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Both Google and Apple are trying to sway members of Congress to give them preferential treatment

Apple, Inc. (AAPL) iOS versus Google Inc.'s (GOOG) Android launched with similar mindsets -- upsetting the status quo of the mobile phone industry and becoming the world's most used smartphone platform.  Both platforms have achieved that goal to a large extent, but as the company's each borrowed ideas from the other and changed their product to mimic the other's successes, bitterness grew between the pair. This bitterness eventually exploded in a worldwide patent war, a war which consumes Apple, Google, and the companies that rely on Google's operating system.

I. Dividing the Enthusiast Community

The ongoing "nuclear war" between Apple and Android deeply divides the enthusiast community.

IPhone owners tend  to defend Apple's right to litigate, arguing that Apple's iconic iPhone defined what a "smartphone" meant, a model closely followed by subsequent Android devices.  

While only the most extreme truly wish for a complete ban on Android handsets, Apple fans are swift to point that Apple was not the first smartphone giant to start internation litigation (that was Finland's Nokia Oyj. (OMX:NOK1V) in 2009, who ironically sued Apple) and that some smartphone makers followed the look and UI layout of Apple closer than others.

Steve Jobs
Steven P. Jobs' dying wish of "thermonuclear war" with Android is dividing the nation.

Android owners, meanwhile, balk at the idea of a ban on the world's best-selling smartphone platform, accusing Apple of malfeasance.  They point out that Apple didn't "invent" much of its innovations (multi-touch, Gorilla Glass, Retina displays, etc.), it bought them.  

They also point to Apple turning to copy some aspects of Android (the notifications bar, and soon -- potentially -- the larger screen size).  Lastly, they point to Apple's own history of liberally "borrowing" operating system ideas from others like Xerox Corp. (XRX) then later settling without caustic measures such as sales bans.

II. Tim Cook Goes to Washington

But for better or worse the hostility between the pair shows no signs of easing with the largest Android manufacturer Samsung Electronics Comp., Ltd. (KSC:005930) reaching an impasse in settlement talks with Apple, leading both companies' CEOs to walk out on negotiations regarding a potential cross-licensing truce.

Apple CEO Timothy Cook was in Washington this week, meeting with lawmakers in an effort to emphasize his company's importance to the American economy.  While the patent strife was not directly discussed, it's clear such discussions could steer decisions on potential product bans on a federal level.

Tim Cook
Apple CEO Tim Cook chats with Rep. Boehner(R) [Image Source: Rep. Boehner]

The visit was unusual as Apple spends only a small amount on government lobbying, despite enjoying some of the perks of typical heavy lobbiers, such as liberal tax exemptions.  Despite claims of government favoritism, Apple only spent $500,000 USD on lobbying in Q1 2012, about a tenth of what Google spent.

Apple also does not have a political action committee (PAC) to funnel larger donations to candidates via fund-raising events.  Google and others maintain large PACs.

If appearances are accurate, Apple did much with little in terms of lobbying.  In modern U.S. federal politics where money (effectively, bribes) are necessary to purchase almost any sort of bipartisan action, Apple's contributions were small and selective.  Apple also relied on its late CEO Steven P. Jobs fame and close relationships with top U.S. officials, including President Barack Obama (D).

But Apple is wising up to the fact that in order to defeat lobbying giant Google, it may need to change to more of a standard corporate lobbying footprint.  In Washington, D.C. Mr. Cook reportedly met with House Speaker John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.), and Senate Minority Leader Mitch McConnell (R-Ky.), leaders on both sides of the aisle that control Congress.

The Apple leader emphasized points that hit close to home.  For example he chatted with Minority Leader McConnell about how his iPad and iPhone use glass that's produced at a Corning Inc. (GLW) plant in Kentucky (of course, so are Android phones' screens).

The talk of domestic production reminds the federal government of the pressure to avoid a U.S. International Trade Commission ban on imports of the iPhone and iPad (Samsung, new Google unit Motorola, and HTC Corp. (TPE:2498) all have pending ITC complaints against Apple, seeking injunctions).  Wit that said, Mr. Cook reportedly avoided explicitly discussing the court battle or import battle at the ITC.

