Tech spent millions lobbying amid antitrust assault, CEO hearing

Amazon spent more than US$4.4mil (RM18.24mil), a company record, while Google spent more than US$1.9mil (RM7.87mil) on federal lobbying in the three months ending Sept 30, according to disclosures filed with Congress. — AFP

Technology giants such as Inc and Alphabet Inc’s Google spent millions on lobbying in the third quarter of 2020 as they braced for an eruption of antitrust scrutiny in Washington that saw top executives summoned to testify before Congress.

Amazon spent more than US$4.4mil (RM18.24mil), a company record, while Google spent more than US$1.9mil (RM7.87mil) on federal lobbying in the three months ending Sept 30, according to disclosures filed with Congress.

Amazon’s spending jumped nearly 10% from the same period a year earlier as it faced stepped-up scrutiny in Washington. The company also hired two outside lobbying firms, one to work on education and another to work on stimulus responses to the coronavirus pandemic for its cloud computing division.

Amazon chief executive officer Jeff Bezos clashed with David Cicilline, the Rhode Island Democrat who heads the House antitrust panel that’s investigating competition issues in the technology sector, during a July hearing that also featured testimony from the CEOs of Google, Facebook Inc and Apple Inc.

The committee’s final report recommended that tech giants shouldn’t be able to compete against companies that operate on their platforms.

Google, which was sued by the US on Oct 20 over allegations that it violated antitrust laws to extend its dominance of search and search advertising, spent more than 14% more than it did in the second quarter of this year. Its third-quarter outlay was down more than 30% from what it spent in the third quarter of 2019 after the company slashed lobbying expenditures in a reorganisation of its Washington policy operations.

Apple spent nearly US$1.6mil (RM6.63mil), up slightly from the second quarter, while Facebook spent US$4.9mil (RM20.31mil), up almost 3% from a year earlier and more than 1% from the second quarter, according to the forms, which were due midnight Tuesday.

The subcommittee’s report, which was issued earlier in October and documented what the staff portrayed as extensive anticompetitive behavior by the firms, recommended an overhaul of the antitrust laws. Cicilline is preparing legislation that could ultimately break up the companies, if adopted.

Google, in addition to the pressure in Congress and Tuesday’s lawsuit by the Justice Department and 11 states, also faces potential cases from groups of states and private litigants.

Facebook could face a federal lawsuit by year’s end, while Amazon and Apple are also subjects of antitrust investigations. The lobbying disclosures capture a fraction of the companies’ outlays to respond to stepped-up antitrust scrutiny, since spending to confront law enforcement probes involves hiring lawyers and may not appear in the federal disclosures.

Lawmakers and the White House have also increased pressure on the companies in what has become an increasingly partisan battle. Zuckerberg, Pichai and Twitter Inc. CEO Jack Dorsey are due to testify before the Senate Commerce Committee on Oct 28 on a bipartisan basis, while Zuckerberg and Dorsey could be subpoenaed by the Senate Judiciary panel over Republican allegations that the companies are trying to bolster Democrats in the approaching elections.

Twitter, which hasn’t been a big player in Washington up until now, spent US$430,000 (RM1.78mil), up more than a third from the year before.

During the period, a flurry of bills, mostly from Republicans, also proposed amending Section 230 of the Communications Decency Act, which the companies treasure because it allows them to avoid lawsuits over third-party content.

In May, US President Donald Trump also pushed the Federal Communications Commission to limit the shield after Twitter fact-checked him. The Justice Department finalised proposals to overhaul the law in September.

In the third quarter, China’s ByteDance Ltd also contended with a series of White House actions to prompt the sale of TikTok, the short-video app that has exploded in popularity among younger users. It spent US$730,000 (RM3.02mil), a new company record after it set one in the second quarter.

The planned deal, which would see Oracle Corp with a stake in TikTok, still requires final sign-off from both the US and China, and appears likely to slip past the Nov 3 elections, Bloomberg has reported. Oracle spent nearly US$1.9mil (RM7.87mil) on lobbying in the quarter, up more than 5% compared with the second quarter and nearly 8% more than the year before.

Companies involved in the race to win approval for vaccines and treatments against the coronavirus also increased their spending.

Pfizer Inc, which is a top contender to produce an effective vaccine against the Covid-19 pandemic that has killed a million people worldwide, reported more than US$1.9mil (RM7.87mil) in lobbying outlays during the period. Gilead Sciences Inc, the producer of remdesivir, which was part of the mix of drugs that Trump received following his own diagnosis with Covid-19, reported more than US$1.8mil (RM7.46mil) in spending, up more than 20% from the year earlier. – Bloomberg

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