Apple not paying off politicians might be costing them in the courts

Apple not paying off Washington might be costing them in the courts

Apple spends far, far less time and money lobbying and otherwise making nice with Washington politicos than their competitors like Google and Amazon. That lack of pragmatism might be costing them in recent DOJ investigations and court proceedings, at least according to Steve Friess at Politico:

The company marches to its own iTunes, spending little on lobbying, rarely joining trade associations and, in a pattern that’s become more pronounced this summer, refusing to negotiate or settle in many lawsuits.

Experts say Apple’s tried-and-true approach is starting to backfire, as the company has already taken at least one big hit in a high-profile e-books trial. A recent landmark D.C. appearance by CEO Tim Cook may reflect a new reality for Apple: that direct engagement with lawmakers, regulators and rivals is more effective than trying to remain above it all.

Back-room dealings and old-boys-clubs is likely nothing new in Washington, but clearly also a game Apple's not used to playing. As distasteful as it is, Apple's odds of escaping unscathed with their relative innocence intact must be nearly zero. Like John Gruber of Daring Fireball says:

In other words, word on the street in Washington is that it’s a shakedown, pure and simple. The smart move for Apple would be to just pay up, but that’s sad.

As good as Steve Jobs made Apple in product, and as good as Tim Cook made them in logistics, they need someone who can make them just as savvy in political machinations. Maybe a laser-focused "executive chairman" all their own?

Source: Politico via Daring Fireball

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, ZEN and TECH, MacBreak Weekly. Cook, grappler, photon wrangler. Follow him on Twitter, App.net, Google+.

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There are 33 comments. Add yours.

Shameer Mulji says:

As the old saying goes, you have to fight fire with fire. It is sad but sometimes necessary.

BB fan forever says:

Does this mean Apple might be getting sued? Yes i use Blackberry but i also use a Ipod Touch.

Jonathan Hilovsky says:

They already did for the ebooks thing. But if some of the stories can be believed it doesn't effect is adversely.

Sent from the iMore App

Jonathan Hilovsky says:

Us. Damn auto correct somedays.

Sent from the iMore App

icebike says:

Wait, Apple pretty much skated on the ebook issue leaving the publishers holding the bag for all the fines and penalties. Not a cent paid by Apple.

Then they get the president to order the overturn of the import ban on older devices. When was the last time you heard about the president getting involved over ruling bans?

So I'd like to know the basis for this whole story! It seems to me like Apple can go to the well anytime they want. The only way that works is if they've bought and paid for the privilege well in advance.

Rene Ritchie says:

They didn't get the president to do anything. The egregious misuse of FRAND patents in court, and the ITC not stopping it, forced the first presidential action in decades.

Unless you want to live in a world where companies deceitfully offer patents in contribution towards standards only so that they can get more money when they later violate the spirit and sue?

(And this relates to something totally different than that - read the linked article.)

Solamar says:

My understanding is this particular patent is under review of if this should be considered standards essential for FRAND? .. but your correct. ITC should have at least waited for that decision prior to issuing an order to ban sales.

IMO they should have reviewed current payor's of the license and issued a fair ruling to pay the license based on what current licensee's pay and been done with it. It became so much more complicated and polarized than it should have been.

Nature of the political beast?

Solamar says:

bit by spell check again..
bane=ban, that=than..

Dev from tipb says:

As has been pointed out in multiple articles now, the ITC found that

a) the patent in question may not have been FRAND licensed at all

b) even if it was, after utilizing the patented technology without a license for such an extended period of time it becomes incumbent upon Apple to show that the patent holder (Samsung) has negotiated in bad faith. And the ITC held that Apple offered no compelling evidence in that regard.

You can assert to the contrary all you like, or you could read the actual court documents.

Ian Batterham says:

Rene, your Apple fantasia is showing. Stick to the facts. The court found Apple would NOT come to the table and negotiate even though the patents were believed NOT to be FRAND.
Anyway, they obviously paid Obama enough!

Why bother with lobbying when you own the President?

MastrMeatWad says:

Agreed. If someone didn't know how Apple does business in regards to patents, avoiding taxes, and labor issues they may think Apple is more ethical than Google and Amazon. It is about the cash, and that is expected. I am sure Apple will do whatever they feel they should do for the mighty dollar, ethical or not. Perhaps they believe it behooves them not to spend wads of cash on lobbying? Apple continues to sell devices like crazy and last time I checked is doing extremely well.