Of course, such visits also could behoove Apple in terms of getting further tax favors, though the timing suggests possible ties to the Android patent dispute.  (Google's efforts have also focused heavily on greasing the wheels to lower taxes.)

And then there's Apple's troubles with the U.S. Department of Justice over alleged e-book price fixing.  The DOJ is actively suing Apple, claiming it sought an e-book monopoly.  Apple has vigorously denied these accusations.  Some friends on both sides of the aisle could encourage the DOJ to compromise and avoid punitive litigation.

III. Apple Follows in Google's Footsteps Becoming Begrudging Lobbyist

Reportedly Mr. Cook is interested in expanding Apple's lobbying efforts, something his predecessor Steve Jobs frowned upon.  A source speaking to Fortune comments, "They were quiet and focused. There was no public statement, no press conference, no hoopla, just like the company, which is focused on product design and end results.  [Cook] has a strong personal interest in policy issues and recognizes the role an engaged CEO can play in making a difference on those policy priorities."

A Congressional aide added, "It was an act of opening up a line of communication, but it was a first step in what hopefully will be a growing relationship. They didn't become best buds in one meeting."

Bribes
[Image Source: Business Ethics]

Google, like Apple, wasn't always so politically vociferous.  Both companies dodged requests to testify before the U.S. Congress in 2010 privacy hearings, leading Sen. Commerce Chairman Jay Rockefeller (D-W.Va.) to snap, "When people don't show up when we asked them to… all it does is increase our interest in what they're doing and why they don't show up… It was a stupid mistake for them not to show up, and I say shame on them."

But with powerful industry rivals backing potentially catastrophically damaging legislation like the Orwellian "Stop Online Piracy Act" (SOPA) (H.R. 3261), Google rapidly discovered that lobbying could not only lead to tax favors, but also help win it key allies in corporate battles (big media companies, for example paid 10 percent of active Senators' election costs to get the SOPA build written and moved to debate).

IV. Are Product Bans on ANY Device Good for Americans?

The issue with both Apple and Google's lobbying is not only a question of tax policy fairness, or lack thereof, or fairness in terms of antitrust policy.  

Given the company's outstanding legal war, it also becomes problematic in the sense of whether justice will truly be blind, particularly in federal organizations like the ITC who are directly run by appointees of   officials in Congress or the U.S. President -- politicians who take millions in lobbyist money (hundreds of millions in President Obama's case) to get elected.

Banning any product limits consumer choice.  Unfortunately, perhaps, the ITC and U.S. Customs and Border Control have a stranglehold on damaging product bans, given that all major manufacturers -- Motorola, Samsung, HTC, Apple, and others -- manufacture their smartphones in China.

Apple vs Samsung
Apple and Android are fighting in court and in Washingon, D.C. [Image Source: PhoneBuff]

Aside from the consumer impact, there's a secondary question of U.S. jobs.  Apple clearly is emphasizing its importance to U.S. jobs and that importance is not to be neglected.  But Motorola, one of Apple's targets is also a top U.S. tech firm employing thousands -- as is Google.  While Apple did not start the fight with Motorola, versus Asian Android giants Samsung and HTC, today Motorola is facing the same prospect of import bans.

And while Apple's efforts against the Asian Android smartphone giants may not appear to affect American jobs, they likely will given that over half of Samsung's system-on-a-chip production is sourced in Texas.  Likewise, all of the major Android manfuacturers use glass from Corning and chips from other companies like Intel Corp. (INTC) unit Infineon or Californian-based Qualcomm, Inc. (QCOM) in their smartphone.  Likewise, if handsets are banned American telecommunications companies like Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD), and AT&T, Inc. (T) will be adversely impacted.

Thus while an Android ban would hit Taiwan (HTC's home country) and South Korea (Samsung's home) first, it would create a ripple effect harming many jobs.

