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Five of the largest U.S. tech companies poured a combined $64.2 million into federal lobbying efforts last year, according to new ethics reports. That's a more than 10 percent increase over their record-setting 2017 spending.
Google alone made up about one-third of that total, spending more than $21.2 million in 2018. That's up almost 17 percent from the previous year, when it spent more on federal lobbying than any other company. Amazon spent $14.2 million, Facebook spent $12.6 million, Microsoft $9.5 million and Apple $6.6 million. Their disclosures, released ahead of a midnight deadline, showed the Big Five invested to sway the Washington debate on a wide range of policy issues, ranging from privacy to election security to antitrust.
This drastic increase in lobbying cash could prove a formidable hurdle to advocates and privacy hawks in Congress trying to pass a tough federal privacy bill. Lawmakers are insisting that 2019 will be the year they finally pass a national framework -- and privacy advocates are increasingly concerned that tech companies’ well-funded lobbying machine could outweigh consumers’ voices on Capitol Hill.
“The big concern is that the lobbying influence will result in a debate focusing on the wrong questions,” said ACLU senior legislative counsel Neema Singh Guliani. “The central question should be, ‘What is good for consumers?’"
The eye-popping sum comes as the tech companies find themselves clashing with Washington more than ever. Lawmakers and regulators have been sounding the alarm about companies' lax data practices and the misuse of consumer information by third parties since the public learned of Facebook's Cambridge Analytica scandal, in which a political consulting firm that did work for the Trump campaign used people's data without proper permission. They're also scrutinizing whether the companies have done enough to crackdown on disinformation campaigns after Russia used social media platforms to spread fake news and information during the 2016 campaign.
Microsoft and Apple largely managed to avoid the Washington spotlight in 2018, and Apple's spending on lobbying last year decreased as compared to 2017.
Technology companies are now coming to the table for the first time to help craft federal privacy legislation that would likely supersede a stringent new state law in California, which has been signed by the governor and will take effect in 2020. The law will give consumers the right to know what information companies collect about them, what they’re doing with it and who they share it with. This new California law could pose a serious challenge to many of the companies’ data collection practices and create serious impediments for businesses that rely on targeted advertising. And several other states are looking to considering their own actions on privacy this year.
A federal privacy law that preempts state level legislation would be "a bad deal" for consumers, Singh Guliani told me. "We need baseline standards, but states need to have the flexibility to respond to new privacy threats," she said.
In addition to lobbying, privacy advocates are already on alert for signs that the technology industry is dominating the debate. In the fall, the Senate Committee on Commerce, Science and Transportation held a major privacy hearing, intended to kick off discussion about privacy at the national level in the wake of California passing its own privacy law. The hearing featured executives from several major technology companies, but it did not include consumer privacy advocates. The move sparked criticism, and the committee later held a hearing that featured such advocates.
“We wouldn’t want that perspective to dominate the debate,” Singh Guliani told me.
As my colleague Tony Romm reported this morning, the increased oversight of the industry is not likely to go away in 2019.
“When you come of age as an industry, as we have, and you make so many things possible, you’re also going to be under scrutiny for all of the consequences of that, too,” Linda Moore, president of the trade group TechNet, told Tony.
It's not just the companies' spending on lobbying that could sway the privacy debate in Washington. Their increased influence is also a reflection of the former high-profile policymakers and regulators who many technology companies have hired in recent years. Jeff Chester, the executive director for Center for Digital Democracy, told me that there’s been a “revolving door” between both Republican and Democratic administrations and the technology industry lobby.
“There is ultimately a huge conflict of interest,” he told me, as Congress seeks to pass privacy legislation.
He's not optimistic that Congress will be able pass legislation with serious teeth, and he's instead focused his efforts on grassroots privacy campaigns.
“It’s very likely the federal bill is going to be a weak one and not really do anything,” he told me.
Though the privacy debate has heated up in Washington since California passed its law, the Center for Democracy in Technology’s Director of the Data Privacy Project Michelle Richardson tells me it’s still early innings. Senate Democrats have floated some national privacy legislation, and Sen. Marco Rubio (R-Fla.) introduced a privacy bill last year. But she’s expecting bipartisan privacy bills to be introduced in the spring.
Technology industry trade groups have been pushing frameworks for what a federal privacy law should include. The Internet Association sent me a statement that says it supports a privacy bill that would provide Americans "meaningful control over the data they provide to companies across all industries, including the ability to access, correct, delete and download data."
Richardson said at this early stage, it's hard to judge whether the industry groups will support legislation that has many of the tough enforcement provisions that privacy advocates are seeking.
“It’s hard to judge them in detail,” she said. “We’ll have to see how all of these are going to transform into actual legislative language.”
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BITS: Some businesses try to manipulate the company-ratings website Glassdoor by posting positive reviews to boost their ratings and appear more attractive as employers, according to the Wall Street Journal's Rolfe Winkler and Andrea Fuller. In their attempts to cast themselves in a positive light, some firms enlist employees to flood Glassdoor with high ratings. Some of the businesses that have seen a surge in reviews on the site include tech companies such as LinkedIn and Slack, though companies in other industries have also seen spikes. Elon Musk's SpaceX encouraged employees to post reviews with the goal of having the company be included in Glassdoor's “Best Places to Work” annual ranking.
