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Apple, in political crosshairs, is on pace to boost lobbying

Erica Ogg — Thu, 23 May 2013 16:44:20 +0000

Apple is well known for not putting a whole lot of effort into its D.C. lobbying game. But after a week that saw it unwittingly become the poster child for tax-dodging multinational corporations, it might need to step it up — if only to get some politicians off its back. But according to a report on Thursday, Apple is already on pace to spread more money around Washington this year than ever before.

Apple may spend almost $4 million on lobbying this year as in 2012, reports Reuters. That’s low of course, but for Apple it’s a pretty hefty increase:

The company spent about $2 million on lobbying last year, up from $180,000 in 1999, records show. This year it is on pace to nearly double last year’s figure.

As the report notes, what Apple is spending on policy efforts is tiny compared to its peers Google and Microsoft, which spent $16.5 million and $8.1 million, respectively, on lobbying efforts last year.

But having a larger presence in the nation’s capital and making friends with the policymakers that can wield great power over its reputation and fortunes may just be something Apple has to do. (One political reporter described Apple’s tax hearing as simply a “shakedown” by politicians angered by Apple’s proud D.C. outsider stance.)

CEO Tim Cook fared very well under questioning from senators on Tuesday, deflecting questions patiently about his company’s legal tax practices. He said he wanted people to hear Apple’s story directly from him, which is why he appeared before a Senate subcommittee this week. But it’s probably not something he wants to do on a regular basis. And making suggestions about corporate tax policy changes, as he did, may not be enough. What money Apple decides to spend on lobbying in the future will probably need to support his policy proposals if he wants to see any of them taken seriously — and keep Apple out of the spotlight.

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Apple’s low-key lobbying efforts no surprise

Erica Ogg — Wed, 09 May 2012 18:17:18 +0000

Politico has a great post Wednesday that details how folks in Washington, D.C. are rather astonished how Apple–a company that’s often the target of federal inquiries and investigations– isn’t blanketing Capitol Hill with lobbyists and money. Sure, that seems to go against standard procedure in our nation’s capital. But as is well known in tech, Apple isn’t a company that tends to follow standard procedures.

For the first quarter of 2012, Apple has spent a mere $500,000 on lobbying efforts, which, as Politico points out, is pennies compared to what oft-targeted Google and Microsoft have spent during the same time: $7 million combined. And Apple, despite its current entanglement with the Department of Justice over its role in the e-books market, has actually spent less this year than last year.

This is just not how things are done in D.C. Here’s a sampling of what Washington insiders told Politico:

“I never once had a meeting with anybody representing Apple,” said Jeff Miller, who served as a senior aide on the Senate Judiciary Committee’s Antitrust Subcommittee for eight years. “There have been other tech companies who chose not to engage in Washington, and for the most part that strategy did not benefit them.”
“There’s a difference between being quiet and uncooperative,” said a congressional aide who has dealt with Apple. “Part of the problem being behind the scenes is they have no identity. They have no corporate identity in this town because nobody knows them.”
“What’s happened in Washington more and more is that companies spend money dealing with the regulators even in the absence of pending investigations. … These are de-biasing visits,” said Bill Kovacic, a George Washington University law professor who was a commissioner at the Federal Trade Commission from 2006 to 2011. “I don’t remember Apple making a visit.”

While this may surprise political folks, this will come as a shock to few people in tech or who follow Apple. The company’s secrecy and reticence to telegraph what it’s thinking is legendary. So it’s no surprise Apple isn’t visibly mixing it up in Washington when, as Adam Lashinsky noted in his “Inside Apple” book released earlier this year, Apple doesn’t even mingle freely in its own backyard: employees aren’t visible at Silicon Valley mixers or events, executives don’t sit on other companies’ boards, and they don’t make a show of going out of their way to make any potential friends or gain partners.

Some get it. As one unnamed source told Politico, it could look really bad if they weren’t subtle about trying to gain political influence: “‘It wouldn’t take much to hit the tripwire’ to launch the narrative that ‘Apple has problems and is trying to buy the town.’”

This is not to say Apple won’t step up its lobbying game. It does have a small office for that purpose in D.C., but the way it tries to gain sway over politicians certainly won’t follow any pre-defined script established by other companies — even other tech companies.

