9 million in 2020, according to the most recent data available from disclosure filings, suggesting that Apple makes a multimillion-dollar contribution.

Apple is a major force in the industry. Its App Store is a virtual marketplace for apps, a lucrative business for both developers and Apple. The company takes a 15% to 30% cut of app sales and paid subscriptions—that’s billions of dollars a year.

But many app developers oppose the fees and restrictions, which Apple argues are necessary so it can check systems to ensure the safety of its users.

Passing antitrust legislation in Congress would loosen Apple’s grip on the App Store and allow developers to circumvent the company’s cut. The measure, known as the Open App Markets Act, is supported by the Alliance 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 executive director Chelsea Thomas is a former lobbyist on Apple’s government affairs team.

“It’s important for us to understand what the big players in the ecosystem are thinking about policy issues so we can understand where the conversations are going,” said Thomas.

ACT’s work has drawn scrutiny from some of the biggest players in the developer world. Tim Sweeney, chief executive officer of Epic Games Inc., called Apple’s “fake ‘small app developer’ lobbying of society” in a tweet in June.

Epic Games, a member of the VanMeter Coalition for App Fairness, lost an antitrust case against Apple related to the App Store last year, but won on a claim of unfair competition and several counterclaims.

Both sides are appealing. ACT supported Apple in the case.

ACT’s website says it represents 5,000 developers and device companies worldwide, although 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.

Apple representatives and technology industry experts have given policy presentations to developers in the fly-in of the group’s annual conference. Attendees said ACT often shared talking points that aligned with Apple’s agenda before meeting with lawmakers and staff.

Some ACT members said they appreciate the sessions with legislators arranged by ACT, even if they don’t always agree with the group’s positions.

“Is it unreasonable to have a major donor whose position aligns and supports all the smaller contributors in this space?” said Thomas Gorczynski, ACT member and founder of software development agency DevScale.

But VanMeter, whose coalition also includes 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.

“There’s been a lot of confusion,” VanMeter said.

(Updates with details about App Store commission fees in the 11th paragraph)

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