Not far from the doorsteps of the European Parliament’s Spinelli building is a tree, planted in the middle of a small roundabout halfway down the Rue Wiertz. A plaque marks its relevance, having been placed there by the Society of European Affairs Professionals. This is Brussels’ ‘Lobbying Tree.’
Long has the Lobbying Tree been emblematic for the so-called ‘interest representatives’ of the European capital, a symbolic portal for those fortunate enough to be in possession of the lobbying credentials that gain them access to the Parliament’s imbroglio of corridors and chambers, with the ultimate objective of having their interests reflected in texts adopted by the EU’s democratic institution.
This is an influence that, over the years, has not waned. The former Dutch MEP Alman Metten, one of the forerunners in pushing for regulation of the lobby over thirty years ago, was said to have referred to lobbyists in the city as “the terror of Brussels.”
Fast forward several decades and the city has seen a transformation of the lobbying ecosystem, including the 2011 cash for influence scandal as well as an explosion of industry influence in Parliament in the form of a multitude of intergroups with heavy lobby links. Metten would most probably choose a more colourful descriptive for the state of corporate lobbying in Brussels today.
Such a condition has recently been surmised in a new report from the Corporate Europe Observatory and Lobbycontrol, who have found that the digital economy now garners the lion’s share of the lobby’s spending resources, with a total of 612 companies, groups and businesses seeking to influence the passage of policy in this field. That outlay surpasses other big industry lobbying accounts, including those of the pharma, energy and finance sectors. And while the corporate interest in the passage of EU digital policy comes from a broad church, the study shows that just ten firms dominate the total spend, including the GAFAM five of Google, Amazon, Facebook, Apple and Microsoft.
The recent upturn in lobbying spending however centres around the European Commission’s ambitious plans to regulate the digital economy, in the form of the Digital Services Act (DSA) and the Digital Markets Act (DMA). The study pitches 75% of the 271 lobby meetings with Commission officials on the DSA and the DMA as having been held with representatives from Big Tech.
While the meetings in themselves are not necessarily an accurate index of industry influence, it is the extent to which the process of engaging with EU officials has become veiled amid a web of intermediary representation. That is to say, how the views of the more dominant players in the tech ecosystem are often siphoned through a network of trade associations and think tanks.
From time to time, this can cause internal conflicts within such groups, as the more dominant firms present within these organisations attempt to dominate the narrative on a particular policy, silencing some of the smaller members in the process. For the Corporate Europe Observatory, this type of a culture can result in an ambivalence with regards to the positions of some of the smaller players in Europe’s technology space.
“The Big Tech lobbying techniques have ‘confused’ some of the voices of the smaller firms,” Margarida Silva, one of the authors of the report from the Corporate Europe Observatory, told Tech.eu. “On the one hand, no SME can match the resources of the tech giants. But on the other hand, some of the more dominant firms often finance many associations that claim to represent the views of SMEs.”
“This results in a situation where it’s not entirely clear who is speaking independently in the policy debate, and whose voice has been pressured into adopting a particular position,” she added.
The study marks €97 million as the expenditure that has been poured into lobbying on the Digital Markets Act and the Digital Services Act. And while the lobbying objective is essentially to influence the outcome of the adopted texts, the regulations themselves have emerged in response to a reality in which Big Tech has failed to tame its reputation in Brussels.
With the DSA, we are talking about ongoing concerns surrounding the spread of illegal and harmful content, which the regulation attempts to establish a harmonized framework across the EU for. The DMA meanwhile has emerged from years of antitrust litigation in the digital economy, in which Commission competition enforcers have taken aim at the anti-competitive practices of some of the world largest technology firms.
Just this year, the Commission levelled a statement of objections against Apple’s music streaming services for an abuse of dominance, and also opened an investigation into Facebook’s misuse of data received from external advertisers as well as Google’s market power in the display advertising business. Moreover, the European Commission launched an inquiry into the consumer internet of things sector in July 2020, and MLex reported this week that as part of this probe, Google Assistant is being looked at closely.
Since the start of the Commission’s mandate in December 2019, other cases have been raised, including three separate investigations into Apple’s app store practices and one into Amazon for its user interface features and its prime service. Amazon has also come under the radar for an alleged abuse of dominance stemming from the use of non-public independent seller data. In all of these cases, should a breach of competition rules under Articles 101 or 102 of the EU treaty be identified, the company may be issued with a fine of up to 10% of its global annual turnover.
Antitrust cases often take years to conclude and, for the Big Tech firms themselves, can result in an enduring reputational stain the longer they go on. The Digital Markets Act is an effort to introduce ex ante obligations and prohibitions against certain anticompetitive practices, thereby avoiding the need to embark on lengthy and costly enforcement actions. In this sense, the DMA, should it prove to be an effective deterrent against anticompetitive practices, may actually be beneficial to the Big Tech firms reputationally, should they be trusted to avoid violations in the first place, of course.
Despite this, the lobbying against the Digital Markets Act has been fierce. As the two texts make their way through the inter-institutional process, this is only becoming more apparent.
Examples include recently revealed documents detailing an email exchange between Apple representatives and the Estonian government. The correspondence highlights Apple’s position on the DMA and why they believe obligations for interoperability and data access could be a ‘risk’ to the digital economy. Apple even went as far as to say that interoperability obligations as laid down in Article 6.19(c) could even impact the “integrity of the entire ecosystem from a cybersecurity and foreign policy point of view.”
Interoperability and data access are two key areas where Europe’s smaller tech ecosystem have long called for more rigorous obligations to be put in place. One case in point in this area was a letter sent to MEPs in March from forty European tech firms, calling for more interoperability standards to be introduced into the DMA, as such can “reduce the anti-competitive barriers created by the lock-in of established user bases.”
While the long-term goal from Brussels is that antitrust cases in the digital economy should no longer be necessary in the future after the Digital Markets Act is adopted, this will depend largely on the content of the text itself. That content is what so often succumbs to an overly burdensome industry influence.
There should be nothing wrong with the science of lobbying per se, but the creative instrumentalization of the lobbying machine in Brussels by some of the world's most powerful organizations should raise ethical questions that need to be addressed, particularly at a time in which the competitiveness of the sector is at the top of the legislative agenda.
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