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Why Apple Spent $1 Million Lobbying the U.S. Government

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Apple may be one of the most valuable companies in the world, but in one area, it falls decidedly behind its rivals: its spending on lobbying the politicians of Washington.

According to its latest lobbying disclosure filing, Apple spent a total of $1,010,000 on lobbying activities in the September quarter, significantly below the level of spending that Google or even Facebook devoted to lobbying. Apple focused its lobbying activities on almost 40 specific issues, all disclosed in the filing. Apple’s lobbying activities seem tied to both existing and future products, with issues ranging from mobile medical devices and health apps to location-based services and open internet issues. The company also lobbied the U.S. government on issues related to government requests for data, copyright infringement, and corporate tax reform. Each of the specific issues that Apple lobbied for are as follows:

 

In the category of copyright, patent, and trademark issues, Apple’s lobbying activities focused on “S. 2267 – The Defend Trade Secrets Act,” “General Patent Reform,” “ITC Litigation Reform Issues,”  “General Copyright Issues,” “IP Infringement,” and “Piracy.” In the area of taxation and internal revenue code, Apple’s lobbying focused on “H.R. 684 – Marketplace Fairness Act of 2013,” “H.R. 2084 – The Partnership to Build America Act,” “S. 1957 – The Partnership to Build America Act,” “Corporate Tax Reform,” and “International Tax Reform.”

Under education, Apple’s lobbying focused on “General education technology funding,” “Issues related to digital textbooks,” “H.R. 2536 – Computer Science in Education Act,” and “Issues related to student privacy.” In the category of telecommunications, Apple’s lobbying activities focused on “Accessibility,” “Open Internet Issues,” “Childrens Online Protection,” “FCC Proceedings: 21st Century Communications & Video Accessibility Act Implementation,” and “S. 2032 – Smartphone Theft Prevention Act and related issues.”

 

In a category called “Environment/ Superfund,” Apple’s lobbying focused on “Electronic Waste, EnergyStar, EPEAT, Green Technology.” Under trade, both domestic and foreign, Apple’s lobbying activities focused on “Information Technology Agreement (ITA),” “Transpacific Partnership (TPP),” “Standards and Technical Barriers to Trade,” “Market Access, including Tariffs and Non-Tariff Barriers,” and “Issues related to Customs and Border Protection.”

In the area of consumer issues, safety, and products, Apple focused on “General Consumer Privacy Issues,” “Location-Based Services,” “Childrens Online Privacy & Safety,” “Battery Transportation & Safety Issues,” “Safe driving issues,” and “Issues related to consumer health data.” In the category of law enforcement, crime, and criminal justice, Apple’s lobbying focused on “Issues related to government requests for data,” “H.R. 3361 – The USA Freedom Act,” “S. 1599 – The USA Freedom Act,” and “S. 1215 – FISA Accountability and Privacy Protection Act.”

Under budget and appropriations, Apple’s lobbying activities focused on “Issues related to government procurement rules regarding technology.” In the area of media, which included both information and publishing, Apple’s lobbying focused on “Issues related to electronic book publishing.” In the category of immigration, Apple focused on “Issues related to immigration reform.” In the area of health issues, Apple’s lobbying activity focused on “Issues related to the regulation of mobile medical devices and mobile medical and health software applications.”

Those 39 issues sound like a lot, but Apple’s $1 million lobbying spending is on the low end of what’s become standard for major tech companies. Google spent $3.94 million on lobbying between July and September, a period during which Facebook spent $2.45 million, Microsoft spent $1.66 million,  and Amazon spent $1.18 million. As Computerworld reports, the only tech company to outspend Google during the third quarter was Comcast, which attempted to win politicians’ support for a merger with Time Warner, and spent $4.23 million trying.

 

Like Apple’s, Google’s filing, in particular, is a good illustration of the diversity of the issues that tech companies pursue in Washington. Google’s lobbying disclosure for the September quarter lists an interesting variety of issues, including “Regulation of online advertising,” “Mobile location privacy issues,” “H.R.1852: The Email Privacy Act,” “Connected education,” “Wind power,” “Advanced sensor-based technologies,” “Health data policy,” “High-skilled immigration and job creation,” “Small business advertising issues,” “Autonomous vehicle technology,” and “Unmanned aerial vehicle technology.” According to projections cited by Computerworld, if spending continues at its current levels, 2014 will be the fourth year that has spent more money on lobbying than any other tech company.

