05:27 GMT29 January 2020
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    Amazon has weaponised a vast arsenal of lobbying tools to increase its influence on Capitol Hill. US scholars Dr Craig Holman and Paul Argenti explain what's behind the Big Tech giant's lobbying fever, and why it hasn't brought the desired results so far.

    Amazon is continuing to ramp up lobbying in Washington DC: in 2018 the company broke its record by spending $14.4 million to influence US policymakers while over the first three quarters of this year the tech giant has already laid out about $12.4 million. 

    According to Bloomberg, Amazon tried to outdo itself last year largely because it competed for a $10 billion cloud-computing contract with the US Department of Defence. However, the company's luck failed it in 2019: in October the Pentagon awarded the 10-year deal to Microsoft although the latter spent $5.2 million less on lobbying than its major rival in 2018.

    Amazon, Other Big Tech Giants Have Stepped Up Lobbying Activities

    Not only Amazon but all the Big Tech giants "have dramatically ramped up their presence on Capitol Hill" says Dr Craig Holman, a lobbyist for Government Affairs in the Public Citizen, a consumer advocacy group.

    "Only Microsoft has played the influence-peddling game rather consistently since the late 1990s", he explains. "Amazon, Apple, Facebook and Google have only recently joined the fray. These four giants of Big Tech were pretty much missing in action on Capitol Hill earlier, but have now vastly expanded its spending on all forms of the tools to seek influence in Congress and the White House – Amazon most of all".

    According to Holman, altogether, from 2005 through 2018 "these five Big Tech companies have spent more than half a billion dollars on lobbying the federal government, with the most dramatic increases in lobbying expenditures happening each year since 2014".

    He specifies that they are not just spending big but, recently, "employing all the tools available in the influence-peddling industry":

    · extensively using the revolving door – recruiting expensive and well-connected former government officials to make up their lobbying teams";

    · stepping up their campaign contributions to members of Congress amid the 2019-2020 election cycle;

    · investing more heavily in think tanks and advertising "to generate a more positive image of themselves";

    · have founded an industry lobbying group, the Internet Association, "which awarded the Internet Freedom Award to Ivanka Trump to endear themselves to the president".

    Holman notes that, for its part, Amazon "has hired 81 former government officials to join its team of 103 lobbyists, comprising 79% of its entire team".

    "Amazon has recruited revolvers very selectively, including at least three former members of Congress, staff from the Federal Trade Commission that oversees Amazon, as well as former officials in Trump's transition team, such as Daniel McFaul", he elaborates.

    What's Behind Big Tech's Lobbying Fever?

    According to Holman, Big Tech's hectic lobbying activity was triggered by increased regulatory scrutiny from the federal and state authorities.

    "The reason behind this stepped up influence-peddling activities of Big Tech – which is why it looks like they are losing at buying influence – is defensive", he explains. "Big Tech used to be happy monopolising the industry earlier when the government stayed out of the picture. But as Big Tech grew in wealth and importance, the federal government started to seek to regulate the industry".

    In June 2019, House lawmakers kicked off an antitrust investigation into Big Tech seeking to find out whether they are abusing their market dominance and violating antitrust legislation. While the Federal Trade Commission (FTC) went after Amazon and Facebook, the Justice Department got authority over Apple and Google. 

    Democratic presidential candidate Elizabeth Warren went even further than her party fellows signalling that she would try to undo Big Tech's old mergers and introduce new antitrust standards for IT companies if elected.

    ​She walked the talk in December 2019 by drafting a bill that would authorise regulators to retroactively review about 20 years of "mega mergers" and restrict such deals going forward, according to Bloomberg.

    "Government contracts to Big Tech are now beginning to contain various restrictions on the industry, such as labor safeguards", Holman notes. "And the federal government is looking very closely at how to rein in foreign influence in US elections that has come through social media".

    According to him, "the greater influence-peddling spending is an effort to reduce government regulation over the industry".

    The Pentagon building in Washington, DC
    © AFP 2019 / STAFF
    The Pentagon building in Washington, DC

    Amazon Points Finger at Trump for the Loss of $10-Billion JEDI Deal

    The expert highlights that the lobbying efforts do not always guarantee the return on investments: despite Amazon's skyrocketing lobbying expenditures, revolving door recruitment and campaign contributions, the vast $10 billion Pentagon JEDI cloud-computing contract was given to Microsoft.

    Amazon claims that the Pentagon's decision-making was the result of "improper pressure" from President Donald Trump due to a personal dislike for the company's CEO Jeff Bezos.

    "The company would never have expected the president to interfere in such a business decision for merely personal reasons – no previous president would ever have done something so petty – but Trump has indeed used his public office for petty personal gain", echoes the lobbyist.

    The tech giant is now suing the Pentagon for "being unduly influenced for personal reasons in awarding the contract rather than awarding the contract based on merit", Holman points out.

    However, according to Business Insider, Microsoft, that introduced its hybrid cloud Azure Stack in 2017, is largely regarded as the leader in the field, while Google and Amazon followed suit only in the past year. Forbes specified on 17 December that this very point is "critical for understanding the motivations" of the DoD.

    Trump Administration is Much More Business Friendly Than Dems

    Although "it's fair to say that Amazon didn't get the expected results from all the efforts that it has put in place", the Trump administration's business-friendly approach stands in marked contrast with the Democrats' plans to rein in dominant tech companies, notes Paul Argenti, professor of corporate communications at Dartmouth's Tuck School of Business.

    "Whatever you can say about this administration, they're very business-friendly and don't seem to have attacked tech companies any more than any other industries", he says.

    As for Amazon's dissatisfaction with Donald Trump, the tech giant should look out for Democratic presidential candidates' initiatives; the professor remarks: "Let's say Elizabeth Warren gets into office; it would have a profound effect on Amazon and every tech company for that matter".

    Meanwhile, Argenti warns against overestimating the company's efforts. "While [Amazon] spend[s] double that of what Microsoft spends, they still don't spend what Google has spent on this", he stresses, referring to the fact that only in 2018 Google spent $21.7 million on lobbying.

    "[Big Tech] surpassed banking in terms of the way they're approaching lobbying. So I think they're a big part of the lobbying effort that's going on in Washington, but not the biggest", he says.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.

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    Tags:
    lobbying, antitrust case, Elizabeth Warren, Donald Trump, Jeff Bezos, Microsoft, Pentagon, Big Tech, Amazon, United States
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