Apple faces shareholder vote over Chinese app removal policies

[February 26, 2020]    By Stephen Nellis

(Reuters) - Apple Inc's <AAPL.O> shareholders on Wednesday will vote on a proposal critical of its moves to remove apps at the request of the Chinese government and calling on the iPhone maker to report whether it has "publicly committed to respect freedom of expression as a human right."

The proposal is one of six that will face a vote at the company's annual shareholder meeting at Apple's headquarters in Cupertino, California.

The shareholder proposal on freedom of expression focuses on Apple's 2017 removal of virtual private network apps https://www.reuters.com/article/us-china-apple-vpn/apple-says-it-is-removing-vpn-services-from-china-app-store-idUSKBN1AE0BQ from its App Store in China. Such apps allow users to bypass China’s so-called “Great Firewall” aimed at restricting access to overseas sites.

Apple opposes the proposal, saying it already provides extensive information about when it takes down apps at the request of governments around the world and that it follows the laws in countries where it operates.

"[W]hile we may disagree with certain decisions at times, we do not believe it would be in the best interests of our users to simply abandon markets, which would leave consumers with fewer choices and fewer privacy protections," Apple said in its opposition.

Proxy advisory firms Glass Lewis and Institutional Shareholder Services both recommend votes in favor the measure, according to reports from them seen by Reuters.

Apple shareholders have voted down human rights measures related to China in the past. They defeated a 2018 proposal https://www.reuters.com/article/us-apple-shareholders/apple-ceo-downplays-special-dividend-at-shareholder-meeting-idUSKCN1FX2GA that urged Apple to create a human rights panel to oversee issues such as workplace conditions and censorship in China, with 94.4 percent of shareholders voting against it.

Shareholders will also vote on a proposal to allow shareholders to nominate more than one director to Apple's board and whether to tie executive compensation to environmental sustainability metrics. Apple opposes both proposals.

(Reporting by Stephen Nellis in San Francisco; Editing by Dan Grebler)

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