Record spending by technology companies lobbying the EU represents a democratic problem.
The enormous expansion of the digital industry is reflected by its spending to influence European Union policy-making. It now spends nearly €100 million a year on lobbying, a sum which dwarfs all other such spending by the private sector. It seeks to translate its huge economical power into more political clout, while European politicians have vowed to regulate the dominance of big digital platforms.
For the first time research by Corporate Europe Observatory (CEO) and LobbyControl not only shows that Big Tech has spent unprecedented sums to lobby EU institutions but also maps the ‘lobby network’ of the industry and how it functions. The study provides a detailed analysis of the lobbying power of technology companies at EU level.
Handful of firms
The research displays the biggest players, their networks and countries of origin, and uncovers their lobby budgets and access to EU decisions. It also unveils how this lobbying power plays out in practice, in the context of EU policy debates on the digital-services legislative package.
No fewer than 612 companies, groups and business associations are lobbying actively to influence the EU’s digital-economy policies and spend at least €97 million annually doing so. But tech lobbying is dominated by a handful of firms. Just ten are responsible for almost a third (€32 million) of the associated expenditure: Vodafone, Qualcomm, Intel, IBM, Amazon, Huawei, Apple, Microsoft, Facebook and Google. A cross-industry comparison shows these top ten companies have more lobbying power than their counterparts in pharmaceuticals, chemicals, cars or finance.
At least one fifth of the companies lobbying the EU on digital policy are US-based; less than 1 per cent have head offices in China or Hong Kong. Chinese firms have so far not invested in EU lobbying as heavily as their US counterparts. The top ten firms are also collectively organised into business and trade associations, which are themselves important lobby actors. These associations have a lobbying budget which far surpasses that of the 75 per cent of smaller companies in the digital industry.
Toothless measures
In the past Big Tech generally opposed regulation. Now, as new rules become inevitable, it is trying to reset the narrative, ostensibly supporting them—but only toothless measures, carefully shaped by the industry. It then combines this approach with attempts to reframe regulation as a threat, not to its own profits but to small and medium enterprises and consumers.
This is then matched by stoking geopolitical fears—warning that regulation will cause Europe to fall behind the United States and, above all, China. Underlying this narrative is still the belief that regulation stifles innovation.
Big Tech’s lobbying also relies on funding a wide network of third parties, including think-tanks, SME and start-up associations and legal and economic consultancies, to push through its messages. These funding links are often not disclosed, obfuscating potential biases and conflicts of interest.
Worrying and unhealthy
Our findings show that lobbying, especially by the US giants, has one goal—to push back against any strict rules which could affect Big Tech’s business model and profit margins. From a democratic perspective, these immense lobby budgets are deeply worrying and unhealthy.
Efforts to regulate the digital economy have the potential to deliver a better internet—one that serves people, small businesses and communities. It is crucial that independent voices and citizens get involved in these policy discussions, to ensure corporate lobbyists don’t shape the future of technology.
Political processes are under way in the EU with a view to tightening rules for digital platforms. With the Digital Markets Act (DMA) and the Digital Services Act (DSA), the European Commission wants to limit the power of Google, Amazon and other big players. The digital industry is up in arms about this, especially the DMA.The companies’ concentrated lobbying power threatens to water these proposals down.
Armada of advocates
Though we do see a commitment by EU policy-makers to making these regulations meaningful, they are hearing almost only the arguments of Big Tech with its armada of advocates. Civil society and independent academics with enough knowledge to follow the issue are completely outnumbered and simply do not have the resources of Silicon Valley.
Big Tech’s huge lobbying budgets have a significant impact and secure privileged access: of 271 external meetings involving high-level commission officials since November 2019 around the digital-services package, 75 per cent were with industry lobbyists—just 19 per cent with non-governmental organisations. Google and Facebook led the pack.
In past years, lobbying by Big Tech has affected several EU policy discussions, including those on the General Data Protection Regulation, the ePrivacy Directive, the Copyright Directive and the proposal for an Artificial Intelligence Act. Amazon even bragged that it had managed to weaken the position of the European Parliament on the ePrivacy Directive.
Sowing doubt
Tommaso Valletti, former chief economist in the competition directorate of the commission and professor of economics at Imperial College, London, pointed out at the launch of our study that Big Tech uses the same tactics of sowing doubt invented by the tobacco industry and copied by many others—such as Big Oil, seeking to avoid stringent climate policies. Valletti also spoke about the lack of transparency on the part of those academics, consultants and lawyers who talk at webinars, workshops and cocktail parties about the digital economy but ‘forget’ to disclose they are being paid by Big Tech.
A recent investigation by New Statesman found that, in just six years, Google, Facebook, Amazon and Microsoft had spent tens of milions of euro financing leading EU academic institutes. The firms were financing research with potential impact on their business models, from privacy and data protection to competition. Disclosure though was inconsistent.
EU institutions must respond by strengthening lobby and ethics regulation. Its member states must stop acting opaquely and finally ensure they provide democratic accountability about processes and decisions. But policy-makers also need to be proactive and ensure they reach out to civil society, academia, affected communities and small businesses. This is crucial to counterbalance the dominance of Big Tech lobbyists and to save the democratic process.
Business model
The academic and Big Tech critic Shoshana Zuboff has argued in her book The Age of Surveillance Capitalism that lobbying—alongside establishing relationships with elected politicians, a steady revolving door and a campaign for cultural and academic influence—has allowed a business model built on violating privacy and unfairly dominating the market to flourish without being challenged.
Our report confirms her findings. That should worry every European—and move us all to be engaged in the policy battle coming to a climax in the months ahead.
Margarida Silva is a researcher at the Centre for Research on Multinational Corporations (SOMO). There she investigates the economic and political power of Big Tech and its impacts.
Max Bank is a researcher and campaigner at LobbyControl, a non-profit association which advocates for transparency and democratic control.