And you could say Steve Jobs was plenty savvy about wielding influence in Washington: he just went straight to the top. Sending the president the world’s most anticipated new gadget before it was available to the public is a pretty decent way of making friends.

Thumbnail courtesy of Flickr user Mr. T in DC

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Tim O’Reilly: Why I’m fighting SOPA

Colleen Taylor — Fri, 13 Jan 2012 13:00:52 +0000

Tim O'Reilly

As the debate about the Stop Online Piracy Act (SOPA) rages on from Silicon Valley to Washington DC, a number of the technology industry’s most influential leaders have come out against the proposed legislation, which would give the government and private corporations unprecedented powers to remove websites from the internet for any alleged copyright infringement.

On Thursday, I interviewed Tim O’Reilly about why he believes SOPA is wrong and what the tech industry can do to stop it. His concerns fell into five main categories:

Piracy is not a real problem

The way I see it, there’s a lack of need for any legislation at all. As a publisher, I have a very deep experience here, and the fact is that piracy is not a significant problem. Yes, there are people who are pirating my books, there are people who are sharing links to places where they can be downloaded. But the vast majority of customers are willing to pay if the product is widely available and the price is fair. If you have a relationship with your customers, and they know you’re doing the right thing, they will support you.

The people who are pirating are most likely the people who would never give you a nickel to begin with. Piracy serves people on the fringes who are not being served adequately by legitimate markets. Frankly, if people in Romania can download my books and enjoy them, more power to them. They weren’t going to pay me anyway.

SOPA protects the wrong people

I talked with Nancy Pelosi about SOPA the other day, and she said that the experience with piracy is different for people in the movie industry. Maybe — I’m not a movie producer. But I do know that right now the entire content industry is facing massive systemic changes, and to claim that declining sales are because of piracy is so over the top. Any company that is providing great content online in a way that’s easy to use with a fair price has a booming business right now. The people who don’t are trying to fight that future.

So here we have this legislation, with all of these possible harms, to solve a problem that only exists in the minds of people who are afraid of the future. Why should the government be intervening on behalf of the people who aren’t getting with the program?

SOPA ignores history

If you look at it from a historical perspective, the American book publishing industry as a whole began with piracy; there are lots of documents of Charles Dickens and the like taking a stand against these American pirates who were stealing their work. But America went on to become the largest publishing and copyright market in the world. Once the market matures, the pirates go away. They always do. Legitimate markets work better than pirate markets.

More recently you can see this in what happened with the music industry. For a while, music companies were fighting peer-to-peer file sharing. But once Apple came out with iTunes, which was an alternative that was easy to use and fairly priced, it became a huge business. Our policy makers need to encourage the people who get it right, not protect people who clearly didn’t get it right. They need to protect our future.

Tech and lobbying don’t mix

Certainly, the tech industry needs to do a lot more lobbying in Washington, DC. But the whole notion of lobbying is anathema to so many tech people, and for good reason. We’re used to a world in which people design products that have a purpose, where your work speaks for itself. So yes, the tech industry should try to communicate more with the people in DC, but at the same time, congresspeople need to use more of their own independent judgement.

[Update: O'Reilly has expanded upon the topic of tech industry lobbying in a Google+ post, which can be found here. A portion of his additional comments has been added below.]

For example, when I talked with Nancy Pelosi at [San Francisco] Mayor Ed Lee’s inauguration on Sunday, she assured me that she was opposed to SOPA, but that the bill couldn’t just be voted down because of the concerns of the movie industry. I had this bizarre image of the Google Search Quality team meeting with content farms before rolling out the Panda search update to “take into account their concerns.” In the end, Google was making changes that they knew were in the best interest of their users, and the fact that this would hurt the business of various companies producing low-quality content shouldn’t (and presumably didn’t) enter into the equation.

… This isn’t a matter of simply weighing the concerns of one set of lobbyists against those of another, but using a standard of care and independent judgment about what is best for our society. If Congress isn’t knowledgeable enough to make that determination, they need to be consulting independent experts, not lobbyists for one side or the other.

The US needs tech innovation

Laws like SOPA make us sclerotic as a country, where we have all these extra burdens that provide little benefit. In general it makes America less competitive. If SOPA goes through, it could very well force certain innovative companies to go offshore. There are incumbent industries that will always protest every new technology; but any forward-looking country needs to protect its emerging industries.

