Apple survives shareholder revolt over free speech

Original article: https://www.telegraph.co.uk/technology/2020/02/26/apple-survives-shareholder-revolt-free-speech/

Apple has faced a significant shareholder rebellion over an effort to force it to say how the company complies with government censors, as it comes under growing pressure over its role in China.

More than four in ten – 40.6pc – of Apple’s shareholder base voted in favour of a proposal asking it to disclose how it responds to government requests that could limit free expression, based on preliminary results from its annual meeting on Wednesday.

While the proposal failed, the revolt is much broader than on previous shareholder proposals on Apple’s human rights record, suggesting the company is coming under increasing pressure from investors.

The pressure group SumOfUs, which had proposed the measure, had accused Apple of “aiding the repression of Uighurs, Tibetans and other rights activists”, and advisory groups ISS and Glass Lewis had recommended shareholders supported the motion.

Many of America’s biggest tech companies have their services banned in China, but Apple sells billions of dollars of products there and has had to delete dozens of apps from its App Store after notices from Beijing.

The Tibetan activist Sonamtso, speaking on behalf of SumOfUs, said that Apple had removed almost all virtual network apps, which allow internet users to avoid having websites blocked, at the request of the Chinese government. She said censorship in the country had contributed to the spread of the coronavirus, which last week forced Apple to issue a revenue warning.

Apple had attempted to block the proposal, arguing it was similar to previous votes on human rights that had been supported by a tiny minority of investors, but was overruled by US financial regulators.

The company has faced growing pressure over its actions in China amid Beijing’s crackdown on free speech online and growing Western hostility to the state.

Sondhya Gupta, campaign manager at SumOfUs, said: “Apple has long argued that by doing business with repressive regimes it has the opportunity to advance human rights. Its dealings with China have demonstrated that as a fallacy.

“Today, Apple’s investors have sounded the alarm that Tim Cook needs to listen to the concerns raised by frontline communities such as Tibetans and Uyghurs who have long suffered under a tech dystopia.”  

Apple endured smaller opposition on other shareholder proposals that would have allowed investors to nominate more directors to its board and to tie executive pay to sustainability.

Speaking at the meeting, Tim Cook, Apple’s chief executive, described the coronavirus outbreak, which has seen stores and factories shut, potentially limiting supply and product development, as a “challenge” and a “dynamic situation”, but did not update shareholders on a warning last week when it said it would miss revenue forecasts.

In response to an investor question on its new TV streaming service, Apple TV Plus, Mr Cook indicated it was not planning to buy rights to already popular shows, saying it was focused on developing its own material. 

He also defended Apple’s record on helping security forces, following criticism that it had not unlocked a phone belonging to a gunman in a shooting at a military base in Florida in December. Mr Cook said Apple would not build a “backdoor” that allowed it to crack into locked phones.

“The issue that’s on the table, should Apple have a backdoor or should the government have a backdoor into your iPhones and we say ‘No’. You can never have a backdoor just for the good guys,” he said.