Figures released last week show that Google spent a record amount of almost $6m lobbying in Washington DC in the past three months, putting the Silicon Valley behemoth on track to be the top corporate lobbying spender in the US. Last year it ranked No 2, behind Comcast.
Given the increased antitrust scrutiny that is coming from the Democrats’ new “Better Deal” policy platform, Donald Trump’s random tweets attacking Google’s fellow tech giant Amazon for its connection to the Washington Post, and his adviser Steve Bannon’s recent comments that Google and Facebook should be regulated as utilities, it is likely Google will only increase its lobbying expenditure in the next few months.
The largest monopoly in America, Google controls five of the top six billion-user, universal web platforms – search, video, mobile, maps and browser – and leads in 13 of the top 14 commercial web functions, according to Scott Cleland at Precursor Consulting.
As the controversial Trump-supporting PayPal billionaire Peter Thiel points out, companies like Google don’t like to advertise this fact. They “lie to protect themselves”, Thiel says. “They know that bragging about their great monopoly invites being audited, scrutinized and attacked. Since they very much want their monopoly profits to continue unmolested, they tend to do whatever they can to conceal their monopoly – usually by exaggerating the power of their (nonexistent) competition.”
For years, banks, oil companies and defense contractors dominated the Washington lobbying business. Because controlling government regulation and government contracts was key to their business success, shareholders saw the expenditure of millions a year on lobbyists and political contributions as an unavoidable cost of doing business.
When the federal government began pursuing Microsoft for antitrust violations in 1992, the Seattle software giant was caught off guard. It had almost no presence in Washington and spent almost no money on lobbyists.
That soon changed. For its part, Google, as it began to assert its domination of the search advertising business, started to take steps to ensure it had a strong presence in Washington. In 2002, Google spent less than $50,000 on lobbyists; 10 years later it was spending more than $18m a year.
Now, with a real threat of antitrust and privacy regulation on the horizon, Google has come to the same conclusion those earlier industries did – that controlling Washington politicians and regulators is a cost of doing business.
And the company has not been afraid to use its muscle. The probable reason Google lost in Europe and won in the US in its battles over favoring its own products over those of smaller players is more about the campaign finance system than the differing regulatory regimes on either side of the Atlantic.
Since Google began spending more on lobbying than defense giants such as Boeing around 2010, it has been able to intimidate American legislators and regulators, and it has tools at its disposal far more powerful than anything deployed by Boeing.
In 2012, when the House of Representatives was considering the Stop Online Piracy Act (Sopa), which aimed to crack down on copyright infringement by restricting access to sites that host or facilitate the trading of pirated content and specifically targeted search engines such as Google that linked to pirate sites, Google put this image on its search page for 24 hours:
Note the use of the word “censor”, which was viewed by 1.8 billion people in 24 hours, and the link on the “tell Congress” line, which led users directly to emailing their members of Congress. Needless to say, Congress’s email servers were overwhelmed and two days later, the House judiciary chairman, Lamar Smith, withdrew the bill.
The very notion that getting Google not to link to criminal pirate sites constituted “censorship” is an exercise in Orwellian double-speak. But the effect it had on legislators was to make them essentially Google captives.
So captive, in fact, that Google was able to enlist many of these same legislators in its battle against the European Union, whose antitrust regulators are more willing to call Google a monopoly. As the Guardian reported: “Republican and Democratic senators and congressmen, many of whom have received significant campaign donations from Google totaling hundreds of thousands of dollars, leaned on parliament in a series of similar – and in some cases identical – letters sent to key [members].”
It is important to understand that Google is not politically neutral. Though its executives may signal liberal stances on gay rights and immigration, it is at heart a libertarian firm which believes above all that corporations should not be regulated by the government. Just as extreme lobbying by the bank industry led to a loosening of regulations, which then resulted in the great mortgage scam of 2008, Google’s efforts to keep the government out of its business may have deep implications for the next 10 years.
Much of Google’s lobbying may be directed toward its future business. That will be running artificial intelligence networks that control the transportation, medical, legal and educational businesses of the future. In a speech last Saturday to the National Governor’s Conference, the tech entrepreneur Elon Musk stated: “AI is a rare case where I think we need to be proactive in regulation instead of reactive.”
Coming from a Silicon Valley libertarian, this was a rare admission, but Musk went on to say: “There certainly will be job disruption. Because what’s going to happen is robots will be able to do everything better than us … I mean all of us.”
Both Google and Facebook pushed back hard against Musk’s remarks, because they have achieved their extraordinary success by working in an unregulated business environment.
But now, for the first time in their histories, the possibility of regulation may be on the horizon. Google’s response will be to spend more of its $90bn in cash on politicians. K Street is lining up to help.
Jonathan Taplin is the director emeritus of the Annenberg Innovation Lab at the University of Southern California, and the author of Move Fast and Break Things: How Facebook, Google and Amazon Cornered Culture and Undermined Democracy.