Amazon Sets Own Lobbying Record as It Vies for Pentagon Cloud

(Bloomberg) -- Amazon.com Inc. topped its own previous record on lobbying in the first quarter as it came closer to winning a controversial $10 billion Pentagon cloud contract and outspent Alphabet Inc.’s Google for the first time in more than a decade.

The retail giant, which has rapidly expanded its Washington influence operation in recent years but lagged behind Google in total outlays, spent $3.9 million in the first three months of 2019, up from $3.4 million a year earlier, according to disclosures filed with Congress in advance of Monday’s deadline.

Amazon became the top spender among American technology companies in the quarter as Google’s lobbying outlay dropped to $3.4 million from $5 million a year earlier. Facebook Inc.’s spending crept up to $3.4 million in the first three months, from $3.3 million. Amazon topped its previous company quarterly record from the last quarter of 2018, when it spent $3.7 million. The disclosures cover spending through March 31.

The tech companies’ lobbying trends emerged after the Democratic takeover of the House sparked a reshuffle on K Street, with companies seeking to appeal to the new leadership and address a new congressional agenda focused on issues including health care and prescription drug prices, trade deals, privacy and investigations of President Donald Trump.

Cloud Competition

Four tech giants involved in the Pentagon’s winner-take-all competition for cloud services all increased lobbying spending significantly in the first three months.

Amazon is now one of two finalists, alongside Microsoft Corp., that edged out Oracle Corp. and International Business Machines Corp.

Oracle -- which spent $1.3 million during the quarter, up nearly 9 percent from a year earlier -- has waged a court battle over the bid, alleging that the process was marred by conflicts of interest and unfair requirements that favored Amazon. Microsoft spent $2.8 million on lobbying, up 21 percent from a year before, while IBM spent $2 million, an annual increase of more than 35 percent, the records show.

Amazon, which lobbied more government entities than any other tech company in 2018, is now pushing to consolidate its influence, brushing aside trade groups it doesn’t like, creating new ones it does, and sending senior executives to woo antitrust enforcers.

Facebook faces the most frequent criticism in Washington among its tech peers for repeated allegations of privacy violations and for allowing its platform to be exploited by Russians during the 2016 presidential campaign. It’s likely to be slapped with billions of dollars in fines by the Federal Trade Commission in the Cambridge Analytica scandal, in which a British political consultancy with ties to Trump’s 2016 presidential campaign obtained data on millions of users. The matter also spawned a series of probes by state attorneys general.

Facebook and the other tech giants are also contending with increasing anger from lawmakers on both sides of the aisle -- and from the growing 2020 Democratic presidential field.

Last month, Democratic Senator Elizabeth Warren of Massachusetts, who is seeking her party’s nomination for the White House, called for the break up of the largest tech companies including Amazon, Google and Facebook and the unwinding of major deals such as Amazon’s acquisition of Whole Foods and Facebook’s purchase of Instagram. Amazon and Google disclosed lobbying on antitrust or competition, although the filings don’t always detail companies’ exact positions on the issues.

Amazon, Facebook and Google also lobbied on privacy in the first quarter, as lawmakers continued efforts to write a national online privacy bill that would regulate vast swaths of the digital economy. Momentum to pass a federal privacy law is building after years of data scandals, the implementation of tough new rules in Europe and concerns from companies that a patchwork of state laws could be difficult to comply with.

Twitter Inc. spent a record $420,000, up from $150,000 a year ago.

Telecom Lobbying

In the telecom sector, which has been dominated by mega-mergers, Sprint Corp.’s lobbying expenditure surged more than 70 percent to $1.4 million in the first quarter, when it disclosed lobbying on its pending $26.5 billion merger with T-Mobile US Inc.

The acquisition, which would combine the No. 3 and No. 4 American wireless carriers, has run into obstacles in Washington. In February, T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure came before to Congress to defend the deal, which has prompted concerns from consumer advocates and policy makers about higher prices and decreased competition.

Last week, Legere met with antitrust officials in a bid to head off worries the combination of the two companies could harm consumers.

The Federal Commissions Commission also at one point paused its review of the deal to evaluate new information from T-Mobile. The new information struck some observers as a sign that the merger might be foundering.

Legere, in a March return to Capitol Hill, defended spending more than $190,000 at Trump’s Washington hotel since proposing the merger. He said he had long stayed at the president’s hotels, though lawmakers raised concerns that he was trying to curry favor with the White House.

AT&T Inc., which completed its purchase of Time Warner in February after a court battle, decreased its lobbying spending by more than 37 percent in the first quarter, to $2.6 million compared with the first three months of 2018, the disclosures show.

Boeing Crisis

Boeing Co., which faced one of the worst crises in its history because of two deadly crashes of its 737 Max 8 aircraft, spent $3.3 million on lobbying, nearly 10 percent less than it did a year earlier.

The pair of disasters prompted lawmakers, regulators and federal prosecutors to scrutinize the company’s coziness with the Federal Aviation Administration, and Trump himself announced the U.S. would join other nations that had grounded the Max planes.

The first quarter decrease in spending belied Boeing’s longer-term trend in lobbying outlays. The company, the second-largest U.S. government contractor, has almost tripled its spending on U.S. politicians and political committees in the past decade.

Among business lobby groups, the U.S. Chamber of Commerce, which is routinely the top lobbying spender overall, shelled out $16.5 million during the quarter, up slightly from $15.4 million a year earlier. The group was among dozens of business groups in February that tried to limit Trump’s power to impose tariffs on national security grounds.

©2019 Bloomberg L.P.