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Apple Investor Measure Over App Takedown In China Get High Support In Annual Meeting

Apple Investor Measure Over App Takedown In China Get High Support In Annual Meeting
Apple Inc was compelled to respond to a proposal from a shareholder criticizing the company’s decision to remove its app from the Chinese market after the proposal got relatively high level of support from other shareholders during the annual general meeting of the iPhone maker on February 26, said reports.
The proposal, that demanded that Apple file a report on whether it has "publicly committed to respect freedom of expression as a human right", was however defeated even though it received 40.6 per cent of the votes that were cast, said reports quoting information form company figures. 
This proposal was about the decision of the company to remove virtual private network apps from its App Store in China back in 2017. That app gave Apple users the opportunity to avoid the so-called Great Firewall of China designed to restrict access of Chinese users to international sites. The decision of Apple was viewed as a compromise by the company to retain access to the vast market of China.
The proposal getting a relatively high level of support at the annual meeting of the company was in contrast to previous such proposals that used to get little support at such meetings – especially from big investors.
"A total this high is a striking warning – and it must have come from big institutional investors, not just retail shareholders – that Apple’s human rights policy in China has become a material risk for the company’s reputation," said Stephen Davis, a senior fellow at Harvard Law School's Program on Corporate Governance.
"Apple will be under great pressure to respond rather than ignore this vote," Davis said.
No comments were available in the media about the issue from Apple. According to reports, the proposal was opposed by the company arguing that it always provides enough information about measures such as taking down apps when it does so. It also said that such pull downs are often done at the request of local governments all across the world and that it always follows the local laws of the countries it operates in.
The support was welcomes by the investor group that put the measure on the ballot called SumOfUs.
"Apple’s investors have sounded the alarm that Tim Cook needs to listen to the concerns raised by frontline communities such as Tibetans and Uighurs who have long suffered under a tech dystopia," said Sondhya Gupta, a campaign manager for the group.
Measures related to China have been voted down by much larger margins by Apple shareholders in the past. For example, an investor proposal that appealed to Apple to set up a human rights panel tasked with overseeing issues such as workplace conditions and censorship in China in 2018 was defeated with 94.4 per cent of cast votes going against the proposal.
Referring to the support for the latest China related proposal, experts said that there seems to have been a shift in sentiments.
"Given the high level of support received for the proposal, we expect to see the company engage with its shareholders on the issue and report to shareholders about what happened in the engagements, including any potential actions it intends to take as a result," said Kern McPherson, vice president of research and engagement for proxy advisory firm Glass, Lewis & Co, which supported the measure.

Christopher J. Mitchell

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