Jobs needed shirt
Product bans of either Apple or Android devices could cost American jobs -- but are politicians concerned? [Image Source: NPR]

Ultimately U.S. courts, in a "best case" scenario, may opt for slaps on the wrists of Apple and its rivals, as Netherlands and the other regions have done in concluded patent spats.  But given that the ITC has already doled out two product bans, hope of a tidy resolution may be misplaced.

This nuclear war may claim an unknown amount of casualties in the form of competition and American jobs.  But Apple and Google both remain resolute, firm in their efforts to lobby Congress for preferential treatment and to try to end each other's market offerings in court.

Source: Fortune



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RE: This makes me sick
By Reclaimer77 on 5/29/2012 7:56:36 PM , Rating: 0
Except without lobbying you end up with fascism. You have a pretty convenient view on what "freedom of speech" is, Jason.

If you remove lobbying from a political system then the elected officials exist in a vacuum with no information coming from outside sources. Remember charities and NGO's also lobby government (as well as the churches, mosques, temples, big pharma, little pharma, oil, mothers for this or that, fathers for other stuff, governments for war, governments for peace.... this list is endless).

The problem isn't lobbying. It's corrupt elected officials who at best accept bribes/payment to fund an overly expensive electioneering machine. The problem is that lobbying happens with no public over site and now accountability.

The problem is more complex than just removing lobbying. Do you really want government making decisions without asking companies advice? The same companies that the government expects to implement strategies?

Say for example the USA predicts a 20% increase in crude oil use over the next 10 years. Where the refineries should go, where the oil is best sourced, how the petrol products are best distributed are all important questions that the oil industry is well placed to help answer. Not dictate of course but their opinion should matter.

Without lobbying you put all the power and decision making solely in the hands of a large centralized Government. I guess that sounds like a better deal to you.


RE: This makes me sick
By JasonMick (blog) on 5/29/2012 9:38:16 PM , Rating: 2
quote:
Except without lobbying you end up with fascism. You have a pretty convenient view on what "freedom of speech" is, Jason.
What? How do you get that?

Every fascist state in history to my knowledge has been formed by some combination of corporate and/or union interference in government, combined with rampant nationalism.

Please give an example if you believe otherwise.

In reality instances of democratic states or Republics where people are free to participate in politics scarcely go towards fascist states. Fascist states tend to be the aftermath of either constitutional monarchies. Some of these had weak representative governments -- see Italy, Germany -- others had little representation and were pure serfdoms (see Russia). And yes, I lump Russia as a fascist state, because I feel that "communist" Russia had little to do with true Marxist communism and much to do with an fascist oligarchy in which trade unions and corporations merged with the government and were ruled by a small (and ruthless) wealthy elite. That's not a defense of communism, it's more of an observation of its failures to date.

Anyways, I find your comment somewhat hard to take seriously as you've made a very extreme comment, without explaining what exactly you mean in a historical context. I would be interested to hear your opinion, but when you say such details history would be appreciated.
quote:
Except without lobbying you end up with fascism. You have a pretty convenient view on what "freedom of speech" is, Jason.

If you remove lobbying from a political system then the elected officials exist in a vacuum with no information coming from outside sources. Remember charities and NGO's also lobby government (as well as the churches, mosques, temples, big pharma, little pharma, oil, mothers for this or that, fathers for other stuff, governments for war, governments for peace.... this list is endless).
What? Why can't they figure out on their own what benefits the majority of CITIZENS who they supposedly are representing??

In some cases the best decision for the public may overlap with corporate interests, in other cases it may run counter to corporate interests.

But to blind make decisions in a non-technical manner based on special interest "funding" is anything but a sound system of government or a representative government.

But if politicians are so brainless they can't come up with ideas of how to spend taxpayer dollars in a way that benefits taxpayers they are not worthy of office.
quote:
The problem isn't lobbying. It's corrupt elected officials who at best accept bribes/payment to fund an overly expensive electioneering machine. The problem is that lobbying happens with no public over site and now accountability.

The problem is more complex than just removing lobbying. Do you really want government making decisions without asking companies advice? The same companies that the government expects to implement strategies?
It's really not so complex. You halfway acknowledge the issue, then backpedal five steps.