Facebook began lobbying in 2009 and is the fourth-largest spender so far this year (behind Google, Comcast, and AT&T). Its lobbying has covered online privacy and issues related to cyber breaches, intellectual property, and free trade. Amazon’s lobbying set a quarterly record for the company, and covered some of the same areas as Google and Facebook, but also included issues related to mobile payments and internet tax payments.

As Open Secrets reports, companies routinely spend billions of dollars every year lobbying Congress and federal agencies to achieve their legislative goals. Last (calendar) year, total lobbying spending reached $3.24 billion and involved 12,357 lobbyists. (Lobbying spending last year was down from its 2010 peak of $3.55 billion, and the number of lobbyists has declined every year since 2007, when there were 14,833 lobbyists.) As of September 22, Open Secrets had recorded $1.64 billion in lobbying spending so far this year, with 11,079 lobbyists involved.

 

In the “Computers/Internet” category on Open Secrets, the Center for Responsive Politics keeps tabs on the annual lobbying spending by 239 tech companies, including Google, Facebook, Microsoft, Amazon, Apple, and others. The top spenders on lobbying so far in 2014 are Google at $9.1 million, Facebook at $4.9 million, Microsoft at $4.4 million, Oracle at $3.4 million, and IBM at $2.9 million. Farther down the list, Amazon has spent $1.9 million so far this year, Apple has spent $1.9 million, Yahoo has spent $1.4 million.

Separately, in the “TV/ Movies/ Music” category on Open Secrets, Comcast lands in the top three spenders. Behind only the National Association of Broadcasters, which has spent $9.9 million on lobbying so far, and the National Cable & Telecommunications Association, which has spent $8.1 million, Comcast has spent $7.7 million on lobbying activities so far in 2014.

As Consumer Watchdog reported early in the year, Google led the lobbying spending by ten major tech companies last year. Combined, Google, Microsoft, Facebook, Amazon, Apple, Cisco, IBM, Intel, Oracle, and Yahoo spent $61.15 million in 2013. That money goes to lobbyists and lobbying firms, who use it to push clients’ legislative agendas to Washington politicians and their offices, and represented a 16 percent increase since 2012. Seven out of the ten companies on the list increased their lobbying spending in 2013, illustrating that the U.S.’s most powerful tech companies are growing increasingly political.

 

Lobbying is a tool that has been traditionally — and successfully — used by major companies, but it’s a recent development that Internet companies like Google and Facebook have become big spenders. As John Simpson, Consumer Watchdog’s privacy project director, said at the time, “Policymaking in Washington is all about how much money you can throw around. These tech guys are increasingly willing to spend whatever it takes to buy what they want.”

Lobbying disclosures are published quarterly, and accessible online at the Office of the Clerk of the U.S. House of Representatives. While the disclosures report overall spending and detail the specific areas that each company’s lobbying activities addressed, they don’t break out how much of the spending went to each issue or category of issues, and it’s virtually impossible to gauge how much or how little each company’s activities accomplished.

Trying to decipher the influence of a tech company’s, or any company’s, lobbying is also complicated by broad ambiguities in the lobbying industry itself. Experts say that while the amount of lobbying spending and the number of lobbyists in Washington are diminishing on paper, in reality they’re exploding. American University professor James Thurber, who has studied congressional lobbying for more than thirty years, told The Nation’s Lee Fang in February that “most of what is going on in Washington is not covered” by the lobbyist registration system. Thurber said that the actual number of working lobbyists is close to 100,000, and estimates that the industry brings in $9 billion a year.

 

Lee Drutman, a lobbying expert at the Sunlight Foundation, estimated that at least twice as much is spent on lobbying as is officially reported, and The Nation itself found that in some cases, the quarterly registration system shows only a tenth of the amount that companies spend to influence how the government views and treats an issue.

Many firms and individuals in the “influence-peddling industry” operate openly without registration. The Nation reports that Catherine Novelli, Apple’s former vice president of “worldwide government affairs,” earned more than $7.5 million in 2013 for helping the company to address congressional inquiries about its tax strategies, all without registering as a lobbyist. In all likelihood, Apple is not the only tech company to spend money on what amounts to unregistered efforts to influence Washington.

While official records show that Apple has been slow to spend significant amounts of money on lobbying Washington politicians, that could stand to change, or even be changing already, given Apple’s current tax problems, the issue of newly robust iPhone encryption, the ongoing debate over government requests for information and their implications for consumer privacy, and even Apple’s foray into the handling of consumers’ sensitive health data with the introduction of HealthKit. After all, it seems only logical for Apple to insure its place ahead of rival tech companies with the cost of trying to keep things going its way in Washington.