(Bloomberg) -- Facebook Inc. and Amazon.com Inc. set federal lobbying records in the third quarter as Washington ramps up oversight of the tech giants’ business practices.
Facebook spent $4.8 million, an increase of almost 70% from the same period the year before. The world’s largest social media company is grappling with a mushrooming list of challenges, including federal and state antitrust investigations, criticism of its handling of users’ personal information, and dissatisfaction with its treatment of political content.
Amazon spent $4 million on lobbying, the most the e-commerce giant has ever spent in a single quarter. Amazon, which runs a diverse set of businesses, is fending off criticism from lawmakers and regulators over its acquisitions and its bid for a highly lucrative Pentagon cloud contract.
Spending by Alphabet Inc.’s Google dropped almost 50%, to $2.8 million from $5.5 million in the same period last year. Google is reshuffling its Washington lobbying operations under Karan Bhatia, the global policy chief who joined the company last year. In September, Google hired former Republican Senate aide Mark Isakowitz to head up its operations in the capital, replacing Susan Molinari. During the second quarter, Google ended its relationship with more than a dozen lobbyists at six outside firms.
The big internet platforms are facing a high level of scrutiny of their business practices after years of virtual inaction in Washington. Both the Justice Department and the Federal Trade Commission, which share a mandate to enforce antitrust laws, have announced broad reviews of the technology sector -- indicating that Facebook and possibly Amazon will undergo parallel investigations by both agencies.
The House Judiciary Committee is investigating antitrust issues in the tech sector, including scrutiny of how Amazon treats third-party sellers on its platform. The FTC is also questioning third-party merchants who sell their goods through Amazon, Bloomberg has reported. Facebook and Google face bipartisan antitrust probes by dozens of state attorneys general, as well.
Although Google has decreased its lobbying footprint, it’s turning to other ways to get out a new message in Washington: The search engine is promoting users’ safety and security.
In October, even as Google faced an array of public-policy challenges, the company rolled out a security-awareness campaign that included ads at Ronald Reagan National Airport and seven metro stations -- including “station domination” of two stops with posters throughout the stations, even on the bases of turnstiles, according to Washington’s transit agency.
The initiative included three-day, pop-up displays touting Google’s privacy check-up features and educating passersby about online security tools in Union Station and at the Federal Triangle metro station, just blocks from the Capitol and the White House, respectively. The campaign, which was billed as part of National Cybersecurity Awareness Month, featured ads declaring that “Gmail blocks over 100 million phishing attempts, every day,” and touting a feature that allows users to automatically delete their data periodically.
The campaign was designed to target Washington’s population of lawmakers, congressional staff, members of the media and think-tank workers, a target-rich environment for hackers, according to a person familiar with the campaign.
Tim LaPira, an associate professor of political science at James Madison University who studies lobbying, said the campaign’s message pushes back against the notion that the company has lost control of users’ privacy and should be regulated in ways it would oppose.
“Rather than only lobbying ‘inside’ the marbled halls of Capitol Hill, Google is trying to convince regular folks that their self-initiated security and privacy features are sufficient,” LaPira said in an email.
Expenditures for ad campaigns don’t normally appear on lobbying disclosures, and the company didn’t disclose the cost.
After years of growing popularity, the internet companies’ fortunes are falling in Washington due in part to revelations about how Facebook was exploited by Russia, which meddled in the 2016 election, and to concerns that Facebook’s privacy practices are too lax.
In July, Facebook agreed to pay $5 billion to the FTC -- the largest privacy fine in the agency’s history -- to resolve the Cambridge Analytica data scandal in which a consulting firm hired by Donald Trump’s campaign obtained data without users’ knowledge from a researcher who created a personality quiz app on the social network. Google was also fined by the FTC to settle claims it violated children’s privacy on its YouTube platform.
Facebook lobbied on competition, online advertising, a campaign finance transparency bill focusing on digital ads, and federal privacy legislation, among other issues, according to the disclosures, which cover the period ending Sept. 30. It lobbied Congress, the White House, the FTC and the Justice Department.
Google lobbied on global trade, digital advertising, cybersecurity and other issues, according to its filings.
Apple Inc. reported spending $1.8 million during the third quarter, up 34% from the same period last year. The company said it lobbied on a range of issues including tariffs, privacy, government access to data and patent litigation.
Trade groups representing Facebook and Google have also pushed the U.S.’s proposed trade deal with Mexico and Canada to replace Nafta, which contains several digital provisions the groups favor -- including the extension of liability protections for third-party content that internet platforms host. Both companies lobbied on the pact.
That shield is increasingly under threat in the U.S. The leadership of the powerful House Energy and Commerce Committee suggested in an August letter that the liability exemption, which helps the companies avoid a wide range of lawsuits, shouldn’t stay in the trade deal while lawmakers are weighing whether to keep it intact.
Software giant Oracle Corp. spent $1.7 million in the third quarter, an increase of more than 20% from the same period last year. Microsoft Corp. slightly increased its spending to $2.3 million in the period.
Both companies have been battling Amazon over a $10 billion Pentagon cloud-computing contract with moves that grabbed the attention of the White House. In July, Trump said he was considering intervening after hearing complaints that the bid terms are biased and tainted by conflicts of interest. Defense Secretary Mark Esper, who on Tuesday recused himself from deciding anything involving the deal because his son works with one of the original applicants, had ordered a review of the contract, known as the Joint Enterprise Defense Infrastructure, or JEDI. Esper had said there is no “hard timeline” to complete the review.
Oracle has waged a legal and lobbying campaign against the cloud-computing program for about two years. Amazon appears to be fighting back. In June, its cloud unit, Amazon Web Services, hired Trump-connected Jeff Miller to lobby for the company.
The third-quarter reports also showed significant activity on trade and tariff issues as Trump continued his trade war with China. Lobbying efforts to pass the U.S.-Mexico-Canada Agreement, or USMCA, also intensified.
The National Retail Federation, which is helping lead a coalition of trade groups opposed to Trump’s tariffs, showed almost $2.3 million in lobbying spending in the third quarter, up from almost $2 million in the second quarter. A spokeswoman said much of the increase was related to trade and tariffs.
The Consumer Technology Association, whose members include Apple Inc., Amazon and Facebook, reported spending more than $1.6 million during the third quarter, up from $1.1 million in the same period last year.
“As long as the president continues to use tariffs as a weapon, CTA will continue to lobby Congress to exercise its clear authority on trade and tax matters,” Michael Petricone, the group’s senior vice president for government and regulatory affairs, said in a statement to Bloomberg.
(Updates with Google advertising from seventh paragraph.)
--With assistance from Mark Niquette.
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