Tech: Top companies amass lobbying army for battle
Top firms invest heavily to avoid losing streak in Washington
WASHINGTON — Faced with the growing possibility of antitrust actions and legislation to curb their power, four of the biggest technology companies are amassing an army of lobbyists as they prepare for what could be an epic fight over their futures.
Initially slow to develop a presence in Washington, the tech giants — Amazon, Apple, Facebook and Google — have rapidly built themselves into some of the largest players in the influence and access industry as they confront threats from the Trump administration and both parties on Capitol Hill.
The four companies spent a combined $55 million on lobbying last year, doubling their combined spending of $27.4 million in 2016, and some are spending at a higher rate so far this year, according to the Center for Responsive Politics, which tracks lobbying and political contributions. That puts them on a par with long-established lobbying powerhouses like the defense, automobile and banking industries.
As they have tracked increasing public and political discontent with their size, power, handling of user data and role in elections, the four companies have intensified their efforts to lure lobbyists with strong connections to the White House, the regulatory agencies, and Republicans and Democrats in Congress.
Of the 238 people registered to lobby for the four companies in the first three months of this year — both in-house employees and those on contract from lobbying and law firms — about 75% formerly served in the government or on political campaigns, according to an analysis of lobbying and employment records. Many worked in offices or for officials who could have a hand in deciding the course of the new govern
mental scrutiny.
The influence campaigns encompass a broad range of activities, including calls on members of Congress, advertising, funding of think-tank research and efforts to get the attention of President Trump, whose on-again, offagain streak of economic populism is of particular concern to the big companies.
Last month, the industry lobbying group, the Internet Association, which represents Amazon, Facebook and Google, awarded its Internet Freedom Award to Ivanka Trump, the president’s daughter and White House senior adviser.
“They are no longer upstarts dipping a toe in lobbying,” said Sheila Krumholz, the executive director of the Center for Responsive Politics. “They have both feet in.”
Facebook and Google are dogged by concerns over their handling of personal data, harmful content and misinformation. Amazon’s rapid expansion has been met with unease over labor conditions and the company’s effect on small businesses. Apple’s control over its app store makes it hard for new apps to get discovered, some rivals say.
Last week, the threat of government action became more real, driving down their stock prices. The House Judiciary Committee announced a broad antitrust investigation into big tech. And the two top federal antitrust agencies agreed to divide oversight over Apple, Amazon, Facebook and Google as they explore whether the companies have abused their market power to harm competition and consumers.
“Unwarranted, concentrated economic power in the hands of a few is dangerous to democracy — especially when digital platforms control content,” Speaker Nancy Pelosi tweeted after the Judiciary Committee announced its investigation. “The era of selfregulation is over.”
The industry’s troubles mean big paydays for the lawyers, political operatives and public relations experts hired to ward off regulations, investigations and lawsuits that could curtail the companies’ huge profits. The companies all had earlier ties to Democrats but have also worked to develop closer relationships with Republicans.
Facebook is paying two lobbyists who worked for Pelosi, including her former chief of staff, Catlin O’Neill, who now serves as a director of U.S. public policy for the Menlo Park company.
Pelosi received nearly $43,000 in total donations for her 2018 reelection campaign from employees and political action committees of Facebook, Amazon and Alphabet, Google’s corporate parent — each of which ranked among her top half-dozen sources of campaign cash. She had been a champion of tech companies, which have a significant presence in her Bay Area district.
But her support for the industry appeared more tenuous last month, when she said Facebook’s refusal to take down a doctored video of her that made her appear drunk demonstrated how the social network contributed to misinformation and enabled Russian interference in the 2016 election.
Mountain View’s Google is paying two contract lobbyists who worked as lawyers on the Republican staff of the House Judiciary Committee. One of the lawyers, Sean McLaughlin, also served as a deputy assistant attorney general under President George W. Bush.
“Having conducted congressional investigations from the inside, Sean is able to counsel clients on how to respond to them from the outside,” reads McLaughlin’s biography on the website of his firm, Hunton Andrews Kurth, which was paid $50,000 by Google to lobby Congress during the first three months of the year, according to lobbying records.
The Washington office of Amazon, whose CEO, Jeff Bezos, has drawn regular criticism from Trump, is led by a former Federal Trade Commission official, Brian Huseman. And its roster of outside lobbyists includes three Democratic former members of Congress — Norm Dicks of Washington, Vic Fazio of California and Kendrick Meek of Florida — as well as two former Justice Department lawyers.
One of them, Seth Bloom, was a trial lawyer in the department’s antitrust division in the late 1990s before going on to work on antitrust issues for the Senate Judiciary Committee’s Democratic staff. He went on to lobby for Amazon, including in connection with its purchase in 2017 of grocery chain Whole Foods, which required a review of competition concerns by the Federal Trade Commission. Amazon paid $30,000 to Bloom’s firm to lobby Congress on issues “related to competition in technology industries” during the first three months of the year.
