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The Über-Lobbyists: how Silicon Valley is changing Brussels lobbying

Author
Raphaël Kergueno
Date
4 May, 2017
Type
Article
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For decades, Silicon Valley companies have turned traditional business models on their heads. From streaming movies to turning private cars into taxis, these companies are known for both innovation and shaking-up the markets they operate in. A similar phenomenon is happening in Brussels where Silicon Valley companies are rapidly changing the lobbying scene. As a result, they are fast becoming the largest, most influential and most transformative players in town.

The poster-child of this spectacular rise is Google, which is now tied with Microsoft as the biggest of the Silicon Valley spenders. Google’s lobby spending has increased by 240% since 2014. With 4,250,000 euros per year each, both are in the top 10 most influential organisations as measured by the number of high-level lobby meetings with the European Commission. Google, however, has nearly double the amount of meetings of Microsoft. Disclosures indicate that the internet search giant has met with Commissioners and their closest advisors 142 times over the last 2.5 years as opposed to 72 for Microsoft. Indeed, Google has met with representatives from the Commission from nearly every portfolio, including agriculture and humanitarian aid.

One of the secrets of Google’s lobbying strategy seems to be the hiring staff from the EU institutions. Our research has shown that four out of seven lobbyists currently accredited with the European Parliament have been hired directly from the Parliament to lobby their former colleagues. A total of 23 individuals from the EU institutions have been hired since 2009, of which 11 were specifically lobbying the EU. With the more than one meeting per week, the strategy is paying off, potentially setting the example for other Silicon Valley companies.

Uber, which made headlines in May 2016 by hiring former Commissioner Neelie Kroes, has increased its lobby spending seven fold since 2015, although from a low base. All accredited lobbyists working for the car-booking service have previous experience from inside the EU institutions. Two of them were actually hired from Google’s Brussels operation. With 50 high-levels meetings, the company already ranks 4th among our list of 25 major Silicon Valley companies.

This follows a general trend among US tech companies of growing their lobbying capacity in Brussels. For our research, we took 24 companies on the EU transparency register which were founded in the last 40 years and based in Silicon Valley. Taken together, they have increased their lobby spending by 278% since 2014 and now spend 15.3 million euros per year. Notable cases include Facebook (+150%), eBay (+100%) and Netflix (+60%). While the numbers are dwarfed by the lobbying scene in Washington, where Google alone spends 15.4 million dollars, US tech companies are gradually becoming aware that the success of their business model in Europe depends on influencing the regulatory framework in Brussels.

And their strategy seems to be working. Half of the top 10 most influential companies lobbying the Commission are from the US and with the exception of General Electric all of them are primarily software companies. Their dominance of the lobbying scene is particularly strong in the area of the digital single market and the digital economy. 82% of meetings on these issues are with companies and industry associations. Less than 8% are with NGOs. On the sharing-economy, 25% of all meetings of the Commission are with just two companies: Airbnb and Uber. And this when current legislation on these issues will determine the rules for the internet in Europe for at least the next decade.

In 2014, the Commission President Juncker had instructed his new college to “ensure an appropriate balance and representativeness in the stakeholders they meet”. However, it is up to each Commissioner to ensure this commitment is met. The previous Commissioner for the digital economy, Günther Oettinger, stands out among his peers with an 83% share of corporate lobby meetings. In the absence of effective rules ensuring balanced stakeholder consultation and preventing conflicts of interest when staff and politicians move from the EU Institutions to other organisations, it rests upon individuals to prevent tech organisations from simply “buying” their way into the EU decision-making process. It is therefore important that Commissioners and their staff, particularly those in charge of digital issues, respect President Juncker’s call for more balance in stakeholder meetings. This can only benefit the EU decision-making process and ultimately all citizens.

Annual reported EU lobbying expenditures by Silicon valley companies (in EUR)*

Organisation Name 2014 2015 2016 2017 % change since registered
Google 1,250,000 1,250,000 3,500,000 4,250,000 240%
Facebook 400,000 400,000 400,000 1,000,000 150%
Cisco   150,000 1,000,000 1,000,000 567%
QUALCOMM 450,000 450,000 400,000 900,000 100%
Apple 400,000 200,000 700,000 800,000 100%
Oracle 450,000 700,000 800,000 800,000 78%
Symantec 250,000 700,000 800,000 800,000 220%
Netflix     500,000 800,000 60%
Salesforce     200,000 700,000 250%
Uber   50,000 50,000 400,000 700%
eBay 200,000 50,000 400,000 400,000 100%
Dropbox     9,999 300,000 2900%
PayPal     300,000 300,000  
Yahoo!   200,000 9,999 300,000 50%
Tesla       150,000  
LinkedIn       120,000  
TripAdvisor 50,000   10,000 100,000 100%
Mozilla     100,000 100,000  
Airbnb       100,000  
23andMe.     50,000 50,000  
Yelp 50,000 50,000 50,000 50,000  
Adobe 50,000 200,000 25,000 50,000  
Twitter   50,000 25,000 25,000 -50%
VMware       100,000  
Total 3,600,000 4,450,000 9,629,998 13,597,017 278%

* Spending data retrieved from lobbyfacts.eu. Please note that the data reflects spending as reported at the time of retrieval but can reflect prior financial years. In the absence of notable update by registrants, we deem this reported spending to remain applicable for subsequent years.  

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Daniel Freund

Head of Advocacy EU Integrity
dfreund@transparency.org