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Europe’s push to rewrite its digital rulebook has given birth to a new kind of lobbying battle almost entirely waged in the virtual realm, creating new tactics and alliances.
The fight represents an unprecedented shift in the lobbying playbook that has caused internal fights among Big Tech firms, limited access for outsiders and led to at least one major blunder from Google, a key industry player.
At the heart of the battle are two major pieces of regulation set to be unveiled Tuesday, the Digital Services Act (DSA) and the Digital Markets Act (DMA). Both have far-reaching consequences for Silicon Valley, promising everything from blockbuster fines for large digital firms that fail to remove online hate speech to antitrust restrictions on how the biggest players can operate.
“If you are considered to be a gatekeeper, these are the things that you will have to do, and these other things you can not do,” Margrethe Vestager, the European Commission executive vice president who’s overseeing the new rules, told reporters in early December, referring to big platforms.
Such an overhaul was always going to prompt a frenzy of lobbying in the footsteps of Europe’s reform of online copyright rules or the General Data Protection Regulation, the European Union’s revamped privacy laws.
But unlike those fights, the lobbying battle over the DSA and DMA has taken place almost exclusively in virtual channels closed off to the public. That has further reduced the transparency of an already opaque process as in-person meetings gave way since March to frenzied WhatsApp chats and a non-stop virtual meetings on Zoom.
With the lobbying around the proposals set to continue for years as the legislation snakes its way through the EU legislative process, POLITICO checked in with dozens of lobbyists and European Union policymakers in recent weeks to shine a light on these virtual exchanges.
Here are a few of the notable shifts and highlights:
— Google led in number of meetings. Almost 160 lobby meetings on the Digital Services Act and Digital Markets Act took place between companies, civil society groups and others and Commission officials, according to research from lobbying watchdog Corporate Europe Observatory. Google has obtained the most meetings, followed by Microsoft and Facebook, according to the group.
— The rise of the CEO-lobbyist. Thierry Breton, the French commissioner in charge of overseeing the proposals, made it clear that he — as a former CEO — would only speak to top executives. As a result, powerful industry players scored privileged virtual access to key policymakers, while smaller players and civil society struggled to be heard. In the era of strategic autonomy, European industrial champions were also better positioned to get access to decision-makers.
— Public squabbles between tech giants. Tech companies typically work together in lobbying groups to increase leverage. But differences over the European Commission’s planned antitrust overhaul forced them to split ranks and redrew the contours of major tech alliances, with Facebook calling out Apple’s alleged abuse of its online app store in a pitch to EU officials and Microsoft urging that the other large platforms should be regulated.
— The fight changed focus halfway. After initially prioritizing Europe’s new content moderation rules, the likes of Google and Facebook shifted gears over the summer when they realized Brussels’ renewed digital competition push, including potentially banning firms from entering new online markets, had become a bigger threat to their core businesses.
— The lobbying also prompted at least one major blunder. Google, which had rejiggered its public policy team in May ahead of the upcoming proposals, scored a major own goal when its internal lobbying plan — a strategy that called for undermining Breton — was leaked. The document’s publication weakened Google’s position within parts of the Commission, according to two EU officials.
Shift from DSA to DMA
Europe’s digital reboot was expected to radically change the way tech companies operated, including wide-ranging responsibilities for policing how people acted online that the previous Commission started to draft in April 2019. The Digital Services Act formed part of a “technological sovereignty” game plan championed by the new Commission to help the bloc catch up with international competitors like the United States and China
But as the COVID-19 pandemic began to take root in the spring, industry lobbyists learned that EU officials’ content moderation plans — despite the potential for sizable fines — did not go as far as many had first feared, in part because companies would still have a say in how they would be regulated. That decision, according to three industry lobbyists who spoke on the condition of anonymity, reduced the proposal’s threat for many online platforms.
More important, companies realized they faced a more pressing concern: The Digital Markets Act. The proposal is a separate EU effort to overhaul digital antitrust rules that would set a list of dos and don’ts for so-called gatekeeper companies, or large online platforms that dominate online markets like social media or search.
“Everybody seems to agree on content removal — these are things tech companies can handle, there are not existential threats,” said Jan Penfrat, senior policy adviser at EDRi, the digital rights group. “That’s where the DMA is a much bigger threat to them and a much bigger opportunity for the EU.”
The shift altered the lobbying dynamic.
Nine months ago, civil society groups regularly butted heads with the industry over nuances of online content moderation which lie at the heart of the proposals. Opposing sides bickered in meetings with the Commission over the balance between protecting people online from harmful material and upholding the right to freedom of speech.
But since July, with tech companies’ almost exclusively focused on the upcoming antitrust rules, digital rights campaigners and other nonprofits have mostly been cut out of the discussion, according to four lobbyists who have been involved in the recent battle. These groups do not represent corporate interests directly affected by the antitrust proposals and often have limited competition expertise to bring to the table, two of the people added.