Free speech is not a large organization giving money to a candidate or telling their employees how to vote. Again, that is a large organization -- be it a trade union or corporation -- EMPLOYING a politician. Employment is not free speech, as you are often forced to do many things that go against your feelings of what is best or right.

You say bribe, I saw campaign contribution. It's really the same thing.

Politicians should make decisions because they benefit their constituents, not because someone bought them their job. Hopefully you can see that.

Otherwise politics is not at all democratic (or republican, even in a form of gov't sense), it's a plutocratic oligarchy in which the wealthiest collectives buy the laws. That is far closer to fascism than traditional republics or democracies, the forms of government that the U.S. federal and state governments were SUPPOSED to blend.
quote:
Say for example the USA predicts a 20% increase in crude oil use over the next 10 years. Where the refineries should go, where the oil is best sourced, how the petrol products are best distributed are all important questions that the oil industry is well placed to help answer. Not dictate of course but their opinion should matter.

Without lobbying you put all the power and decision making solely in the hands of a large centralized Government. I guess that sounds like a better deal to you
Okay, but if this is in the nation's best interests, what's stopping the politicians from consulting these industry officials WITHOUT lobbyist money?

You make a very misleading assumption that politicians would simply ignore industry experts if industry leaders don't bribe them/shower them with campaign contributions.

Perhaps this would be true of some politicians, but again, those individuals are unfit to govern a cheese sandwich, let alone the nation.

In a truly democratic republic (what our nation was envisioned as), the government would indeed consult industry experts, but it would do so in a way that tried to be as non-biased as possible and as considerate of citizen welfare as possible.

Sure, it would give grants for certain kinds of development that benefited the nation. But if there were contracts that prevented elected officials and bureaucrats from accepting campaign dollars from the interested parties or accepting positions with them after they leave office, then conflict of interests would be avoided.

It's easy to complain that nobody would then be politicians, because they would want industry jobs. That would be a highly misleading argument, though if you realize how posh salaries, expense allowances, and retirements are for federally elected officials. And hey, with all the money saved by cutting out special interest pork, you could even give politicians a raise, while cutting the budget substantially.

Your argument boils down to that corruption and cronyism is necessary because the bribers and crony chiefs are great architects of the nation. You are correct to some extent. They are steering the nation. The problem is they're not doing so in an unbiased technical manner. They're drowning the government in a never-ending sea of swelling budgets and special interest pork, much of which is for spending or regulation that is anything but the best idea when reviewed by unbiased technical experts.


RE: This makes me sick
By Reclaimer77 on 5/29/2012 11:28:16 PM , Rating: 3
quote:
Every fascist state in history to my knowledge has been formed by some combination of corporate and/or union interference in government, combined with rampant nationalism.


Pretty sure you just described shades of EVERY government ever wrought by man there Jason.

Anyway I'm not getting into this with you again. You have done nothing but blame Corporations and "rich people" for every single problem we have.

quote:
What? Why can't they figure out on their own what benefits the majority of CITIZENS who they supposedly are representing??


LOL and you don't think this is totalitarianism? How many times have Governments acted in peoples "best interests" arbitrarily and without discussion with disastrous results?

You are this trusting of our "representatives" in Washington huh? That they are going to just arrive at the proper conclusion while weighing in all the facts on their own, and we're all just better for it.

Majority of citizens? Oh I get it, so if my Corporation of only a few thousand people might be adversely impacted by some legislation, I shouldn't have the right to lobby for someone to hear me out?

quote:
Free speech is not a large organization giving money to a candidate or telling their employees how to vote. Again, that is a large organization -- be it a trade union or corporation -- EMPLOYING a politician. Employment is not free speech, as you are often forced to do many things that go against your feelings of what is best or right.


Now who's being the extremist here Jason? You can't just make stuff up like this. Employment? You state that in the literal sense.

And forcing someone to do something? Again, you say anything to characterize the corporation in an evil light. Does the politician have NO obligation to be ethical, if he's truly trying to be "bribed" as you state it?

quote:
Okay, but if this is in the nation's best interests, what's stopping the politicians from consulting these industry officials WITHOUT lobbyist money?


