SEC sides with ADF-backed Apple shareholders on proxy ballot access to key free speech resolution

WASHINGTON – The U.S. Securities and Exchange Commission has ruled against Apple’s attempt to exclude a shareholder resolution that seeks to hold the company accountable for its policies and practices imperiling free speech.

Alliance Defending Freedom attorneys sent a letter to the SEC in November calling on the agency to decline Apple’s request to exclude the American Family Association’s resolution. As the letter indicated, shareholders are worried that Apple is “‘limiting content access within its online services’ based on viewpoint and that it does so based on vague and subjective terms of use.”

These problematic policies and actions are partially to blame for Apple’s dismal 8% out of a possible 100% on the 2023 Viewpoint Diversity Score Business Index. Highlighting these concerns, the American Family Association submitted a proposal calling on Apple to conduct an investigation and issue a report to shareholders.

Rather than allowing its shareholders to vote on the proposal at the 2024 annual meeting, Apple asked permission from the SEC to exclude the proposal from the proxy ballot. ADF attorneys then successfully called on the SEC to deny Apple’s request. Now, Apple shareholders will have the opportunity to vote on the resolution at the annual meeting this spring.

“Major corporations like Apple shouldn’t be hiding from shareholders who are concerned about the company’s impact on free speech. The SEC’s decision is a much-needed step toward transparency,” said ADF Senior Counsel and Senior Vice President for Corporate Engagement Jeremy Tedesco. “Apple needs to rebuild trust with its shareholders and customers, but that can’t happen unless it answers basic questions about whether it is treating everyone equally regardless of their political or religious views. Apple also needs to address its policies that threaten the fundamental freedoms of its customers by implementing the best practices identified by the Viewpoint Diversity Score Business Index, the premiere benchmark for measuring corporate respect for free speech and religious freedom.”

Apple’s reliance on overbroad and subjective terms of use is well documented. In a resource titled Our Commitment to Human Rights, Apple claims to “believe in the critical importance of an open society in which information flows freely.” But as ADF attorneys explain, that commitment is severely undermined by the corporation’s App Store policies. In its terms of service, for instance, the tech giant states that it “will reject apps for any content or behavior that we believe is over the line. What line, you ask? Well, as a Supreme Court Justice once said, ‘I’ll know it when it see it.’ And we think that you will also know it when you cross it.”

Similarly, in its “App Store Review Guidelines,” Apple openly warns users against including content that is “offensive, insensitive, upsetting, intended to disgust, in exceptionally poor taste, or just plain creepy.” Apple has relied on this policy to ban a wide range of content, including those promoting biblical views on marriage and sexuality. That trend also holds outside the U.S., where Apple’s censorship often caters to the demands of oppressive regimes.

During the 2023 shareholder season, the SEC declined requests from PayPal and JPMorgan Chase to deny similar shareholder resolutions after ADF attorneys and Jonathan Berry of Boyden Gray & Associates successfully petitioned the SEC to oppose the companies’ appeals.

Find out more about Viewpoint Diversity Score and the Business Index at www.viewpointdiversityscore.org.

Alliance Defending Freedom is an alliance-building, non-profit legal organization committed to protecting religious freedom, free speech, parental rights, and the sanctity of life.

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