Stopov says:

Not true, and besides why should Apple re-license a product already licensed by the makers of the Baseband chip in question?
Samsung was trying to "double license" a very minor bit of code for 2.5% royalty of an iPhone retail price!
Outrageous, get the true facts before you speak or lie for Samsung.

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Heremyjopke says:

So apple is supposed to be like the rest of big "corrupts" and pay of the government?? Screw the government and everyone in it. Apple shouldn't have to pay of any one no companies should. This is how bs our justice system has become that u have to pay ppl off to get something your way. How about what ever is right? How about following rules. Cannot believe this is a topic of decision especially w that tittle. This just shows how screwed up and corrupt our government is and ppl like who ever wrote this and agrees is just ganna let it happen and think its ok.

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abazigal says:

Sometimes, even good people must make hard decisions. Otherwise, evil will always win, because can and will do anything.

Gadheilweil says:

Didn't Washington just lift the ban on an apple product?

ernbrdn says:

Sensationalism at it's finest. I wish Apple would just release a new product already so everyone would just quit trying to make themselves seem important. Face it Apple news really is non existent except maybe 3 or 4 times of the year. The time in between is just who can make up the biggest most sensational story.

Rene Ritchie says:

Politico is sensationalism?

sting7k says:

I think he means your headline.

kch50428 says:

Politico is often 'senseless-sationalism'.... :)

cc3d says:

I am sure Apple greases the wheels just like everybody else. If you think the largest tech company in the world doesn't send some of that money towards political maneuvering, you are truly naive! There is no way that any blog writer could or could not verify this.

iSRS says:

Rene didn't say they didn't. Just not to the tune of the others.

April 2012

"So just how big is Google's lobby? With a lobbying budget of $5.03 million in Q1, Google surpassed Verizon at $4.51 million and Comcast at $4.55 million, and is now one of the biggest lobbies in Washington by total spending — at least for this quarter. By comparison, AT&T spent $6.84 million, Microsoft $1.72 million, Facebook $650,000, and Apple $500,000 in Q1 2012. Considering that Google has more than quadrupled its quarterly lobbying spend since 2009 with increases every quarter, it's plausible that the company could at least double last year's lobbying spend of $11.42 million in 2012, which would put it on par with AT&T, ConocoPhilips, BlueCross / BlueShield, and the American Hospital Association — companies with annual lobbying budgets that ranked in the top-ten in 2011."

http://www.theverge.com/2012/4/23/2968686/google-joins-lobbying-elite

April 2013 (I personally like how a $220K YoY increase is "hitting the gas"):

Meanwhile, Apple hit the gas on its Washington work by spending $720,000 in the first quarter. That’s a pittance compared with others, like Google, but still a noteworthy increase for a company that’s long approached the Beltway with reluctance. Amazon and eBay posted similar upticks as they went to war over sales tax legislation.

Read more: http://www.politico.com/story/2013/04/technology-facebook-apple-ebay-ama...

But don't let facts get in the way of your comment. There is no way in the world anyone commenting on a tech blog couldn't verify this...

Etios says:

LMAO, Hilarious article just after the presidential veto scam, Only Obama and his cronies know how much Apple paid to get that veto.

richard451 says:

It is a sensationalist headline and even Gruber has backed down from the article. This line is too much and shows a bit of ignorance; "Apple spends far, far less time and money lobbying and otherwise making nice with Washington politicos than their competitors like Google and Amazon. "
Since all this data is public (thanks opensecrets.org), let's see the data for 2012;

I decided to toss Samsung in the mix because they are the primary foe against Apple in the courts and the summation is that Apple not spending in washington is costing them in the courts (if you are asking "why didn't politico/gruber/imore include samsung?", you will see in a moment).

-Campaign Contributions: Apple: 620k. Amazon: 541k. Samsung: 3k. Google: 3.8m (!).
-Lobbying Costs: Apple: 1.97m. Amazon: 2.5m. Samsung: 900k. Google: 18.2m (!).
-The number representatives who hold stock in each respective company; Apple: 35. Amazon: 9. Samsung: 0. Google: 23.

