The D.C. political class thinks it’s time to take a bite out of Apple
No, not the hundreds of millions of people who have their iPhone attached to them literally everywhere they go, or the tens of millions of people who have abandoned their laptop for an iPad, or the countless number of people who haven’t had to hit control-alt-delete since acquiring an Apple laptop or desktop computer, or even their competition — all of those people are fine.
But the D.C. political class is not.
As a matter of fact, the K Street lobbyists and career politicians whose livelihoods depend on America’s most successful entrepreneurs having to come to D.C. and kiss their… rings… have been frustrated at Apple’s refusal to play their game for a long time, and they think it’s about time Apple paid the piper.
Apple has historically spent comparatively little money on lobbying, choosing to out-innovate their competition rather than trying to get a leg up through favorable regulation or legislation.
According to POLITICO, Apple “spent less than $2 million on lobbying in 2012 — less than in 2011 — despite its being an election year. By contrast, Google spent $18.2 million, Microsoft spent $8.1 million and even Facebook laid out $4 million. After the first quarter of 2013, Apple’s lobbying expenditure was $720,000, a fraction of the $4 million by Google or the $2.45 million by Facebook.”
Apple doesn’t have a Political Action Committee and made no federal corporate campaign contributions during the entire 2011-2012 campaign cycle.
A federal judge recently ruled that Apple orchestrated a plan with other e-book publishers to “fix” the price of books sold in Apple’s iBooks store in an attempt to keep rival e-book seller Amazon from undercutting the market. Apple had previously refused to settle the case with the government even though the five other companies allegedly involved in the scheme opted to settle rather than going to trial. Apple ended up losing the case.
But apparently it didn’t have to go down like that. According to so-called experts interviewed by POLITICO, if Apple had spent more time and money building a lobbying presence in Washington, the government would have backed off.
“Politics is always in the background of these big cases,” University of Michigan law professor Dan Crane said. “In theory, the Department of Justice is supposed to be the law enforcement arm and separate from the White House, but just look at the amount of money being invested in Washington by Google, Facebook, Amazon, Microsoft, Intel. There’s a game to be played there that’s important. … Maybe because of this, Apple will realize the need to revamp their lobbying strategy and be a bit more calculating in that way.”
I’m not commenting on Apple’s guilt or innocence or any of the legal issues they’re involved in, but has it really come to the point that America’s most innovative companies have to come hat in hand to Washington if they want to be “allowed” to be successful?
“[Apple shows] a lack of respect for what happens in Washington,” corporate image consultant James Lukaszewski told POLITICO. “Being there expresses respect for the process and, as a matter of fact, for the country.” Lukaszewski went on to say that it is a “suicide strategy” for companies to ignore the D.C. political class.
All of this reminded me of a scene from Ayn Rand’s seminal novel “Atlas Shrugged” in which one of the main characters outlined some of the tell-tale signs that a society is in danger.
Here’s what Rand wrote:
“When you see that trading is done, not by consent, but by compulsion — when you see that in order to produce, you need to obtain permission from men who produce nothing — when you see that money is flowing to those who deal, not in goods, but in favors — when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you — when you see corruption being rewarded and honesty becoming a self-sacrifice — you may know that your society is doomed.”
Earlier this year Apple CEO Tim Cook did something his predecessor Steve Jobs never did — he testified before Congress. In his opening remarks Cook said, “You can some up Apple’s success in just one word: innovation.”
Unfortunately, it looks like innovation is not going to be enough for Apple and other companies to succeed in the U.S. marketplace in the future.