Amazon.com Inc. is flexing its lobbying muscles in Washington, D.C., and analysts anticipate that trend to continue as the Seattle-based online retailer confronts a barrage of potential regulations around privacy and antitrust issues and facial-recognition technology.
The company's lobbying expenditure has grown more than tenfold over the past decade. It reached $14.4 million in 2018, up from $1.34 million in 2008, according to the Center for Responsive Politics' OpenSecrets.org website. The number of lobbyists employed has grown over the same time period to 103 from 12.
In the first quarter of 2019, Amazon spent $3.98 million on lobbying, Daniel Auble, a senior researcher with CRP, told S&P Global Market Intelligence in an interview. Meanwhile, Amazon is bolstering its presence in the D.C. area with plans for its $2.5 billion headquarters in Arlington, Va. Analysts say the new campus could help the e-commerce giant to further wield its influence.
"It looks like they are bumping it up at about the same amount each year," Auble said of Amazon's lobbying efforts. "I wouldn't be surprised at all if 2019 is a little higher."
Amazon is facing political scrutiny at the moment. On July 16, representatives at Amazon and other U.S. tech giants Apple Inc., Alphabet Inc.'s Google LLC and Facebook Inc. faced a U.S. House Judiciary Committee subcommittee as part of a bipartisan probe into online platforms and their market power.
The investigation, announced in June, will focus on documenting competition problems in digital markets, examining whether "dominant" firms are engaging in anticompetitive conduct, and determining whether current antitrust laws are adequate. It will include a series of hearings held by the Subcommittee on Antitrust, Commercial and Administrative Law. There is no timeline for when the investigation will wrap up.
Tom Forte, managing director with D.A. Davidson in New York, said Amazon's future lobbying efforts will likely center around areas such as defense, the national privacy debate, and rules associated with the data that Amazon collects through its numerous Alexa devices.
"If the government changed the playing field for data and said, for example, that Amazon has to wipe clean the Alexa devices every night, that could make it much more difficult for Amazon," Forte told S&P Global Market Intelligence. "While the stakes for Amazon in privacy are not as high as they are for Facebook or Google, they are still very high."
So far in 2019, Amazon has lobbied for about 30 bills, including the Department of Defense Appropriations Act, Department of Homeland Security Appropriations Act, the Small Business Regulatory Flexibility Improvements Act and the End Shutdowns Act, according to CRP.
Forte added that Amazon could also focus future lobbying efforts on regulated markets such as the healthcare field and the grocery industry, where it has made investments. In 2018, Amazon bought the online pharmacy PillPack and teamed up with Berkshire Hathaway Inc. and JPMorgan Chase & Co. to form a new healthcare company for their respective employees. In 2017, it purchased supermarket operator Whole Foods Market Inc.
"They got a lot deeper in grocery, and that has a whole different set of lobbying [efforts] than selling books on the Internet," Forte said.
Forte said it also is likely Amazon will center its lobbying efforts on protecting consumers against counterfeit goods and pushing for air rights for drones. In June, Amazon unveiled its newest delivery drone design and said it could start making drone deliveries within months, pending federal regulatory approvals.
In an email, an Amazon spokesman didn't provide specifics but said the "Washington, D.C. team is focused on ensuring we are advocating on issues that are important to policymakers, our employees and our customers."
The company lobbies for bills on a range of issues, including everything from defense and immigration to transportation, trade and labor. Amazon lobbied intensely for the Music Modernization Act, which proposed reforms to the music licensing landscape and whose text was included in a bill that passed in 2018.
The lobbyists are needed not only to help Amazon react quickly when a regulatory issue comes up but also assist the company with getting its message across to lawmakers.
Tech firms often do a "terrible job" of communicating to government officials precisely what they do, not just in terms of providing services to consumers and the Department of Defense but their contribution to the overall economy, said Greg Francis, managing director with global public policy firm Access Partnership in an interview.
"Communicating exactly what the problem is and what possible solutions exist is something that lobbyists have to do," Francis said. "That might mean hiring a lot of people to get the message exactly right and communicated to the right channels."
HQ2 as tool of influence
Analysts say Amazon could potentially utilize its planned Arlington headquarters to influence Washington by hosting parties and events at the $2.5 billion campus, whose first phase is expected to begin in the first quarter of 2020 and be completed by 2023. The company is working with Arlington County, Va., to kick off an extensive development review process in July for HQ2.
"It doesn't hurt," Francis said. "The minute you make an investment of that scale, it has effects not only across a bunch of different Congressional districts but across whole states."
Lawmakers and top decision makers also could showcase complicated technology such as facial recognition and drones to federal regulators at HQ2, said Robert Atkinson, president of the Information Technology & Innovation Foundation, a nonpartisan group that focuses on the intersection of innovation and public policy.
"The fact that Amazon is here with a lot of technical people certainly could make it easier to communicate in an accurate and effective way," Atkinson said. "As much as people might not like it, Washington is built upon relationships and it's built upon long-term relationships, not short-term transactional ones. Having face-to-face relationships with people just doesn't hurt. It's a lot easier to demonize somebody or put in place policies that hurt them if you don't really know them."