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Another use for the cash pile: Apple’s ballooning lobbying spend

Darrell Etherington — Wed, 07 Sep 2011 18:19:56 +0000

Apple spent $790,000 on lobbying efforts during the second quarter of 2011, according to its most recent disclosure report. The Associated Press notes that this is up from $560,000 during the first quarter of the year, and more than double the $330,000 Apple spent during the second quarter of 2010. Why the increasing expenditure on trying to catch the ear of U.S. lawmakers? There are a number of factors involved, and it’s also important to note that Apple isn’t the only big tech company with an expanding lobbying budget.

Google spent $2.06 million during the second quarter, which was up 54 percent from the same time a year ago. And Facebook spent $320,000 during the quarter, which seems low until you consider that it’s actually almost as much as the company spent during all of 2010. Public interest group Consumer Watchdog said when those numbers were released back in July that these companies are “clearly trying to influence policy,” and there are good reasons why the need for them to do so is becoming more urgent.

Apple’s lobbying expenses go toward issues like patent reform, electronic waste and consumer privacy online, all of which are subjects crucial to its continued success. The company is currently involved in a large number of ongoing patent disputes, and would no doubt love to see patent reforms that limit the ability of non-practicing holders to use patents to extract licensing fees in exchange for Apple’s continued ability to sell its devices and software. Privacy is also a hot-button issue, with mobile location services stirring up a hornet’s nest of public and lawmaker concern earlier this year. And Apple’s environmental practices also came under attack in 2011.

As Apple grows, it’s not surprising it feels the need to influence the regulatory environment in which it operates. Lobbying Congress, the Departments of Education and Commerce, the FCC, FTC, EPA and the U.S. Trade Representative are all good ways to do that. Apple’s spend is still far less than that of rivals Google and Microsoft (which spent $1.85 million in the second quarter, up from $1.72 in the first) but it does appear that a bit of an arms race is underway among tech companies when it comes to bringing their issues to the foreground among Washington decision-makers.

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Mr. Schmidt goes to Washington: Google lobbying hits new high

Colleen Taylor — Thu, 21 Jul 2011 22:15:47 +0000

When most people think about Google and Facebook, they think about California’s Silicon Valley. But according to newly filed disclosure documents, the tech industry’s titans are spending more and more time — and money — making their voices heard in Washington, D.C.

Google spent a whopping $2.06 million on lobbying efforts in the second quarter of 2011, according to documents filed this week per the US Senate’s Lobbying Disclosure Act. The search engine giant spent $1.48 million on lobbying in the first quarter of 2011. The company seems on track to clearly outspend its 2010 lobbying budget: Google spent a total of $5.2 million on lobbying efforts last year.

According to the documents, Google’s Q2 2011 lobbying funds were focused on such issues as international tax reform, international freedom of expression and censorship, renewable energy policies, and an H.R. 399 bill titled “Stopping Trained in America Ph.D.s From Leaving the Economy Act of 2011,” to name just a few.

This most recent quarter represents the first time Google has outspent Microsoft in formal lobbying. Microsoft spent $1.85 million on lobbying efforts in Q2 2011, up from the $1.72 million it spent during the first quarter of 2011.

Google’s increasing influence in Washington is setting off alarm bells for some policy watchers. California-based public interest group Consumer Watchdog is calling for Google chairman Eric Schmidt to register formally as a lobbyist, since he personally is spending increasing amounts of time working in government relations.

“Schmidt could well have reached the threshold requiring registration as a lobbyist; he is clearly trying to influence policy,” said Consumer Watchdog director John Simpson in a press release issued Thursday. “It certainly should be checked out.”

The scrutiny is not stopping relative newcomers to the tech industry’s big leagues from trying to have their own say in Washington. Facebook spent $320,000 during Q2, according to regulatory documents filed this week, nearly the same amount that it spent over the entire course of 2010. Facebook has spent $550,000 on lobbying so far this year on such issues as the Children’s Online Privacy Protection Act, the Location Privacy Protection Act of 2011, and an initiative billed as “discussing House, Senate, and Government rules to allow more Government and Congressional offices to access social media and to use social media to engage with citizens.”