Not exactly "far, far less time and money" with regard to Apple v Amazon/Google. In fact Apple seems to be playing the game just fine and the only story is Google took the game to a whole new level. The other odd part is that Samsung doesn't even participate (there may be a law that limits them).

When the truth hurts the path towards acceptance usually leads to blame of others. What's sad is an article like the politico one should be shot down by instead of spreading the ignorance propagate to pump up the faithful.

rogifan says:

Where did you get campaign contributions for Apple? Were those by Apple the company or employees who work o Apple? Apple doesn't have a PAC.

richard451 says:

Opensecrets.org (it was in my post). All those numbers are for corporations.

Adem Reka says:

Well done. This pathetic naive fanboy article should be deleted. Rene has naive love for Apple.

Stopov says:

He's a reporter for an Apple blog.
You expect the writers on the Android blog to write smack about android?
You are the one who obviously belongs on another blog. It's like you would expect Rush Limbaugh to write with a liberal basis on a conservative blog.
Either you on of Sammy shills or just a H8tr.
Here's a hint for you, people here LIKE Apple, if you have a problem with that perhaps you should visit a blog which reflects you interests as it is obvious you don't like Apple and therefore don't belong here.

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Fumetsu says:

This infers that our legal system, which at the Federal level consists of appointed rather than elected judges, is influenced by lobbying of elected officials - which it is not.

What is costing Apple in the courts is its anticompetitive actions in the eBook scandal, and its decision to fight rather than settle even with ample evidence against it. The DOJ would have brought it's case against Apple regardless of its lobbying amount because what Apple did was illegal, as anyone who followed the case and understood the law would agree.

Frankly, Apple needs to stop litigating its competitors and start innovating because its lawsuits are accomplishing nothing but gathering bad press. If all the press about Apple is related to lawsuits and not about its products then people will start associating it not as a "cool" tech company but as a stodgy lawsuit-driven corporation. As a former shareholder, it was a clear indication that growth was going to stall and the company would stagnate in innovation and become more like Microsoft, relying on rehashing the same portfolio of products with minor iterations rather than producing anything new and market changing. Thankfully I got out while i was still in the green before the massive erosion in its stock price.

Dionte says:

If I could afford to I'd buy them and implement mandatory recycling programs across the country.

Winski says:

So Rene, are you recommending that Apple start paying off politicians?? You DO realize that that practice is ILLEGAL, right?? I know the rules are a bit different in Canada but basic right and wrong is kinda universal. You might wanna re-think this public position you seem to be staking out since a number of Americans are actually UNDER INVESTIGATION by Federal agencies for this exact practice.

vinny jr says:

Oh Boy Rene you should be hired as Apple's spin doctor. Apple was the recipient of the first time a President ever got involved in the tech world. Rene, you should go over your facts before laying out this bunch of bologna that only the deep rooted fan boys would suck up. This is just totally ridiculous. As of late your editorials have been missing many facts. My only conclusion is you are leaving these facts out on purpose. You are not stupid so I will not insult you but come on. You led your readers on the new Google feature that it is on all the time without a way of shutting it off in the settings. The fact is, that feature can be turned on or off in the phone's settings, the way it should be designed. Every reader that made a comment had the same response, "would be good if it could be turned on and off". Now today you are telling your readers that Apple doesn't grease any Politicians palms. PLEASE---------------.

Timelessblur says:

Rene this article is beneath you. Siting Daring fireball as legit is even worse as that site is 100% pure Apple fanboy rage so to many anything from there is worth less than the stuff I flush down the toilet.

To me this entire article is pure fanboy and should of been avoid as it just degrades you and the entire site. Lets face it Apple is pretty bad in how it treats others and is one of the least trust worthy companies to do business with.
Apple got nailed because they were illegally doing stuff and were the key player in the ebook issue. remove Apple and none of that would of happened.

Carioca32 says:

I think a good point can be made when a company does not lobby at all out of principle, but clearly that's not the case with Apple. It does have a lobby budget, so the only argument that can be made is that Apple is incompetent when lobbying, which, BTW, is a perfectly legal activity.

I think it is disingenuous to try to portrait Apple as morally superior just because it spends less on lobby.