Big Tech shifts lobbying focus in Q1 as Washington eyes antitrust reform

Big Tech companies are playing defense in Washington, with Amazon.com Inc. and Facebook Inc., in particular, ramping up lobbying spending during the first quarter under the new Biden administration.

Amazon spent $5.1 million on lobbying during the period, with computers and infotech issues as its top focus, followed by antitrust concerns. In comparison, Amazon spent $3.0 million on lobbying in the first quarter of the Trump administration, when taxation ranked as its second lobbying priority, after computers and infotech, according to data from the Center for Responsive Politics' OpenSecrets.org website.

Similarly, Facebook's lobbying spending jumped nearly 50% between the first quarter of 2017 and 2021, up to $4.8 million in the most recent period. Facebook's lobbying earlier this year focused on a variety of industry-specific topics, including computers and infotech, telecommunications, and intelligence matters. In early 2017, taxation was Facebook's third top issue, after computers and infotech and intelligence matters.

The first-quarter spending is indicative of a longer-term trend of more lobbying by Amazon and Facebook in Washington, as Big Tech finds its government relationships more strained than in years past.

"Big Tech is on defense because you have the Democrats controlling the Senate and the House. And you have a president who has made antitrust and monopolies a big deal," said Robert Atkinson, president of the Information Technology and Innovation Foundation, a technology and public policy think tank. "The companies see themselves in the crosshairs of a fairly aggressive push to restructure U.S. antitrust in a pretty fundamental way."

The maturing of the tech industry is another factor behind the shift, as companies like Facebook are far from their startup days, Atkinson noted. Atkinson compared Big Tech's relationship with Congress to a long-term marriage that has hit a rocky period.

"They're not quite getting a divorce, but they're certainly not happily married anymore," Atkinson said, adding that to many lawmakers, Big Tech is now "the new 'Big Tobacco' or 'Big Oil.'"

Given the massive size of the Big Tech companies — Amazon's market capitalization now exceeds $1.6 trillion, while Facebook's is approaching the $1 trillion mark — the lobbying spending is practically a rounding error for these companies, and investors understand it's now part of the price of doing business, said Scott Kessler, global sector lead for technology, media and telecommunications at investment research company Third Bridge.

"If you look at it in terms of a percentage of overall cash and investments or even what they're generating in terms of free cash flow every quarter, I think it ends up being de minimis," Kessler said. "They [the companies] probably look at it as a smart and sound way to allocate that capital."