Two-fifths of Apple’s shareholders defied its management and supported a proposal that would compel the iPhone maker to uphold freedom of expression globally and be more transparent in how it responds to Beijing’s demands to restrict certain apps.
Apple faced similar proposals in 2016 and 2018 that drew less than 10 per cent approval. This year’s ballot — which Apple tried to strike from the agenda — failed again, but this time only 59.4 per cent of those who voted were opposed.
The results send a “very clear message that Apple’s shareholders want it to do better on human rights”, said Sondhya Gupta, campaigns manager at SumOfUs, a consumer advocacy group that submitted the proposal.
Concern over how Apple coordinates with governments came to a head last autumn when Apple removed from the App Store a crowdsourced mapping application used by protesters in Hong Kong, just days after criticism from Chinese state media.
The proposal received broader support after the two major shareholder advisory groups, ISS and Glass Lewis, came out in favour.
Ms Gupta told the Financial Times she hoped Apple would “feel the pressure” to act. If it did not offer more disclosure related to how it complies with government requests to ban certain content, it risked being defeated at the next meeting in 2021, she said.
Apple has long said that it “must follow applicable law wherever it does business and believes in engaging with governments even when there may be disagreement.”
Ms Gupta called that reasoning “a fallacy”, saying there was no reason to think engaging with authoritarian governments was having a positive influence on them. “In the decade that Apple’s been operating in China the government has become ever more repressive,” she said.
“By agreeing to Beijing’s demands, Apple is complicit in the repression of Tibetans, Uyghurs and other activists, exposing it to huge reputational and business risks.”
Apple’s annual shareholder meeting was otherwise an upbeat affair. It focused on the group’s solid 2019 results, with no mention of how the group’s coronavirus-related revenue warning last week has wiped about $150bn from the company’s market value.
Chief executive Tim Cook called the coronavirus “a challenge” in prepared remarks, but none of the eight questions he took from shareholders touched on the issue. Instead, taking questions via an iPad, he fielded more benign queries such as why Apple does not buy the sitcom Friends for its TV streaming service.
Mr Cook did reveal that Apple would open its first retail store in India in 2021, something he said has been “years” in the making. He said the Indian government had wanted Apple to work with a local partner, but Apple had objected.
“We wouldn’t be a very good partner in retail. We like to do things our way,” he told the 1,000 shareholders gathered at the Steve Jobs Theater in Cupertino.
As for Friends, Mr Cook called himself a fan of the show but said Apple’s streaming service is about innovation rather than rehashing old content. “It wouldn’t feel like Apple,” he said. “We are going to focus on original programming.”