Apple is flexing its muscles as a quiet force behind the apps team

Apple is flexing its muscles as a quiet force behind the apps team

(Bloomberg) — The App Association is billed as the leading voice for 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 behind-the-scenes role shaping the group’s policy positions, according to four former App Association employees who asked not to be identified discussing internal matters.

In fact, critics note, the association’s lobbying agenda closely follows Apple’s — even as it clashes 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 is not owned by Apple, but has confirmed that it gets more than half of its funding from the company. Former employees say the real rate is much higher.

The relationship between Apple and ACT shows how big companies are quietly pouring money into outside groups that push their agenda in Washington. ACT representatives regularly testify before Congress, file lawsuits to defend Apple’s positions, and host annual developer “fly-in” meetings with lawmakers.

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

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

“Our job is to make sure we’re paying attention to how the government can have an impact, unintended or otherwise, on all these small businesses that make nice software products,” Reed said.

Reed and other ACT officials said they set policy positions based on their members’ preferences 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 topped $9 million in 2020, according to the latest available disclosure filings, suggesting Apple is making a multimillion-dollar contribution.

Apple is a major force in the industry. Its App Store is a virtual marketplace for apps, a profitable business for both developers and Apple. The company takes a 15% to 30% cut of its paid app and subscription sales — which represents billions of dollars a year.

But many app developers oppose the fees and restrictions, which Apple insists it needs so it can control systems to ensure the safety of its users.

Proposed antitrust legislation moving through Congress would loosen Apple’s grip on the App Store and allow developers to bypass 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 in Apple’s government affairs team.

“Understanding what the biggest players in the ecosystem are thinking about policy issues is important for us to understand where the conversations are going,” Thomas said.

ACT’s work has also attracted scrutiny from some of the biggest players in the developer world. Tim Sweeney, CEO of Epic Games Inc., called the association “Apple’s fake ‘small app developer’ lobby” in a June tweet.

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

Both sides appeal. ACT supported Apple in the case.

ACT’s website says it represents 5,000 developers and device companies worldwide, 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 briefings to Congress include policy presentations to developers by Apple representatives and technology industry experts. People who attended said ACT often shared talking points that reflected Apple’s agenda before meeting with lawmakers and staff.

Several ACT members said they appreciate the meetings with lawmakers that ACT organizes, even if they don’t always agree with the group’s positions.

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

But VanMeter, whose coalition members also include Apple rival Spotify Technology SA, said he assumed ACT was “the unified voice of app developers” when he received material from them during his time in Congress.

“They’ve sown a lot of confusion,” VanMeter said.

(Updates with details on App Store supplies in paragraph 11)

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