In that span, Amazon also paid $70,000 to the lobbying firm of a top Trump fundraiser, Brian Ballard, to lobby Congress and the administration. Top-tier lobbyists in Washington can make millions of dollars a year.
One of the lobbyists on the account for Ballard’s firm, Daniel McFaul, worked on Trump’s presidential transition team and then briefly as chief of staff for Rep. Matt Gaetz, R-Fla. Gaetz is a member of a House Judiciary subcommittee that is planning a set of hearings, testimony from executives of top companies and subpoenas for internal corporate documents.
Even before Sen. Josh Hawley, R-Mo., was sworn in at the beginning of the year, the tech companies reached out to him. Hawley had investigated Google as his state’s attorney general, and the industry saw him as a threat.
Facebook called, as did Twitter and Google. This winter, in Hawley’s windowless temporary office, the lobbyists for the companies came to meet with Hawley’s aides, arguing that their companies contributed to Missouri’s economy and were innovative businesses that did more good than harm for consumers, according to a person familiar with the meetings.
“There is a burgeoning awareness that there is a big problem with the dominance of big tech,” Hawley said in a recent interview. “Big tech may be more socially powerful than the trusts of the Roosevelt era, and yet they still operate like a black box.”
The internet giants have learned from the hard lessons of Microsoft, which was caught flat-footed with a sparse lobbying presence in the 1990s when federal antitrust officials called for a breakup of the software giant. Google has especially been forced to deal with regulatory issues, both in Europe, where it has been hit with three multibillion-dollar penalties, and in the United States, where it escaped an Obama administration-era Federal Trade Commission investigation without any action being taken.
The companies have separately argued that they have not violated antitrust laws. Google and Facebook say that their services are free and do not harm competitors and that consumers can turn to alternative search and social networking apps. Amazon has said it has a large share of online commerce but only a small fraction of the overall retail market. And Cupertino’s Apple argues that the majority of apps in its store are free and that the company rejects only apps that violate its policies on hate speech and pornography, for instance, or try to take too much data from users.
“We have seen these tech companies escape accountability for years,” said Lisa Gilbert, the vice president of legislative affairs for the government watchdog group Public Citizen. The group, which has called for more user data protections and for breaking up Facebook, published a study last month showing that in the last two decades, 59% of top Federal Trade Commission officials who left the agency entered financial relationships with technology interests regulated by it.
The head of the Justice Department’s antitrust division, Makan Delrahim, was paid as a contract lobbyist by Google in 2007 to win approval for its acquisition of DoubleClick, which had drawn antitrust concerns. He is now facing pressure to recuse himself if the Justice Department pursues an investigation of the company.
Federal employees are barred from working on specific issues that affect their former private sector employers or interests, and generally face “cooling off” periods of one to two years after leaving government, during which they cannot lobby their former colleagues. But there are all manner of loopholes.
Gilbert’s group has called for stricter conflict-of-interest provisions. She said that “in this moment of enhanced scrutiny, the tech companies are going to be looking for those who have the Rolodexes that matter to try to stop regulation and legislation of the type that’s required to protect consumers.”
It is hard to avoid the increasing prominence of the companies in Washington. They finance some of the most influential think tanks from across the political spectrum, sometimes making it difficult for critical voices to win funding.
Google and Facebook have provided funding to hundreds of influential trade groups and think tanks across the ideological spectrum, including the U.S. Chamber of Commerce, the American Conservative Union, the Brookings Institution and the Center for American Progress.
In the spring of 2018, Facebook moved into a new office with room for as many as 200 lobbyists, policy experts and engineers for its Washington security team. With a full cafeteria, soaring ceilings, wallsize abstract art and concrete floors, the office copies its look from Facebook’s Frank Gehrydesigned headquarters.
Apple is preparing to move into a bigger office, and Google recently opened one of the city’s biggest corporate lobbying offices.
Amazon also opened a new office near Capitol Hill, where it regularly hosts policy events with members of Congress. And Amazon recently announced that it would place a second corporate headquarters across the Potomac River from downtown Washington, in Arlington, Va.
In December, in the evening after Google CEO Sundar Pichai, testified for the first time at a House hearing, the company hosted a holiday party with hundreds of government officials at the trendy Wharf along the Potomac.
Scores of lawmakers, including Reps. Debbie Wasserman Schultz, D-Fla., and Darrell Issa, R-Calif., gathered under neon displays of YouTube and Google. Issa, who had questioned Pichai earlier in the day and was within weeks of leaving office, was waiting near one of several open bars for a cocktail.