Data Privacy, Security Drive Tech Lobbying Spending Increase

Major technology companies and trade groups continued to boost tech sector lobbying spending in Q, with Apple and Facebook setting company quarterly records for spending, according to academics, a privacy advocate and an industry representative. Issues driving spending ran from copyright, data privacy and security, intellectual property, net neutrality and e-commerce sales tax to “wind power,” as listed on Google’s lobbying report. Disclosure forms showed the companies and trade groups were targeting the Electronic Communications Privacy Act (ECPA) bills that would reshape the government’s data collection practices, the U.S.-EU Safe Harbor agreement on transfer of personal data and do-not-track (DNT) efforts on Capitol Hill and at the FTC.

Tech is blurring the lines among traditionally siloed industries. Those vying for consumers are bumping into one another, said Jeff Berry, a Tufts political science professor. “There is a lot of competition in this business space,” said Berry, who has researched and written books on the effect of lobbying on policy outcomes. “These sectors overlap and they’re fighting each other.” An industry representative and Adam Thierer — a senior research fellow focusing on tech policy for the Mercatus Center at George Mason University — agreed the Q1 spending increase over the year-ago quarter mirrors a general spending increase in tech lobbying in recent years. Thierer called it “explosive growth.”

Google led tech companies — not to mention telcos — by spending $3.82 million in Q1, according to an analysis of top tech and telecom spending by public interest advocate Consumer Watchdog. That’s a $470,000 increase over 2013’s Q1, but still down considerably from 2012 Q1 spending, which hit $5.03 million after a significant lobbying spending ramp-up throughout 2011.

Facebook and Apple both set company quarterly spending records in Q1, according to Consumer Watchdog. Facebook spent $2.78 million in Q1, a $330,000 increase from last year’s Q1. The company passed the million-dollar threshold in lobbying expense in late 2012, quickly moving into the upper echelon of tech spenders by early 2013, said Consumer Watchdog. Apple topped seven figures for the first time, spending $1.07 million, up 33 percent.

Two major tech trade groups spent more on lobbying. The Computer and Communications Industry Association more than tripled its spending last quarter, compared with Q1 2013, jumping from $70,000 to $230,000. A spokeswoman noted the Q1 spending was a “steady increase” from the last three quarters of 2013. The Software and Information Industry Association continued its steady Q1 lobbying increase, spending $280,000. SIIA has been increasing Q1 spending by $20,000 to $60,000 each year since 2009.

Spending Slammed

Consumer Watchdog Privacy Project Director John Simpson said these “companies continue to spend whatever they think necessary to buy the laws and regulations they want.” While disclosure forms list issue areas, he argued they don’t capture the full impact of these companies’ policy spending. “These disclosure statements don’t include payments to trade associations or the sort of ‘soft’ lobbying that has become a Google trademark — funds to think tanks and academic research centers,” he said. “When all that is factored in, the amounts are staggering.” Google had no reaction.

Several tech stalwarts, including Amazon, Microsoft and Yahoo, cut spending. Microsoft reduced spending 18 percent in Q1 2014 compared with Q1 2013. But Microsoft still spent $2.08 million, exceeding Yahoo’s $700,000 and Amazon’s $830,000.

Berry’s research shows “it’s not clear” the amount of spending “makes any difference in the outcome” of policy issues, he said. “There is not a linear relationship.” But there is a “threshold effect” for companies, he said. Just to get “in the game” and “at the table” in their sector, companies and trade groups must spend at least a certain amount, he said.

Data privacy and security was a common theme for companies and associations. SIIA cited the Obama administration’s big data review. The White House’s 90-day review, launched in late January, is expected to be completed by month’s end (WID April 1 p3). SIIA also cited the FTC’s data privacy and security work, which it has continued to stress through the first four months of 2014 (WID March 7 p4; March 10 p6).

ECPA, Safe Harbor

Other ongoing issues such as an ECPA update and the U.S.-EU Safe Harbor agreement — which allows data transfer between the two jurisdictions — popped up consistently in disclosures.

The Direct Marketing Association (DMA) and Interactive Advertising Bureau (IAB) maintained Q1 spending levels in 2014, compared with Q1 2013. DMA tallied $250,000 in lobbying money, the same amount it has spent each Q1 since 2009. IAB disclosed $45,000 in Q1 money, the same amount it spent in Q1 the past two years. Both groups highlighted DNT as a lobbying issue. Both have been involved in the ongoing World Wide Web Consortium (W3C)-facilitated discussions of a DNT mechanism, although DMA split off with the Digital Advertising Alliance to launch its own DNT talks last fall (WID Oct 9 p1, Oct 15 p8). The much-delayed W3C group is this week trying to move to last-call consensus on a Tracking Preference Expression document (WID April 16 p1). Both IAB and DMA’s forms said they were lobbying on the Do-Not-Track Online Act (S-418), “a bill to empower the FTC to create a do not track mechanism,” according to IAB’s form. Google also joined both groups in listing the pending Do Not Track Kids Act, which would stop Internet companies from collecting personal information about teens ages 13 to 15 without consent.

Online advertising was another issue Google, Microsoft, Yahoo, DMA and IAB mentioned. E-commerce more generally was a theme in disclosures from Apple, Amazon and NetChoice, an ecommerce trade association. All e-commerce groups cited the Marketplace Fairness Act (MFA), which would allow state governments to collect sales taxes from retailers with no physical presence in the state. Amazon previously opposed the bill, but now supports it (WID March 22/13 p3). Apple has not yet taken a position, while NetChoice actively opposes the bill, according to NetChoice Policy Council Carl Szabo.

NetChoice stepped up its lobbying spending in Q1 2014 over Q1 2013. Its $111,013 is nearly 10 times the $10,423 it spent in Q1 2013. “The Internet community is fully awake to the risk that new laws bring the unintended consequence of squelching innovation and competition,” Szabo told us. NetChoice decided to “ramp up our work against a new Internet sales tax law that would impose huge compliance burdens and audit risks on any business going online to reach new customers,” he said.

Although the MFA passed the Senate last year, it hasn’t budged in the House since its February 2013 introduction (http://bit.ly/1f7krpt). “Often we mistake the status quo winning for gridlock,” said Tuft’s Berry. “When things don’t move forward … some interests may be really happy with the outcome.” — Cory Bennett (cbennett@warren-news.com)