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Google Ramps Up Its Lobbying in Washington

Mathew Ingram — Tue, 20 Apr 2010 08:30:10 +0000

Google has been stepping up its lobbying game in Washington, according to documents filed with the Senate Office of Public Affairs, which tracks the behavior of lobbyists. A non-profit agency called Consumer Watchdog (formerly known as the Foundation for Taxpayer and Consumer Rights) noted the filing in a news release today, saying the company was relatively new to the “influence-peddling game” but that it is now “one of the highest rollers in Washington.” According to the group, Google boosted its spending in the first quarter by 57 percent over the previous year, to $1.3 million, and spent over $4 million in total on lobbying efforts last year.

Google has been fighting a number of battles in Washington recently, including recent complaints to the FTC that Buzz, the social networking tool it launched in February, may have breached privacy laws. Google has also been struggling to overcome criticism of its proposed AdMob acquisition, which some believe could give the company too much market share in digital advertising. The Federal Trade Commission has been reviewing the $750 million acquisition deal for months.

Related content from GigaOM Pro (sub req’d): Forget Twitter, the Real Firehose is Government

Post and thumbnail photos courtesy of Flickr user Civil Rights

Top 5 Tips for Cleantech Startups Headed to Washington

Justin Moresco — Wed, 23 Sep 2009 04:00:35 +0000

With so much activity in Washington, D.C., these days — from funding opportunities to policies like cap and trade — that could affect cleantech industries, many startups have sent their executives to the capital or hired lobbyists in the hope of adding their voices to the debate. But cleantech startups need to be careful when it comes to dedicating their limited resources to these efforts. While spending time in D.C. can certainly bring rewards, once there it’s easy to spend tons of cash without much to show for it. Here’s our list of the top 5 things startups should know before hopping on a plane to Washington.

Don’t hire a lobbying firm first. Before ever stepping foot in D.C., identify which issues you think you can add value to, says John Stubbs, executive director of the Global Innovation Forum, a Washington, D.C.-based nonprofit that works to promote innovation for solutions to global problems. Those issues could be cap-and-trade legislation, renewable portfolio standards, tax credits, stimulus, patent reform or others.

Then, if you want to dip your toe in the water, join a group that has a presence in the nation’s capital, like the American Council on Renewable Energy. Through the group, Stubbs says, you can participate in efforts to talk to legislators, their staff members and Obama administration officials. This will help you learn how you can fit in and how you can influence government decisions. Through this learning process, you’ll become more informed about what type of lobbying firm, if any, you might want to hire.

Don’t threaten to go to China. Business executives often think they can scare legislators and their staff into making policy changes by threatening to build their factories or take their businesses to China. Don’t do it, John Gimigliano, a principal at professional services firm KPMG, said during a panel discussion at the recent AlwaysOn GoingGreen conference in Sausalito, Calif. Even if it’s true, the threat has “lost its punch” because so many have used it, Gimigliano said. You have to come up with something else to grab their attention.

Focus on building relationships. What Congress and their staff are really looking for are experts on different topics to whom they can turn to for advice, says Betsy Mullins, senior vice president of government affairs for TechNet, which promotes technology and innovation in Washington, D.C. You’ll stand out if you can prove to policymakers that you’re an expert in your field and you have solutions to current problems. Focus on building relationships and demonstrating that you’re a thought leader in your field. If successful, Congress and their staff will start coming to you. Don’t leave the capital without having asked legislators: “What can I do for you?”

Don’t outsource your public affairs efforts. This relates to building relationships. Some executives think they can hire high-priced lobbyists who will then do their bidding for them, said Gimigliano. If a startup is serious about having an impact in D.C., then C-level executives will have to spend time there. They will have to meet with staffers and build trust. One smart way to do that is to form networks with other organizations around issues that matter, says Global Innovation Forum’s Stubbs. You can then approach legislators together, and you’ll be taken more seriously because it will appear that your issue isn’t just about you, but about an entire industry.

Manage your expectations. Many issues that involve government take a great deal of time to flesh out, says TechNet’s Mullins, for example patent reform has been under way for seven years and still isn’t resolved. You need to think about how you measure success. Certainly if your main goal is to get, say, an extension of a tax credit and it is extended, then that’s a success. But there are other ways to have influence. You could develop a strong relationship with a legislator or you could produce a white paper that gets broad circulation among staffers. Efforts in the capital should be seen as any other investment. They take time, and it’s not enough to just bring a checkbook.

