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Why Is Google Spending Record Sums on Lobbying?

Stan Ward

Stan Ward

August 8, 2017

Google once again finds itself in the midst of multiple controversies at home and abroad from different regulatory authorities and courts. Google can’t do too much to affect the outcomes of its trials and tribulations abroad. However, it’s upping its game in the US by putting mega dollars into lobbying efforts to head off legislation that might rein in its prolific growth.

Google will soon assume the mantle of top corporate lobbying spender, perhaps snatching that distinction from former number one, Comcast. In the last three months alone, Google has earmarked a record amount of nearly $6 million for Washington lobbyists. This is probably a predictable reaction from the Silicon Valley giant, given the rumors swirling in Washington.

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Google was a darling of the Obama administration. Its leader Eric Schmidt had Obama’s ear. He backed that up with monetary support. Now that President Trump is the new sheriff in town, Google is running for cover on a multitude of fronts. Ironically, one attack may be launched from the reeling Democrats as they struggle to remain relevant.

From Trump’s advisor, Steve Bannon, come warnings of regulating companies like Google and Facebook like utilities, given their pervasive digital presence. Google is also under pressure from the left, as an outgrowth of the Democrats rolling out their “Better Deal” in an attempt to regain relevance nationally. If the Democrats ever regain traction – to say nothing of power or prominence – Google could find itself under renewed anti-trust scrutiny.

As such, it’s understandable that Google is pulling out all the stops as it spends record amounts for lobbying. Its spending has eclipsed that of Comcast. Comcast had been number one, as it waged war against net neutrality and its impact on broadband providers.

Given its inroads in the tech industry, Google is a monopoly of sorts. However, it usually chooses to downplay its pre-eminence lest it garner any more regulatory scrutiny than it already has. PayPal billionaire and Trump supporter and advisor Peter Thiel points out that companies like Google concur with that assessment. 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.”

Google has learned its lobbying lesson well. It witnessed Microsoft’s anti-trust troubles of the early 1990s. Microsoft, with no lobbying presence in Washington, DC, found itself at a big disadvantage. It then had to play catch-up to stave off penalties. That sent a wakeup call to nascent tech companies that they would have to emulate “Big Oil,” “Big Tobacco” and the like if they wanted to grow their businesses. Google’s lobbying expenditure grew from a mere $50,000 in the late 90s to more than $18m just 15 years later. That it is the cost of doing business these days.

Google’s lobbying has paid dividends over the years in the US. Its influence might be viewed as one reason for its dynamic growth and relative lack of regulatory headaches until now. One only has to look at the problems it has abroad – notably with the EU – where it has no lobbying influence to draw a conclusion. Lobbying works – for present problems and as a useful tool for keeping an eye toward the future.

Going forward, 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 Governors’ 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.”

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While this may send a shudder through the company, it can take heart that, to date, it has escaped the political battles relatively unscathed. However, now that there is no cosy relationship between Eric Schmidt and Obama, you can bet Google will flood Washington with lobbying dollars in an attempt to stay out of the regulatory crosshairs, regardless of which party is in power.

Opinions are the writer’s own. 

Image Credit: achinthamb/Shutterstock.com

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