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For Steve Jobs, meeting with Obama comes as Apple faces increased scrutiny from Washington


It seemed only natural for President Obama to meet with Apple chief executive Steve Jobs during his Silicon Valley visit Thursday. After all, Obama has held dozens of similar meetings with corporate chieftains over the past two years and Jobs runs the nation's most-valuable tech company.

For the notoriously private Jobs, however, the nearly hour-long get-together at the Westin hotel in San Francisco marked a significant departure. Unlike his main rivals in Silicon Valley, including Google chief executive Eric Schmidt, Jobs has expressed little interest in the affairs of Washington - except when government regulations mess with his business, particularly patents,
trade, and taxes.

It's unclear who called the meeting. "It's a meeting that the president was interested in having," said White House spokesman Robert Gibbs. Apple didn't respond to a request for comment.

But Thursday's sit-down highlights a growing tension for the company, a once-forgotten relic that has transformed the music, publishing, mobile phone and television industries over the past ten years with must-have mobile devices. Apple's expanding influence in the marketplace and its soaring market value, which hit $280 billion as of Friday, have brought it closer scrutiny
from regulators and lawmakers.

So far, Apple still only has a small, low-key lobbying staff in Washington. Analysts say that the company risks following in the footsteps of other high-tech firms that ignored political pressure until they were hit with antitrust investigations and regulatory complaints. That wait-and-see approach caught up with Microsoft and Google, which have both faced Justice Department
and Federal Trade Commission probes into whether they are acting fairly as they expand into new lines of business.

Apple recently settled Justice Department allegations that it used anti-poaching agreements with other firms to keep wages down. The Federal Trade Commission has also probed a complaint by Adobe that Apple's lock on its applications store harmed the firm unfairly when it rejected the Flash applications for the iPad.

Apple is "now at the vortex of some key issues at the FCC and FTC that they will need to move forward on," said Stifel Nicolaus analyst Rebecca Arbogast.

Microsoft and Google have since beefed up their lobbying operations and hired dozens of top policy minds from Capitol Hill and the Federal Communications Commission. The Obama administration has reached out, in turn by cultivating close ties to many high-tech executives including Schmidt, who serves as an economic adviser.

Indeed, during Obama's visit to California this week, he spoke at a Democratic party fund-raiser hosted at the Palo Alto home of Google search product vice president Marissa Mayer.

By comparison, Apple doesn't put itself in front of the biggest policy and legal debates for the high-tech industry, but allows the Business Software Alliance trade group to speak on its behalf on on privacy and counterfeiting issues. The company dropped out of the Chamber of Commerce last year in protest of the chamber's opposition to energy reform.

Despite its number 2 position in U.S. smartphone sales, Apple was hardly involved in debates at the Federal Communications Commission over net-neutrality rules and the exclusive handset contracts prevalent in the wireless industry - such as the one the company holds with AT&T to carry its iPhone.

Apple has four lobbyists in Washington and its office is headed by Catherine Novelli, a former assistant U.S. Trade Representative. The company spent $340,000 in the last quarter lobbying on legislation including patent reform, electronic waste removal, and how companies collect location-based data on cellphone users. By contrast, Google spent four times that amount in
the third quarter; Microsoft spent about five times as much.

Now, with Apple sitting on $51 billion in cash it wants to burn on acquisitions and a staunch defense of its control over software and Internet applications on the iTunes store, observers say the company will face more even more scrutiny by federal
regulators.

"One of the advantages Apple has enjoyed in terms of antitrust scrutiny is that it has remained a small yet successful and profitable player in market," said Andy Gavil, an antitrust law professor at Howard University. "It has received more attention recently because of the popularity of the iTunes store and the iPhone."

By Cecilia Kang  | October 22, 2010; 6:13 PM ET
Categories:  AT&T, Apple, FCC, FTC, Google  
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Next: Washington Post editorial: Comcast-NBCU merger without net neutrality conditions

Comments

Apples and nutz together make a waldorf salad.

Posted by: roseyvonnerowleyanderson | October 23, 2010 8:06 AM | Report abuse

I've just noticed Kang's reporting in the last couple of weeks. She is superb, as is Rob Pegoraro. Having both reporting for one's technology beat is like having Joe DiMaggio and Mickey Mantle (pre-knee-injury) playing in your outfield at the same time.

Posted by: mbrachman | October 23, 2010 9:40 AM | Report abuse

Such cynicism! Do you really think this was Jobs as lobbyist? Yes, Apple works in a complicated business, environmental and ethical environment but your own numbers show they are not out to bludgeon Congress and regulators with money. Obama likely wanted Job's views on getting the economy moving, exporting more US goods, tech infrastructure and education and to boost his 'business friendly" perception.

Posted by: dbond1 | October 23, 2010 9:43 AM | Report abuse

Jobs and company obviously aren't giving Odumbo and the democrats enough money.
Seems to me it's the only reason a leftist, like Odumbo, who hates the private sector would meet with some businessman.
Remember Odumbo and his corrupt party of enablers on election day and shovel the democrat manure out of congress.

Posted by: LarryG62 | October 23, 2010 8:06 PM | Report abuse

So if Obama said, “You know, Steve... I think it would be really cool to have Adobe Flash on my iPad so I could read the Washington Post better.” -- how do you think Jobs would respond?

Posted by: 54Stratocaster | October 25, 2010 9:09 PM | Report abuse

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