Image courtesy of Wikimedia Commons.

This article also appeared on BusinessWeek.com.

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Daily Sprout

Josie Garthwaite — Fri, 22 May 2009 23:56:06 +0000

Digital Lumens Lands $6.3M: Digital Lumens, Inc., a quiet startup based in Salem, Mass. that’s working on high-efficiency, low-cost LED lighting, has raised $6.3 million in venture funding. — Mass High Tech

Is Waxman-Markey Enough? Will the compromises that allowed the Waxman-Markey climate and energy bill to make it out of committee make it harder to get the rest of the world in line to reduce global greenhouse gas emissions? — WSJ’s Environmental Capital

Top Tech Trends: Advanced batteries and efficiency management services make cut for the 11th annual Churchill Club Top Tech Trends list. VCs on the panel also said they expect the government to make poor investments in new technology. — CNET’s Webware

Broken Record: Sanyo says it has broken its own record for solar cell conversion efficiency, going from 22.3 percent to 23 percent efficiency in lab tests verified by the National Institute of Advanced Industrial Science and Technology. — PV-Tech

Cozy Climate Lobby: The top ten most popular lobbying firms looking to influence the climate change debate on behalf of local governments, paper companies, alternative energy groups and oil and gas companies, among others, employ lobbyists who have worked for the House energy panel. — NYT’s The Caucus

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Dropbox Opens To the Public

Scott Blitstein — Thu, 11 Sep 2008 19:33:25 +0000

File sync, storage and sharing site Dropbox launches to the public today ending the need for pesky beta codes or invites to this very cool service.

Mike gave us a glimpse of Dropbox back in March, and in my testing of services of this type I found Dropbox to be among the easiest to use and manage. Because there is no new interface to learn, it just works for me, and is easy to introduce to clients. A nice demo screencast does a great job of explaining how it all works.

Also announced today is the availability of a Linux client to add to their existing Windows and Mac options as well as information on new storage plan options. The 2GB free accounts are still around but if you need more space you will have the option to upgrade to a 50GB box for $9.99 / month or $99.99 / year.

Will you try Dropbox? With the myriad of sync and share options available, what do you use to keep files in sync?

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Top 10 Alternative Energy Lobbying Groups in 2008

Katie Fehrenbacher — Mon, 04 Aug 2008 18:00:43 +0000

As alternative energy becomes a hot button issue on the campaign trail, trade groups and individual companies in the sector are fighting to have their voices heard on the Hill — and money talks. Up until June 30, 2008, companies that make up the alternative energy production and services sector spent $11.39 million on lobbying, according to the Center for Responsive Politics — a little more than a fifth of what the traditional oil and gas industries spent for the same period at $52.21 million. Still, at that pace, the sector will overtake its lobbying efforts from last year, which totaled $16 million for the year.

The Top 10 alternative energy lobbying groups are largely biofuel, solar and wind trade groups, though the biggest contributor by far is the “American Coalition for Clean Coal Electricity,” which is made up by companies that depend on coal to produce power. We guess it’s not surprising that the group with some of the most established and well-funded companies is investing the highest amount in lobbying, but that doesn’t make it less disturbing, as the group is likely trying to maintain its dominant power-producing position. So far this year, the American Coalition for Clean Coal Electricity gave more than double the amount of the next highest lobbying group.

To us, one of the most surprising on the list is that smart grid “startup” GridPoint has spent $172,061 on lobbying efforts. We know the company has been backed by millions from Goldman Sachs and other investors, but that is a lot of money for a young firm. Wondering what they’re up to? Send over your educated guesses. (We contacted them and are waiting to hear back) Anyhoo, here’s the list:

American Coalition for Clean Coal Electricity: $1.87M
National Biodiesel Board: $679,913
Solar Energy Industries Association: $535,000
Clean Energy Group: $492,500
American Wind Energy Assocation: $460,379
Poet: $360,000
Rentech: $250,000
Green Hunter: $220,000
Noble Environmental Power: $200,000
GridPoint: $172,061

Data from the Center for Responsive Politics.

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