Why Amazon is doubling down on lobbying

Spent $9.4M last year to woo government

WASHINGTON — Amazon nearly doubled its lobbying expenditures in 2015 versus the previous year, spending $9.4 million trying to sway Congress and executive agencies. The jump puts Amazon’s lobbying efforts in the same league as other tech giants like Microsoft and Facebook — and reflects how the company’s expanding business interests have raised the stakes of its relationship with the government.

The issues were wide-ranging from some obvious ones such as online sales taxes and drones. But it also pressed Washington on other matters including computer cloud services, cybersecurity and welfare benefits.

The increased lobbying spending is just one sign of Amazon’s interest in courting the nation’s capital. In the fall of 2014, the company moved its Washington policy shop to a much larger office space. Last spring, Amazon picked up Jay Carney, a former White House press secretary.

“Like a lot of businesses, Amazon has a presence in Washington and we focus on issues that matter to us,” said Carney, now Amazon senior vice president for global cor- porate affairs.

Amazon has long lobbied for the creation of a national standard for collecting state sales tax for online purchases, a change that would simplify their business practices.

In a recent town hall meeting with Washington Post employees, Amazon chief executive Jeffrey P. Bezos — who also owns The Post — cited state sales taxes as the lobbying issue he has been personally most engaged on. But so far, legislation at the heart of that change has been unsuccessful — much to Bezos’ chagrin.

“It’s even a bipartisan issue that both side agree on and we still can’t get it done,” he said. “It’s very puzzling to me as an outsider, I don’t know how you guys live here, honestly.”

But Amazon’s fastest-growing sector, Amazon Web Services, is far from an outsider in Washington. While most people probably know Amazon as an online retailer, its cloud computing segment is fast becoming a key pillar of its business. The subsidiary — which lets customers use Amazon’s Webbased servers for their computing needs — has deals with big tech firms such as Netflix and Airbnb, as well as some parts of the federal government.

“They are the primary cloud infrastructure provider to government,” said Lydia Leong, a distinguished analyst and vice president focused on information technologies at research firm Gartner.

The company’s cloud segment has done business with an alphabet soup of agencies including NASA, HHS, and DOJ. In 2013, Amazon was awarded a contract worth up to $600 million by the CIA to build and maintain a cloud system for America’s intelligence agencies — over the objections of IBM, which had offered to do the job for a lower price.

“The fact that AWS has had some success in its business with the public sector, and obviously with the CIA, speaks to the quality of what AWS has and offers,” said Carney.

The lobbying disclosures do not break down how much Amazon spent on each of the issues listed on the forms. And the company did not elaborate on which issues primarily drove the increase. But on some matters, such as drones, Amazon has made its interests clear.

Amazon dreams of delivering packages to customers’ doorsteps via unmanned aircraft, even though the proposed rules by the Federal Aviation Administration for commercial drone use wouldn’t allow for the type of flights the company hopes to make.

“The FAA has a tough job — so I think we can acknowledge that right away,” Bezos said when asked about his experience working with the agency. “What’s happening with drones is going to cause a lot of new rules to be written, and they’re going to have to be done very carefully.”

While Bezos said the agency has “very good intentions,” he also argued their approach perhaps may be a little “backward.”

The FAA is “a little st r a n gely h a mst ru n g because they have very little control over hobbyist drones and complete control over commercial drones,” Bezos said. A company like Amazon, he argued, can bring a higher “level of care and rigor” to drones than most hobbyists.

The FAA has been slower than some of the other jurisdictions where Amazon is also experimenting, Bezos said, citing “forward thinking” approaches in Canada, the U.K. and the Netherlands.

“There are a number of jurisdictions where I suspect we’ll see parcel delivery by drone first,” he said.