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Wednesday, January 27, 2021

Big Tech turns its lobbyists loose on Europe, alarming regulators

As the European Union has become the global leader in tech regulation, these companies have increasingly focused on Brussels in hopes of choking off even stiffer rules before they spread.

By: New York Times | Updated: December 14, 2020 8:02:09 pm
Google and other American tech giants are engaged in a broad lobbying campaign to stop stronger regulation against them. (Jack Taylor/The New York Times)

(Written by Adam Satariano and Matina Stevis-Gridneff)

A leaked document jolted the European Union capital of Brussels in October, laying out in painstaking detail plans by Google to undermine new legislation that could severely damage its digital advertising business.

“Academic allies” would raise questions about the new rules. Google would attempt to erode support within the European Commission to complicate the policymaking process. And the company would try to seed a trans-Atlantic trade dispute by enlisting U.S. officials against the European policy, according to a copy reviewed by The New York Times and confirmed by Google.

For many officials in Brussels, the document confirmed what they had long suspected: Google and other American tech giants are engaged in a broad lobbying campaign to stop stronger regulation against them.

The European Commission in Brussels, Oct. 31, 2020. (Dmitry Kostyukov/The New York Times)

As the European Union has become the global leader in tech regulation, these companies have increasingly focused on Brussels in hopes of choking off even stiffer rules before they spread. American lawmakers and regulators have already become much more aggressive. Last week, federal and state officials accused Facebook of illegally crushing competition. In October, the Justice Department accused Google of illegally protecting its monopoly over search.

In Europe, the companies are spending more than ever, hiring former government officials, well-connected law firms and consulting firms. They funded dozens of think tanks and trade associations, endowed academic positions at top universities across the Continent and helped publish industry-friendly research by other firms.

In the first half of 2020, Google, Facebook, Amazon, Apple and Microsoft declared spending a combined 19 million euros (about $23 million) equal to what they had declared for all of 2019 and up from 6.8 million euros in 2014, according to Transparency International, a group that monitors EU lobbying. The spending is helping to deliver access; the companies and their allies reported hundreds of meetings with officials at the European Commission and the European Parliament.

“The budgets are really unrivaled — we’ve never seen this kind of money being spent by companies directly,” said Margarida Silva, a researcher at Corporate Europe Observatory, a group that also tracks lobbying in Brussels. The totals are probably much higher, she noted, because disclosure rules do not capture all the spending on law firms, academic partnerships and activities in individual countries.

While the spending is less than in the United States, the growing influence industry is alarming EU officials who believe that Big Tech is contributing to a Washingtonization of Brussels, giving money and connections an upper hand over the public interest.

“This is a trend that has been going on for years — a professionalization of the lobbying industry in Brussels,” said Max Bank, an investigator at LobbyControl, a German-based group that has been studying corporate influence.

Google, Amazon, Apple and Facebook declined to comment. In public statements, all have expressed a desire to work with European officials, while voicing concerns that the proposed laws could harm innovation and the European economy. Casper Klynge, who oversees European government affairs for Microsoft, said in a statement that the European Union “has been and remains an important stakeholder for our company” and that Microsoft sought to be a “constructive and transparent partner to European policymakers.”

Despite the lobbying, the industry has had few major successes. European leaders like Margrethe Vestager, who oversees digital policy, have called the companies threats to democracy and anti-competitive and have taken several steps to rein them in. Amazon, Apple, Google and Facebook either are under antitrust investigation or have already been penalized billions of dollars. In recent years, the EU has adopted industry-opposed laws on issues including privacy and online copyright.

Alexandra Geese, a German member of the European Parliament who works on digital issues, said many officials viewed the companies with suspicion. Before in-person meetings were scaled back because of the pandemic, she regularly turned down invitations from tech lobbyists to social gatherings, she said.

“I don’t think we should have these conversations over a very expensive bottle of Bordeaux,” Geese said.

But the industry does not seem deterred, even as it faces what many believe will be its toughest fight yet.

On Tuesday, EU officials led by Vestager will introduce some of the world’s most far-reaching technology regulations. The rules take aim at so-called gatekeeper platforms, like Amazon, Apple, Facebook and Google, which have an outsize role in the digital economy.

Among the expected changes are rules for Facebook, Twitter and YouTube, which is owned by Google, about moderating user-generated content. Other requirements would make companies disclose more about how services like Google and Facebook’s digital advertising products worked. The largest companies could be forced to share some data with small rivals. Stiffer competition rules could prevent the companies from giving their services preferential treatment over small rivals, and limit their ability to move into new product categories.

“There is a lot to lose for the tech industry with the new legislation,” Bank of LobbyControl said.

The laws are not expected to be approved before 2022, giving the companies ample time to influence the debate.

In October, the leaked document showed how Google tried to influence the European debate before a draft was even introduced. It included plans to enlist U.S. officials from embassies across Europe and in the Office of the U.S. Trade Representative. It suggested talking points for Google supporters, such as the risk to the economy during the pandemic.

After details of the document were published by Le Point, a French magazine, many European officials expressed outrage and resolved to press ahead with the new laws. In a meeting after the leak, Sundar Pichai, Google’s chief executive officer, apologized to Thierry Breton, a European commissioner helping to draft the new rules.

Yet Google and its allies appeared to be moving forward with ideas in the plan nonetheless. In Washington, the Internet Association, a trade group representing Google and other tech giants, submitted comments to the U.S. trade representative, encouraging the federal government to “act decisively and quickly in order to prevent the rapid expansion of harmful initiatives” in Europe.

Tiemo Wölken, a member of the European Parliament from Germany who has been involved in the policy writing, said tech companies had allies in Brussels. After he introduced a proposal to explore a ban on targeted advertising, which would have a devastating effect on Google and Facebook, the industry worked with news publishers to get an amendment introduced to remove the wording, he said. Wölken, who has pushed for tougher lobbying rules, said he had fought off the effort by a single vote, but expects the issue to come up again.

European officials criticized the biggest tech companies for laundering their influence through groups that appear impartial. In October, the European Center for International Political Economy published a report that said new tech regulations would cost the European economy 2 million jobs and 85 billion euros in lost gross domestic product. The European Center for International Political Economy is one of at least 36 trade groups, associations and think tanks that Google funds, according to Corporate Europe Observatory.

“People will always claim their political, academic or intellectual independence — they’d reject that they’ve been influenced,” said Marietje Schaake, a former member of the European Parliament who now teaches at Stanford University. “But the question then becomes, why are the firms spending so much money in Brussels?”

At one influential nonprofit, European Digital Rights, Jan Penfrat recalled getting phone calls last year from Google, Facebook and others seeking cooperation and offering support soon after he took a leadership position.

“It was like they were trying to co-opt us and get us on their side,” Penfrat said. “That was the first hint and it was alarming.”

Paul Hofheinz, a former Wall Street Journal reporter who co-founded the Lisbon Council, a research group in Brussels that has faced criticism from watchdog groups for accepting money from Google, said having corporate partners ensured that research was more well rounded.

“Our views are independent. Period,” Hofheinz said in an email. “I don’t know why these campaigning organizations think we’re putzes who can’t reason things out for ourselves. There’s something very insulting in that idea. And very wrong.”

Few predict that lobbying in Brussels will reach the scale of Washington, where corporations and individuals face fewer restrictions to spending money on political campaigns. But European officials are seeing more signs of the influence industry’s growth, including a robust commercial real estate market bolstered by the arrival of new corporations, lobby firms and think tanks.

Before the pandemic, Silva of the Corporate Europe Observatory offered a “lobbyist walking tour” around Brussels, including a pass by Google’s office overlooking the pond in Leopold Park.

“The risk,” she said, “is we are creating a system that benefits those with the most money.”

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