TTP Investigation: Inside Apple’s Push to Kill State App Store Bills
FOR IMMEDIATE RELEASE: September 7, 2021
Contact: Michael Clauw, firstname.lastname@example.org, 202.780.5750
WASHINGTON, D.C. – Today, Campaign for Accountability (CfA), a nonprofit watchdog group that runs the Tech Transparency Project (TTP), released a report revealing details of Apple’s aggressive, behind-the-scenes lobbying campaign to derail state legislation that threatened its tight control over the App Store. TTP examined hundreds of previously undisclosed emails, obtained from state governments through open records laws, that illuminate the range of tactics used by Apple to thwart bills in Georgia, Arizona, North Dakota, and other states. The tactics included swarming the states with lobbyists, some of them unregistered; warning state officials about costly litigation should the bills pass; and leveraging the controversial right-wing group ALEC to sway lawmakers in Republican-controlled legislatures.
CfA Executive Director Michelle Kuppersmith said, “These communications show that Apple is clearly willing to use thinly veiled threats and appeals to political expediency in order to preserve its stranglehold over App Store developers. Both state and federal lawmakers should be aware of these tactics and stand ready when Apple’s lobbyists inevitably come knocking.”
TTP’s findings, recently shared with Politico, showed how Georgia was a major target for Apple’s lobbying efforts, after lawmakers there introduced a pair of app store bills in February. The measures allowed iPhone users to load apps from outside the App Store—and prohibited Apple from forcing app developers to use its payment processing system. Within a week of the bills’ introduction, a trio of lobbyists made Apple’s displeasure clear to the office of Georgia’s Republican attorney general, Christopher Carr, according to emails reviewed by TTP. In one email, Apple lobbyist Rufus Montgomery warned the AG’s office that the “passage of these bills would put the state in a legal bind,” suggesting the state would face an onslaught of litigation.
The pressure appears to have been effective. On Feb. 26, a legislative analyst emailed a revised version of the bill to the AG’s office, saying, “I know you were getting questions on it. Let me know if this new version alleviates concerns or creates new ones.” A comparison of the original bill and revised draft shows that an entire section had been removed that would have prohibited Apple from forcing developers to use its payment processing system—a significant weakening of the legislation. According to Politico, Apple lobbyists also told state lawmakers the company would pull out of two major investments in Georgia if the measure passed. In the end, the bills failed to advance during the legislative session.
Notably, two of Apple’s lobbyists who took part in these efforts—Tyler Stephens and Matt Konenkamp—did not register with the state of Georgia as required by law. Stephens is not listed in the Commission’s lobbyist registry in 2021 or 2020. Konenkamp is likewise not registered as a lobbyist in Georgia, but he is registered as an Apple lobbyist in North Dakota. Both told Politico they had not spent enough time lobbying in Georgia to meet the threshold for registering, but as TTP has noted, time is not the issue under Georgia law.
TTP found a similar dynamic in other states including North Dakota, where proposed legislation would have forced Apple to allow competitor app stores on its devices and let app developers use alternative payment processing methods. TTP’s investigation found that Apple lobbyists, in their effort to kill the bill, cozied up to conservative groups to appeal to the state’s Republican-controlled legislature. Of particular note: the lobbyists brandished a letter opposing the legislation from the American Legislative Exchange Council (ALEC), a “bill mill” that’s pushed numerous right-wing policies at the state level, including climate change denial.
The investigation found Apple lobbyists using the same tactic in Arizona as that state considered its own app store legislation. On Feb. 15, Apple lobbyist Stuart Goodman sent the ALEC letter – still addressed to North Dakota lawmakers – to the chairman of the Arizona House Commerce Committee. He explained that in the interest of time he was sending the North Dakota version “given the similarities between the two bills.”
Despite these efforts, the Arizona House narrowly passed the app store bill in March by a vote of 31 to 29, and it then moved to the Senate. But Apple had meanwhile tripled its lobbying force in Arizona. On March 11, Goodman sent another legal analysis to chair of the Arizona Senate Commerce Committee, describing the app store measure as “susceptible to legal challenges,” another not-so-subtle hint of what might await the state if lawmakers passed the bill. Later that month, the Commerce panel tabled the measure by unanimous voice vote.
Ms. Kuppersmith continued, “Apple’s state lobbying tactics paint a clear picture of how the company will likely approach the recently announced federal, bipartisan bill that seeks to break its hold on in-app payment systems. Federal lawmakers must recognize this outsized corporate influence for what it is and stand by the convictions that led them to introduce this legislation.”
Campaign for Accountability is a nonpartisan, nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.