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Tech Firms Add Lobby Strength as EU Gets Tough

Tech Firms Add Lobby Strength as EU Gets Tough

By Reuters | Updated: 8 September 2016 17:36 IST

US tech giants Google and Facebook are among multinationals spending more in Brussels as the European Commission eyes new business regulation after last week handing Apple a 13-billion-euro tax demand.

A new annual filing by Google to the EU's Transparency Register showed it spent roughly 15-20 percent more on lobbying European Union officials and lawmakers last year than in 2014, itself some three times as much as in the year before that.

A review by Reuters of EU lobbying budgets of a handful of leading US firms which have been in the spotlight of European regulatory debates showed Google among the biggest spenders of all corporations, reporting a budget of EUR 4.25-4.50 million ($4.8-5.1 million) in 2015. That compared to EUR 3.5-4.0 million the year before and EUR 1.25-1.5 million in 2013.

A spokesman for the company, which has been served with three sets of charges in the past two years by EU antitrust chief Margrethe Vestager, said its 14 staff involved in lobbying in Brussels were there to provide information.

"European politicians have many questions for Google and about the Internet. We're working hard to answer those questions, helping policymakers understand our business and the opportunity for European businesses to grow online," he said.

Google's annual Transparency Register filing, publicised on Wednesday by anti-corruption group Transparency International, appeared online coincidentally on August 30. On that day European Competition Commissioner Vestager ordered Apple to pay a record $14.5 billion in back taxes to Ireland after ruling that the US firm had effectively had illegal subsidies from Dublin.

The iPhone maker did not respond to a request for comment on its lobbying in Brussels, where it has been advertising since July for a new government affairs manager to "represent Apple's position with policymakers".

Its EU declaration of spending a modest EUR 800,000-900,000 last year and employing just five staff working part-time on lobbying has prompted speculation that it may have underplayed its hand - though EU officials insist that they are not influenced by high-pressure corporate lobbying.

Waking up
Daniel Freund from the Brussels office of Transparency International said businesses could benefit from devoting resources to relationships with EU officials in a city where an expansion of regulatory powers for the Commission and European Parliament in the past few years has seen Brussels start to rival Washington in numbers of professional lobbyists.

"A strong lobbying presence would smooth relations with the EU institutions, establish personal relationships, prevent spats," Freund said.

"The (2009) Lisbon Treaty means more competences have shifted to Brussels and companies are waking up to this fact."

Facebook, whose WhatsApp messaging service could be affected by an upcoming reform of the EU's telecoms rules and which also has an interest in new data protection rules, spends much less than Google - 700,000-800,000 euros last year - but is expanding its small team of people lobbying for it in Brussels.

A staff that numbered just two last year is now four and a fifth person is being recruited, a spokeswoman said. "Our team has increased in size as our company has grown and as such we are currently recruiting one extra person," she said.

Its advert for a Public Policy Manager reads: "As Facebook has become part of the daily lives of hundreds of millions of people around the world, policy makers in many countries naturally wish to talk to us, and we wish to talk to them."

Google's spending surge has come since Vestager's arrival in 2014 brought what many competition experts see as a more confrontational approach from the Commission. It is now similar to that of Microsoft, according to the latter's public filing.

Microsoft, which lost heavily in the European court after years of legal battles with the Commission over its market dominance that began in the 1990s, declined comment.

Amazon, which faces a similar tax investigation to Apple related to its relations with the Luxembourg government, declined comment. It employs six people on EU lobbying with a budget of 1.5-1.75 million euros, according to its filing.

Uber, the ride hailing app company which has lobbied the Commission to do more to open up national taxi and transport markets to its smartphone-based services, has built a presence in Brussels over the past two years and now employs three people with a budget of 400,000-500,000 euros.

Of global tech firms not based in the United States, Apple's smartphone competitor Samsung spent 2.5-2.75 million euros last year with a staff of nine, its Transparency Register filing shows. The South Korean company declined to comment.

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