Instead, traditional corporate enemies have lined up against each other.
That includes powerful domestic publishing groups — often critics of Big Tech — railing against these firms’ online dominance. Silicon Valley has been quick to push back, arguing they have helped keep Europe going during the ongoing pandemic compared to many of the region’s traditional industrial players.
“The DMA has become the focus of people’s attention,” said Angela Mills Wade, executive director of the European Publishers’ Council, a trade body whose members include News UK, the New York Times and Axel Springer (a co-owner of POLITICO’s European edition). “It is supposed to deal primarily with the digital gatekeepers.”
COVID-19 lobbying
Nick Martlew feels shut out of Europe’s digital rulemaking — and it’s not because he lives in London.
As acting executive director of Digital Action, a nonprofit organization that helps other human rights campaigners coordinate their lobbying activities, he has found it tough to break into the well-entrenched networks that fuel much of the Commission’s digital thinking.
“It’s been a pretty exclusive process,” he said, adding that panel discussions on Zoom don’t offer the same face time with officials compared to pre-COVID-19 meetings and conferences. “A conversation about inclusion isn’t really happening.”
Despite the ongoing pandemic, Commission officials still have found time to meet with more than 60 organizations — everyone from Google and Spotify to industry groups for the toy and publishing sectors — about the digital overhaul, according to the EU’s transparency records. Companies have earmarked, collectively, tens of millions of euros for their Brussels lobbying efforts, though voluntary disclosures on corporate spending in 2020 have yet to be made public.
Tech bosses like Facebook’s Mark Zuckerberg and Google’s Sundar Pichai have chatted with Commissioners about online content and digital competition. Traditional lobbying stalwarts like the EU’s publishing industry also have urged officials to give them a fairer shake on how their content earns revenue online.
But with much of Europe mostly on lockdown because of COVID-19, many lobbyists have resorted to private networks of contacts, swapping WhatsApp messages and Twitter messages to share the latest gossip and to figure out how best to break the ice with EU officials on awkward Zoom calls.
This digital lobbying — where personal contacts are more important than ever — is not trivial. It may significantly alter the shape of Europe’s digital overhaul, favoring those will existing access over those who don’t, according to Andreea Nastase, an assistant professor at Maastricht University whose research focuses on EU lobbying and transparency.
“It’s always been an insider’s game,” she said. “People who are already inside the circle will be able to reach their contacts within the EU. Those who aren’t, will not.”
Internal tech warfare
When it comes to lobbying on the Digital Markets Act, many of the Big Tech firms will be forced to go it alone — and internal skirmishes are already starting to break out.
“The DMA’s starting point — targeted at a few companies, big and controversial — creates a harder setting for Big Tech companies,” said Margarida Silva, researcher at Corporate Europe Observatory.
In the past, tech companies had relied on industry groups to promote a united front from Silicon Valley. And on the Digital Services Act, the tech sector has managed to speak with one voice.
But exactly because these trade associations have wide memberships — with companies promoting different antitrust priorities — it has been difficult for them to define a common position on the Digital Markets Act. Many are actively briefing directly against each other to gain an advantage, according to four industry lobbyists and documents submitted to EU officials.
“On competition issues, all associations will fight internally and it’s not a surprise because members have different business models,” said Grégoire Polad, director general of the Association of Commercial Television in Europe, a trade group for broadcasters. “That’s where the Commission has the best chances of moving forward, when trade associations are divided.”
For instance, in its discussions with and official submissions to the Commission, Facebook — likely to be regulated as a digital “gatekeeper” — highlighted what it believed were unfair trading practices related to how Apple has been running its app store. Both companies compete to offer online games, and Facebook wants the new competition proposals to limit Apple’s ability to favor its services over those offered by the social network.
“Apple controls an entire ecosystem from device to app store and apps, and uses this power to harm developers and consumers, as well as large platforms like Facebook,” the social networking giant said in a statement to POLITICO. “We hope the DMA will also set boundaries for Apple.”
Apple did not reply to a request for comment.
Smaller tech companies like Booking.com, which may also be viewed as a dominant player under the EU’s competition overhaul, have also been quick to distance themselves from larger competitors like Google.
The search giant’s lobbying strategy — outlined in a leaked internal document from October reviewed by POLITICO — included sowing division between different parts of the Commission in charge of drafting the new digital proposals. But Google executives also hoped to woo companies like Booking.com by showing how such smaller, European firms could be hurt if the EU’s competition plans were too restrictive. French weekly Le Point initially reported about the strategy. A Google spokesman declined to comment specifically about the leaked document.
It did not take long for the online booking website to push back hard and distance itself from the U.S. tech giant.
“We have small market shares compared to companies like Google,” said Glenn Fogel, Booking.com’s CEO. “How could anybody put those two companies under the same circumstances. That’s nuts.”
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