Really? Jason do you honestly see a Government out there that's working in our nations best interests? Oh I know they THINK they are, but that's not what I'm seeing.

They set this up, not the Corporations. You're hating the player, but not the game. If you want to end or limit lobbying, we MUST return to the limited small Government as envisioned in the Constitution.

To end lobbying while we still have an 800 pound gorilla in Washington, would absolutely lead to fascism/totalitarianism. And I'll stand by that.


RE: This makes me sick
By AppleMaggot on 5/30/2012 3:17:53 AM , Rating: 2
quote:
Free speech is not a large organization giving money to a candidate or telling their employees how to vote.


Large organizations (i.e., corporations) represent the interests of their "shareholders" NOT their employees. As such, when they're lobbying they aren't telling their employees how to vote, rather they're using their available resources to do what they must in order to enhance shareholder value (which is the entire point of their existence). A failure to lobby for the continued success of the business would constitute a breach of fiduciary duty. As an employee, if your company is making contributions to someone you don't like or doing something that you find morally reprehensible, you can elect to stop working for them. No one will force you to stay and support the organization against your will.

quote:
Employment is not free speech, as you are often forced to do many things that go against your feelings of what is best or right.


Dude, seriously, did you really just say that? You make it sound like employers routinely put guns to their employees heads and threaten to blow their brains out if they don't do exactly what they're told. Give me a break. How is an employer going to "force" me to do anything I really don't want to do? If your employer tells you to do something that isn't right, and you have any ethics at all, you'll give them the finger and walk out the door.


RE: This makes me sick
By BluntForceTrama on 5/30/2012 1:49:12 PM , Rating: 2
quote:
You make it sound like employers routinely put guns to their employees heads and threaten to blow their brains out if they don't do exactly what they're told.

When an employer tells you that you're about to be dumped, and your severance pay will be given out only if you train the new off shore person how to do your job, and there's a very low likelihood your can even find any other comparible job, then virtually that's exactly what the employer is doing.

In fact similar agreements to not sue for age discrimination (even though it's quite clear) in order to obtain severance pay have been set aside in court in the current economic environment as a decision that was made under duress.

http://www.thefreedictionary.com/duress
1. compulsion by use of force or threat; constraint; coercion (often in the phrase under duress)
2. (Law) Law the illegal exercise of coercion


RE: This makes me sick
By AppleMaggot on 5/30/2012 3:47:39 PM , Rating: 2
quote:
When an employer tells you that you're about to be dumped, and your severance pay will be given out only if you train the new off shore person how to do your job, and there's a very low likelihood your can even find any other comparible job, then virtually that's exactly what the employer is doing.


I'm sorry, but if a job can be performed by an "off shore person" with a bit of training and "there's a very low likelihood you can even find any other comparable job" then the position in question must not be terribly important, be in demand, or require a great deal of skill. Assuming that's the case, is it really any surprise when an employer finally wises up to the fact that they can easily get some savings by kicking their more expensive domestic employees to the curb and replace them with equivalent but cheaper overseas labor? Why should anyone expect to be able to stay in such position for all eternity? To be valued by a company (and not get fired) one needs to develop useful marketable skills. If an employee can be easily replaced, it's not the companies fault for not viewing them as an invaluable asset.

Companies are beholden to their shareholders not their employees. If they can save $$$ by outsourcing then it is their fiduciary duty to their shareholders do so, employees be damned. It sucks, but no one ever promised that a corporation has to be a dependable jobs program for unskilled or lightly skilled workers.

So an employer tells (what they view as) a low value employee that they're being fired but that they will receive severance pay if they train up their cheaper overseas replacement. At least they're giving the employee the "option" to receive severance vs just kicking them to the curb with nothing. The employee should be grateful they were able to draw a paycheck and ride the gravy train for as long as they did while working at an easily replaceable position for who knows how long, AND receive severance when they're finally cut loose.

The age discrimination case you referenced is not comparable at all to the situation you mentioned above. A clear case of discrimination is different from a worker being legitimately laid off because they failed to improve their skills enough while working there to become a valuable asset to the company instead of a liability.


"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)














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