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How Much Influence Does Google Have in Washington?

TECH CHEAT SHEET
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Like many powerful tech companies, Google spends millions every year on lobbying to extend its influence to Washington. Consumer Watchdog reported in January that Google spent a record $16.83 million on lobbying federal regulators and lawmakers in 2014, compared with $14.06 million in 2013, a 20% increase. Microsoft, which used to regularly outspend Google, spent only about half of what Google spent, and Google was the top spender among the tech industry’s most influential companies.

Politico’s Tom Romm reported that tech companies’ spending on lobbying “reflects the tech sector’s evolution from an industry that once shunned Washington into a powerful interest that’s willing to lobby extensively to advance the debates that matter most to companies’ bottom lines.” He referred to Google as “the leader of the tech pack” in lobbying, noting that 2014 was its second-most expensive year in lobbying, after 2012, when it battled a federal antitrust investigation. (More on that soon.) He reported that Google’s D.C. operation relocated last year to a 54,000 square foot office just steps from the Capitol.

Google’s lobbying last year covered tech policy issues likes online advertising and data privacy, but also related to the broad range of issues that are now important to the Internet giant, like patents, labor issues, drones, health data, immigration, and international tax reform. Google’s spending increase contrasted with the general trend toward decreased spending on federal lobbying by tech companies — though Amazon, Apple, and Facebook also set new corporate records for spending in 2014 — and coincides with its expansion into business areas covered by extensive regulations and laws.

At the time that lobbying spending for last year was disclosed, The Verge noted that spending doesn’t translate directly into influence. But it’s still an important number for Google and for other companies in the tech industry. Google and its allies in the tech industry had been battling with established lobbying giants like Comcast and AT&T over net neutrality. As Logan Koepke reported for Backchannel in February, the Federal Communications Commission (FCC) voted 3-2 to approve Title II-backed net neutrality regulations. As Koepke noted, the decision didn’t reclassify Internet service providers as a public utility, as some headlines wrongly declared, though reclassifying ISPs under Title II allows the FCC to treat them as “common carriers.”

Nathan Ingraham, writing for The Verge, notes that Google has been a major influence on U.S. politics for years, though it’s tried to keep that influence out of the spotlight. But as its influence grows, that’s becoming more difficult to do. A recent report by The Wall Street Journal suggested that Google tampered with a 2012 investigation by the Federal Trade Commission (FTC) into whether the search engine giant was engaging in anticompetitive practices.

“Google’s access to high-ranking Obama administration officials during a critical phase of the antitrust probe is one sign of the Internet giant’s reach in Washington,” wrote Brody Mullins for the Journal. “One of Google’s biggest victories is the defeat of the FTC’s antitrust probe. A lawsuit would have challenged the core of some Google business strategies. In a sign of the stakes, Google announced the hiring of 12 additional lobbying firms one week after news broke that the FTC had begun subpoenaing documents related to the investigation.”

While the FTC decided not to bring a lawsuit against Google — the company made voluntary changes and the investigation was closed — reports published by the Journal indicated that the commission was deeply divided on whether it should sue. The reports also exposed the close ties between Google and the Obama administration. The Journal quoted an FTC staff report which characterized the evidence against Google as “a complex portrait of a company working toward an overall goal of maintaining its market share by providing the best user experience, while simultaneously engaging in tactics that resulted in harm to many vertical competitors, and likely helped to entrench Google’s monopoly power over search and search advertising.” The implication of its reporting was that Google used its influence in Washington to influence the FTC’s decision in its favor.

Google denied that implication with a post on its Public Policy blog, using GIFs and flippant language to refute The Wall Street Journal’s report that the company “wielded undue political influence” in its dealings with the U.S. government. Google’s argument largely echoes the FTC’s statement on the issue, maintaining that the commission’s decision “was in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel” and that Google has “strong pro-competitive arguments” on its side. The FTC’s statement said:

Today’s Wall Street Journal article “Google Makes Most of Close Ties to White House” makes a number of misleading inferences and suggestions about the integrity of the FTC’s investigation. The article suggests that a series of disparate and unrelated meetings involving FTC officials and executive branch officials or Google representatives somehow affected the Commission’s decision to close the search investigation in early 2013. Not a single fact is offered to substantiate this misleading narrative.

The company admits that it has had many meetings with the White House over the years, responding to The Wall Street Journal’s tally of 230 meetings that employees of the company have had with senior officials since Barack Obama took office. But Google says that its records show that 33 of those visits were by people who weren’t employed by Google at the time. More than five visits were by a Google engineer who was on leave and helping to fix the technical issues with the Healthcare.gov website. And Google points a finger at other major tech companies, tallying 270 visits from Microsoft and 150 from Comcast over the same time frame.

“And the meetings we did have were not to discuss the antitrust investigation,” the post notes.  “In fact, we seem to have discussed everything but, including patent reform, STEM education, self-driving cars, mental health, advertising, Internet censorship, smart contact lenses, civic innovation, R&D, cloud computing, trade and investment, cyber security, energy efficiency and our workplace benefit policies.”

Several meetings were advertising industry meetings, attended also by Microsoft, Yahoo, AOL, and others. More than a dozen visits were for production crews covering the YouTube interviews with the President, and one of the meetings mentioned by the Journal was a meeting with chairman Eric Schmidt, chief legal officer David Drummond, and several other technology companies to discuss copyright legislation. In Ingraham’s estimation, Google’s attempt at claiming that it doesn’t have an influence on the United States government “goes a long way towards showing just how much of a seat at the table the company really has.”

There’s been considerable backlash against Google in the wake of revelations about the FTC investigation. As Business Insider reported recently, consumer advocacy groups in the U.S. are calling on the FTC to reopen its investigation into Google, citing the revelation that Google was threatening websites with removal of their content from its search engine if they didn’t let Google use that content. In the European Union, investigations into Google’s practices are still ongoing, and many hope that the EU will crack down on the company’s practices. Google insists on its innocence, and the FTC stands by its decision not press charges, but it’s hard to evaluate the situation without coming to the conclusion that tech companies have a considerable amount of influence in Washington these days.