Friday, September 2, 2022

Apple refuses to cooperate with U.S. government agency seeking information on its funding of, and influence over, ACT | The App(le) Association: ITC investigation of Ericsson's 5G complaint

Apple's hardball attitude toward governments in the App Store context is already notorious: instead of truly solving any of the problems it has created, Apple would rather be fined and subsequently exhaust all appeals.

Patent litigation is another field. I was really shocked when I found out that the staff of the United States International Trade Commission (USITC, or just ITC) felt forced to bring a motion to compel Apple to provide answers to some of its questions. The ITC staff--formally called the Office of Unfair Import Investigations (OUII)--participates in investigations as a third party. They don't make the decision, but both the Administrative Law Judge (ALJ) presiding over the investigation and, ultimately, the Commission (the U.S. trade agency's top-level decision-making body) often find the staff's input useful.

Discovery disputes between private parties are normal--and it's equally normal that companies being investigated or sued by antitrust enforcers dispute the scope of discovery requests (I've been watching that for a while now in United States v. Google). But it may be more or less unprecedented for a party to a high-profile ITC Section 337 investigation to be so uncooperative that the ITC staff--which is neutral and on at least one question has even sided with Apple against Ericsson (though with Ericsson on some others)--has to bring a motion to compel. At least I can't remember a similar incident, and I've watched quite a number of ITC investigations over the past 12 years.

Now that public redacted versions of some of the related submissions have become available, I can see why. It's about Apple's astroturfing, paying others to side with it, claiming to represent constituencies that either don't care about the issue in the slightest or may even be adverse to Apple. That's an issue not only in a patent policy context but even more so when it comes to Apple's App Store abuse.

Apple appear very afraid, and it has every reason to worry that what will come to the light of day will expose its astroturfing ways.

As I've said on another occasion, what Apple is doing is the equivalent of, in a hypothetical scenario, Russia funding a group of lobbyists in D.C. and Brussels claiming to represent the vast majority of Ukrainians who allegedly welcome the invasion. Apple taxes, tyrannizes, and "sherlocks" app developers. App developers are victims of Apple's conduct, and ACT | The App Association--which is actually just an Apple Association--unethically claims to represent the interests of small developers. In the SEP context it's ridiculous: small developers don't face SEP royalty demands or assertions. In the App Store context it's despicable because they claim that the victims are on their side (they obviously aren't). If ACT had more talented people on board, they might be able to make a decent living without having to make such false claims. Epic Games' CEO Tim Sweeney recently told an ACT employee on Twitter that his life is a lie...

Let me refer you to a few posts in which I discussed why ACT does not represent actual app developers like me:

And especially this one, which provides the context to the ITC staff's motion to compel:

Not only Ericsson--the complainant in three parallel ITC investigations--but also the ITC staff brought motions to compel because Apple refused to provide information on its funding of ACT. Those motions also related to Apple's relationship with other organizations, such as the Fair Standards Alliance, and while transparency would also be desirable in that regard, they at least don't pretend to represent small app developers. So I'll focus on ACT here.

Ericsson and Apple have some agreement in place that in this litigation they weren't going to conduct discovery of each other's third-party advocacy efforts. However, such an agreement between the private parties wouldn't be binding on the ITC staff anyway--and Ericsson says this case is different because ACT (and others, such as the FSA) submitted public interest statements in the ITC investigation of Ericsson's SEP infringement complaint. Apple engages in hair-splitting by seeking to distinguish public interest statements from sworn declarations attached to a party's filing. That doesn't convince Ericsson or the ITC staff, and I hope the ALJ will also find it unavailing.

Let me show you the documents because it's really interesting to see how evasive Apple and its astroturfers are. I believe that would come out is essentially that ACT is a lobbying contractor, like an extension of Apple's lobbying department. And again, that would have implications not only in the SEP context but even more so with respect to mobile app stores. For instance, next month the United States Court of Appeals for the Ninth Circuit will hear Epic Games' appeal, and ACT is one of Apple's amici.

First, here's Ericsson's motion to compel:

Second, the ITC staff's response, which indicates that they have essentially the same issues with Apple's failure to be forthcoming as Ericsson does:

And finally, Apple's response to Ericsson's motion to compel: