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Technology Brief #44

 New Top Dogs, Same Old Tricks: Uncovering the Power of Big Tech,

Part 1

Washington’s Biggest Influencers

By Scout Burchill

April 24, 2021

Summary:

Move over Big Oil and Big Tobacco. According to a new report by Public Citizen, Big Tech companies now run the largest lobbying operations in Washington. For the first time ever, Facebook and Amazon topped the 2020 list of individual corporate lobbying spenders. Facebook spent close to $20 million and Amazon was not far behind spending close to $19 million, about 30% more than Comcast Corporation, the third highest spender. Since 2018, Amazon and Facebook have increased their spending by 30% and 56%, respectively.

These sums only represent reported federal lobbying dollars. Additional spending to gain influence through campaign contributions, Super Pacs, advertising campaigns, research funding, non-profits, associations, federations or trade groups, as well as state, local and international political spending are not included. Taking reported campaign contributions into account, Amazon and Facebook spent a combined $124 million in lobbying and campaign contributions during the 2020 election cycle alone.

These figures barely scratch the surface of what Big Tech companies are spending to influence and capture the Washington political establishment.

Eclipsing the titans of yesteryears, Big Oil and Big Tobacco, Big Tech spent close to twice as much as Exxon and Philip Morris and outspent every telecom conglomerate and defense giant in Washington. This is a dramatic turn of events from less than a decade ago when Big Tech companies barely made these lists.

Google is the exception, having been in the top 10 since 2012. Their decision to significantly cut lobbying in 2019 as part of a planned “corporate restructuring” program came as antitrust criticism grew and the DOJ prepared their investigation. It is unclear how Google’s restructuring plans have affected their influence campaigns.

Analysis:

These figures are important signifiers of the striking shifts in power and economic might that have taken place in the U.S. economy over the past decade. Traditionally, well-known heavyweights like defense contractors, the oil and gas industry, the financial industry and the telecommunications conglomerates tend to top the list. While these industries certainly still shell out plenty of dollars, Public Citizen’s report confirms the presence of the newest top dogs in town. Although these figures may seem large, they barely scratch the surface of Big Tech’s well oiled influence machine.

Take Amazon as an example. Amazon runs an incredibly sophisticated influence campaign, in which lobbying dollars and campaign contributions make up only the tip of the iceberg. For one, Jeff Bezos owns the Washington Post, one of the largest newspapers in the United States with significant sway in D.C. politics. Further consolidating his grip on the media, he has also become a member of the Gridiron Club, one of the oldest and most prestigious journalistic organizations in Washington D.C., wherein journalists cozy up to the same political officials they are supposed to be critical of in their coverage.

Bezos’ D.C. clout does not end there. Bezos also owns the biggest house in Washington D.C., a former museum spanning 27,000 square feet and outfitted with over 20 bathrooms, which he uses to host lavish parties and schmooze with the Washington political and cultural elite. His megamansion is a stone’s throw away from where Amazon’s second corporate headquarters are set to be established in Crystal City, Virginia. HQ2, as it is called, will undoubtedly help facilitate closer relations between the company and the D.C. establishment.

Amazon has already earned billions of dollars in federal contracts with its Web Services division, and only narrowly missed out on a $10 billion dollar deal with the Pentagon after former President Trump snubbed Amazon for Microsoft. Not to mention, by placing HQ2 in the Arlington suburbs, Bezos has effectively enriched countless bureaucrats by boosting the local economy and further spiking property values. Keep in mind, this is only a snapshot of Amazon’s influence efforts in the metro D.C. area. Nonetheless, it makes Facebook’s $20 million in lobbying look like small peanuts.

The insidious and anti-democratic influence of money in politics is a well trodden topic in today’s political discussions. Despite this, it is worth reiterating just how powerful corporate and moneyed interests are in modern American democracy. A newly published study by the political reform group Issue One sheds light on this concentration of power. According to their findings, 1 in every 13 dollars dollars spent on federal election campaigns since 2009 has come from exactly 12 donors. Whether or not the candidates this type of money tends to pool behind are successful (think Bloomberg’s disastrous run) the effect of this concentration of power on the political process is tangible and real.

In 2014, Martin Gilens from Princeton University and Benjamin Page from Northwestern University published a seminal study asking the basic question of who governs the United States. Analyzing data from over 1,700 areas of policy between the years 1981 and 2002, they found that, “the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” The preferences of powerful business organizations and a small number of affluent Americans, however, were found to be highly influential in policy making in the United States. So the next time Mark Zuckerburg calls for new internet regulations to address the harms of Big Tech, which he has done multiple times, including in the Opinion Section of the Washington Post, think of this study and take a moment to consider who will be helping write those regulations.

There is one final point worth mentioning about Amazon and Facebook’s meteoric rise in political spending. It is likely not a coincidence that Big Tech has reached the zenith of its spending powers at the same time unprecedented amounts of scrutiny and criticism, from both the public and elected officials, are being lobbed their way. Facebook is now one of the most hated companies in America, and their 56% jump in political spending since 2018 reflects this new reality.

Despite marketing themselves as allies of progressive causes, Big Tech does not exactly have an ally in the White House. President Biden has shown signs that he is more than willing to impose stricter regulations on Big Tech. Within this context, these spending figures on lobbying by Big Tech also suggest an underlying anxiety about the future. Big Tech companies see the writing on the wall and are marshaling their resources to ensure that they get to help write the rules when the time comes.

Engagement Resources:

Public Citizen’s Report on Lobbying and Campaign Contributions

https://www.citizen.org/article/big-tech-lobbying-update/

Gilens and Page’s 2014 Study

https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B

Gilens and Page’s 2014 Study: Summary Outlining Major Points For Quick Reading

https://lwvaustin.org/publications/Money%20in%20Politics/Gilens%20&%20Page%20article%20summary.pdf

One Issue’s Report and NYT Coverage

https://www.issueone.org/wp-content/uploads/2021/04/Issue-One-Outsized-Influence-Report-final.pdf

https://www.nytimes.com/2021/04/20/us/politics/megadonors-political-spending.html

Jeff Bezos’ D.C. Megamansion

https://www.businessinsider.com/amazon-hq2-why-washington-dc-will-win-jeff-bezos-mansion-2018-1

https://www.dailymail.co.uk/news/article-7931191/Jeff-Bezos-throws-lavish-party-new-Washington-DC-mansion.html

Amazon Pentagon Cloud Deal

https://www.bloomberg.com/news/articles/2020-12-15/amazon-claims-bid-for-pentagon-cloud-deal-was-cheaper-superior

Reporting on Google’s Corporate Restructuring

https://observer.com/2019/06/google-lobbying-firms-antitrust-probe/

10 Most Hated Companies in America 2020

https://finance.yahoo.com/news/10-most-hated-companies-america-100021771.html

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