Apple Inc. Goes to Washington -- What Lobbying Efforts Mean for Investors

By Markets

One could easily forgive tech giant Apple for walking with a little extra swagger these days.

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Fresh off the most lucrative quarterly report in, well, history, Apple shares are once again pushing toward fresh highs. There is even talk about how Apple could become the first $1 trillion company in history. Suffice it to say, things are going swimmingly in Cupertino.

However, with all the commotion over the past several weeks, a smaller, but extremely important, aspect of the company strategy has been essentially overlooked. Because while the Apple brand might still project the same California cool it always has, Apple is also increasingly playing ball with big government as well.

Mr. Apple goes to Washington
As the company has grown in size and prominence, Apple has taken an increasingly assertive role on Capitol Hill as well. According to recently released data by The Center for Responsive Politics, Apple has consistently grown its lobbying efforts over the years, reaching an all-time high of $4.11 million during calendar year 2014.

Source: Center for Responsive Politics

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So, where exactly has all that money gone?

According to CFRP data, Apple used those funds to retain the services of at least 6 different lobbying firms in 2014, whose efforts to influence a range of policy issues targeted a total of 18 different federal government organizations last year. All told, the company was included in 85 different governmental reports.

However, given its meteoric rise in the last two decades, as well asthat of many of its tech-giant peers,it should not come as a huge surprise that the largest publicly traded company in the world has itself received increased government scrutiny over the past few years.

Heavy lies the crown
If you recall, Apple has had to answer to Uncle Sam very publicly for a myriad of issues, including the Department of Justice eBook price-fixing case and testimony from Tim Cook on Apple's tax practices before the Senate Permanent Subcommittee on Investigations.

According to CFRP, the Mac-maker has focused its lobby efforts on shaping a number of issues critical to its success. In looking at its lobbying disclosure documents, Apple cites issues such as "copyright, patents, trademarks, education, environment, trade, consumer safety and products, transportation, telecommunications and taxation" as of particular importance to its business agenda.

Apple playing catch-up
It is important to note that Apple is by no means alone in taking a more active stance in Washington among the tech elite. Quite the opposite, Apple barely cracks the top ten names in The Center for Responsive Politics' "Computer/Internet" industry grouping as you can see below.

Source: Center for Responsive Politics

Among tech companies, only search powerhouse Google cracked the overall top 10 for total lobbying spending in 2014, taking the 7th spot last year. However, this large and increasing presence in the national political process mostly, in my eyes, reflects the increased social importance companies like Apple, Google, Microsoft, and Facebook each play in our everyday lives.

It is no surprise that, as these large tech companies increasingly comprise the backbone of the digital age, they will also gradually incur regulatory scrutiny, which makes having a voice in D.C. more of a need than a want.

In Apple we trust
From the perspective of an Apple investor, the primary risk factor to consider here is whether taking a more active role in shaping legislation, "playing ball" so to speak, will have a negative effect on the brand. Apple has been ranked as the most valuable brand in the world over the past two years by Interbrand's widely watched ranking. Representing ideals like empowered individualism and luxury to consumers the world over, the brand is a major reason why Apple can consistently get away with charging the premium prices it does for its products.

If taking a more active stance in shaping national politics were to potentially dirty what Apple represents to consumers, there is a case to be made that it could have a negative impact on the business as well. While I think this story line is unlikely to create this kind of negative brand association, it is a trend likely to continue in the years to come and one that investors will certainly want to watch.

The article Apple Inc. Goes to Washington -- What Lobbying Efforts Mean for Investors originally appeared on

Andrew Tonnerbelieves investors can and should exercise their right to vote in the stock market, as well as in the polls. Ever the pro-Apple man, Andrew exercises his rights by owning shares of Apple. The Motley Fool recommends, Apple, Facebook, Google (A shares), Google (C shares), and Intel. The Motley Fool owns shares of, Apple, Facebook, Google (A shares), Google (C shares), Intel, International Business Machines, Microsoft, and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.