Internet Giants Spend Record Amounts, Electronics Firms Trim Budgets

When it comes to formulating government policies, Silicon Valley’s most powerful tech executives always have a seat at the table – literally, as was the case during the White House tech summits we’ve seen happen. They also make sure their voices are heard through lobbying the House, Senate, White House and federal agencies.

And 2018 proved to be another big year for lobbying, especially for internet companies. It’s easy to see why. Besides intense scrutiny from federal regulators for facilitating Russian interference in the U.S. elections, they faced criticism for their handling of personal data, complaints that they are biased against conservatives and calls to hike the local taxes they pay.

Alphabet Inc.’s (GOOG) Google spent the most of any other tech company in the country, according to OpenSecrets. Its total expenditure for the year was an eye-popping $21.74 million.

Google’s reach extended to every manner of policy decision. Last year, it lobbied on bills related to political ads, music licensing, autonomous vehicles, drones, green cards, data privacy, government surveillance, human trafficking, patent reform, corporate tax reform, the H-1B temporary worker visa, Deferred Action for Childhood Arrivals (DACA), cybersecurity and the opioid crisis.

Internet companies Google, Facebook Inc. (FB), Amazon.com Inc. (AMZN), Twitter Inc. (TWTR), Alibaba Group (BABA) and Salesforce.com Inc. (CRM) spent record amounts last year to influence the government. Altogether, internet companies spent $77.2 million last year, up from $68.61 million in 2017. Over 60% of this was by the top three spenders — Google, Amazon and Facebook.

There was a slight drop in how much electronics companies that develop software and hardware computer technologies spent. The total for this industry fell from $147.33 million in 2017 to $144.8 million in 2018.

Microsoft Corp. (MSFT), Samsung Electronics America, Intel Corp. (INTC), Siemens AG and Dell Technologies were the only top spending companies (above $3 million) in this category to increase their budgets last year. Oracle Corp. (ORCL) and Apple Inc. (AAPL) spent record amounts in 2017 but did not loosen their purse strings again for 2018.

Both Google and Amazon stepped up lobbying on transportation in 2018 and focused on bills that would establish a federal framework for autonomous vehicles and provide regulatory relief. Google even visited a skeptical Sen. Dianne Feinstein in Washington D.C. last year to pitch her on self-driving technology, according to Recode. It was ultimately a failed effort.

The companies saw more success with the FAA Reauthorization Act of 2018, which was signed into law in October 2018 and paves the way for drone delivery.

“Taxes” continued to get many mentions in Amazon’s lobbying reports after several attacks from President Trump on the matter. In 2017, the company caved and began collecting sales taxes in all states that have them, but this is only on goods sold directly by Amazon. Ironically, Amazon supports bills that would authorize states to require remote sellers to collect taxes and spent lobbying dollars to push for them to be passed. It’s possible the firm realizes that collecting state sales taxes will make things significantly harder for its smaller online competitors. So contrary to what Trump says, Amazon does support internet taxes. Similarly, Amazon also lobbied for the federal minimum wage to be increased after it raised its own minimum wage, leading some to believe this was another strategy to hurt its competitors.

Trump has also said the United States Postal Service charges the firm too little, and included in Amazon’s lobbying reports are “issues related to postal reform and postal rates including the Postal Service Reform Act of 2017 (H.R. 756).”

Pervasive in Google’s lobbying filings are mentions of competition and antitrust issues, while Facebook, which was hit by massive data breaches and revealed data-sharing partnerships with Chinese firms, focused most on “platform integrity” and “issues related to data security, transparency and disclosures.”

Both Google and Facebook also lobbied the government on the Honest Ads Act that would bring more transparency to political advertising on online platforms if passed.

Tech companies have continued fighting the government on surveillance issues, especially government requests for data. Google has been a strong supporter of the Email Privacy Act (H.R. 387), a bill introduced in January 2017 that would require the government to gain a warrant before requesting access to private emails. The bill was also lobbied for by Twitter and Facebook. Lobbying reports of Google and Facebook also mention the Foreign Intelligence Surveillance Act, which allows for warrantless surveillance by the NSA and was reauthorized in January 2018.

While Facebook wants to curb government surveillance, it is actively fighting at the same time to protect its own access to user information. The company is lobbying against the BROWSER Act, which would require it to allow users to opt-in or opt-out of the use, disclosure or access to sensitive data.

It also lobbied on the threatening Journalism Competition and Preservation Act of 2018 that would allow newspaper companies to negotiate “fair terms that would flow earned subscription and advertising dollars back to the publishers, while protecting and preserving Americans’ right to access quality news.” 

As the current administration takes away or threatens to take away things Big Tech holds dear, like net neutrality, visas and internet privacy, and Congress members draw up bills to force companies to take responsibility and be held accountable for misleading political ads and privacy violations, the industry is rapidly losing the perception game. As Buzzfeed cautioned, Big Tech now has powerful people on both ends of the political spectrum thinking it needs reining in. 

While the leaders in the industry were once celebrated as noble and forward-thinking powerhouses, experts now worry tech giants are monopolies unconscionably profiting as they harm everything from the the arts to small businesses, human relationships and democracy.

Sen. Elizabeth Warren, who is running for president, recently published a Medium post in which she advocated for “breaking up Amazon, Facebook, and Google.” She wrote, “We must ensure that today’s tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy.”

Criticism is also emanating from the industry itself. Salesforce (CRM) CEO Marc Benioff wants Facebook to be regulated like a tobacco company because of its addictive nature. A former employee said the company can’t be trusted to regulate itself in a New York Times op-ed. A former Apple executive and two investors want the company to be more proactive about preventing user addiction.