A new survey of lobbying networks in the European Union (EU) by Corporate Europe Observatory has found that the tech lobbying sector in the EU spends more than fossil fuels, pharma, and other industries. While Google and Facebook have invested over €5 million lobbying in the EU, Apple has spent €3.5 million to influence regulations on the digital economy.
As Big Tech’s market power grew, so did its political clout. Now, as the EU tries to rein in the most problematic aspects of Big Tech – from disinformation, targeted advertising to unfair competition practices – the digital giants are lobbying hard to shape new regulations.
Currently, Facebook is facing scrutiny for its social media monopoly and the ‘acquire-to-kill strategy’ to crush the competition. And Apple and Google are under investigation by the EU commission over control of their app stores, App Store, and Play Store, respectively. The regulators argue that the tech giants are stifling competition by subjecting developers to compile with their rules, especially Apple. All apps have to pass the App Store review to be published on the digital market and release new updates. In addition, developers have to pay 15% to 30% commission on all in-app purchases via the digital marketplace.
Apple and other U.S tech giants spend more than Chinese firms on lobbying in the EU
The report states that the lobbying networks in the EU are dominated by a few firms, primarily the U.S tech giants.
- Just ten companies are responsible for almost a third of the total tech lobby spend: Vodafone, Qualcomm, Intel, IBM, Amazon, Huawei, Apple, Microsoft, Facebook and Google spend more than €32 million making their voices heard in the EU.
- Out of all the companies lobbying the EU on digital policy, 20 per cent are US based, though this number is likely even higher. Less than 1 per cent have head offices in China or Hong Kong. This implies Chinese firms have so far not invested in EU lobbying quite as heavily as their US counterparts.
Google tops the chart with €5.8 million, followed by Facebook with €5.5 million in the second position and Apple with €3.5 million in the third position. Although these companies are rivals, for the sake of avoiding restricting laws, they have collectively created business and trade associations as their lobby actors. “The business associations lobbying on behalf of Big Tech alone have a lobbying budget that far surpasses that of the bottom 75 percent of the companies in the digital industry.”
And these lobbying efforts do bear fruit for Google, Facebook, Apple, and others. They have a significant impact on EU policy-makers and gain privileged access to Commission high-level officials to reshape new laws. Tommaso Valletti, the former Chief Economist of the Competition Directorate of the EU Commission and Professor of Economics at the Imperial College, said:
“The economic and political power of the digital giants is hefty, and they are not going to remain passive in the face of possible new rules that affect the way they conduct their business. That‘s why the EU Institutions urgently need to change the way they handle this lobbying and limit the power of big tech.“
South Korean parliament just passed the bill to stop Apple and Google from charging app stores commission for in-app purchases and allowing developers to offer their own payment methods on iOS and Android devices. As S.Korea is about to become the first country to pass a regulatory law to contain tech giants’ dominance of the apps economy, it is likely that others will follow suit. Therefore, in such conditions, the tech giants are investing heavy sums to avoid regulation.