“In the Journal’s analysis, five-star ratings collectively made up 45% of reviews in the months where the number of reviews jumped, compared with 25% in the six months before and after,” Winkler and Fuller reported. “While it isn’t possible to determine from the data alone what caused each spike, a statistical test shows the likelihood that so many would skew positive by chance is highly improbable.”
NIBBLES: IBM chief executive Ginni Rometty warned that while governments seek to protect the “privacy of consumer data,” an overreaction could damage the digital economy, according to CNBC. “Every government is itching to regulate, and I think the risk we all have is that there's a great overreaction and the casualty is the whole digital economy,” Rometty said on CNBC's “Squawk Box” at the World Economic Forum in Davos, Switzerland.
She also advocated for specific regulations that would be akin to precision medicine. “Really what we have to protect is consumer privacy, and that's consent, opt out, ability to delete, and that is what I would call almost like precision medicine — precision regulation. So I'm pretty vocal about that,” Rometty told CNBC. She added that privacy is paramount for IBM. “We're 108 years old, and we have always lived by that view, that we exist because clients trust us with data,” Rometty said. “So I think every company now has to do that, when everyone's looking to benefit from it. If you're going to benefit from it, you have to live by those rules.”
BYTES: Two top U.S. industry groups are warning that China is forging ahead with its Made in China 2025 plan that aims to establish the country as a leader in tech domains including electric vehicles and robotics, the Wall Street Journal's Bob Davis and Lingling Wei reported. China has sought to downplay the importance of the plan. But the U.S. Chamber of Commerce and the American Chamber of Commerce in China said in a joint report to the U.S. Trade Representative that there is evidence of “a deep, concerted and continuing effort” among Chinese provincial officials to enact it, according to the Journal.
“In Guangdong province near Hong Kong, the report says local officials have solicited companies to become ‘backbone’ robotics enterprises, create ‘secure and reliable’ next-generation information-technology systems, and establish the region as a Made in China 2025 ‘demonstration zone,’ ” the Journal reported. “The rust-belt province of Liaoning, meanwhile, has preferential tax policies for advanced manufacturing and for scientific investment, according to the report.”
— Waymo said it plans to bring a factory to Michigan that will be the first in the world to be “100 percent” focused on mass production of autonomous vehicles, according to the Associated Press's David Eggert and Tom Krisher. The Google self-driving car spinoff also said the project will create up to 400 jobs. “The company plans to spend about $13.6 million to retrofit a to-be-determined manufacturing facility in the Detroit area,” the AP reported. “In exchange, it will get a state incentive grant worth up to $8 million that was approved Tuesday by the Michigan Strategic Fund Board.”
— George Mason University students will be able to order food that will be delivered by autonomous robots with wheels, The Washington Post's Peter Holley reported. The cost of a delivery will be $1.99. “The school has received a fleet of 25 delivery robots that can haul up to 20 pounds each as they roll across campus at four miles per hour, according to Starship Technologies, the Estonia-based robotics company that created the delivery vehicles,” my colleague wrote. “The company — which claims its robots can make deliveries in 15 minutes or less — says the Fairfax, Va.-based school is the first campus in the country to incorporate robots into its student dining plan and has the largest fleet of delivery robots on any university campus.”
— More technology news from the private sector:
— The Labor Department accused tech giant Oracle of discriminating against women and people of color and claimed the company is excluding black and Hispanic people in its hiring practices, according to the Guardian's Sam Levin. “A federal complaint filed Tuesday said that out of roughly 500 people hired into technical jobs over a four-year period, only five were Hispanic and only six were African American,” the Guardian reported. “The DoL has also alleged that more than 5,000 women have been underpaid, with disparities as high as 20%, and that more than 11,000 Asian employees have been underpaid, with gaps as high as 8%.”
— The Supreme Court declined to hear a case about defamatory Yelp reviews that could have had implications for online platforms' legal protections, the Verge's Adi Robertson reported. “Today’s list of Supreme Court orders denies a complaint brought by Dawn Hassell, an attorney who requested that Yelp take down false, negative reviews about her practice,” Robertson wrote. “This means that a California Supreme Court decision will stand, and Yelp isn’t liable for the reviews.”
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— Roxi Wen, the former chief financial officer of Elo, is joining Mozilla as chief financial officer, TechCrunch's Frederic Lardinois reported.
— News about tech incidents and blunders:
— In a sign that investors in Silicon Valley are increasingly showing restraint, the number of seed deals — which are initial investments in start-ups — has plunged, the Wall Street Journal's Rob Copeland reported. Research company PitchBook found that the number of seed deals fell to 882 in the fourth quarter from more than 1,500 three years earlier. “The unbridled optimism that inhabits our world,” startup investor Sunny Dhillon told the Journal, “is getting a shot of realism.”
— More funding news:
- The Brookings Institution holds a discussion titled “Enabling opportunities: 5G, the internet of things, and communities of color.”
- The Heritage Foundation hosts a panel discussion titled “Blockchain: What it is and how it can help prevent identity theft.”
- AdExchanger's Industry Preview conference through tomorrow in New York.
- The New America think tank hosts a conversation titled “Rebuilding a smarter city: Lessons from Houston” tomorrow.
- RE•WORK Deep Learning Summit in San Francisco tomorrow through Friday.
- The George Washington University’s Elliott School of International Affairs hosts an event titled “Artificial intelligence: What can we learn from other countries’ approaches?” on Friday.
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