Google in last-ditch lobbying attempt to influence incoming EU tech rules

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Google is making a last-ditch effort to change the EU’s incoming laws on Big Tech with a flurry of advertising, emails and targeted social media posts aimed at politicians and officials in Brussels.

As EU policymakers put the finishing touches to the Digital Markets Act (DMA), executives at Google’s headquarters in Silicon Valley are stepping up their efforts to water down parts of the legislation that they fear may have a severe impact on their business.

“Top executives in California have known about the DMA all along but they are only waking up now,” said one Google insider.

The campaign includes direct lobbying by Google, but also by several trade associations that the search engine giant funds.

Kim van Sparrentak, a Dutch MEP, said she had noticed a marked escalation in lobbying in recent weeks, with the message that curbing Google would harm small businesses.

She said she had been invited to discuss her views with Google, at a time of her choosing, and had been invited to an event organised by the company on the benefits of digital marketing to small businesses.

She was also lobbied by the Connected Commerce Council, whose partners include Google and Amazon, with a letter signed by small business owners saying: “Please don’t make it harder for my business.”

Other MEPs and officials said their Twitter feeds had recently been filled with adverts from tech lobby groups on issues that Google particularly cares about. “My feed is on overdrive,” said one EU diplomat.

Targeted advertising

One campaign against a proposed ban on targeted advertising, which appeared on Twitter and in the trade press, was led by IAB Europe.

“I’m being targeted with a nearly unrecognisable ad aimed at EU officials promoting false info and solely referring to studies of IAB,” Alderik Oosthoek, a policy adviser at the European Parliament, wrote on Twitter.

The DMA, which has made smooth progress so far through the EU parliament and is likely to come into force at the beginning of 2023, aims to curb the power of big tech “gatekeepers” – companies such as Google whose platforms dominate the online economy. Last week Germany’s competition watchdog formally defined Google as a “gatekeeper”, opening it up to more stringent domestic oversight.

Google is concerned that the legislation will prevent it from promoting businesses that it owns, such as its travel and hospitality comparison services, on its search results pages, a practice known as “self-preferencing”.

This could force Google to “change the design of general search pages fundamentally”, said Thomas Hoppner, at the law firm Hausfeld.

The sense of urgency at Google has been compounded by a significant legal defeat late last year when the General Court in Luxembourg upheld a €2.42bn antitrust fine against the company for promoting its own shopping comparison service above its rivals in search results.

In the weeks after the judgment, Sundar Pichai, chief executive of Google’s parent company Alphabet, discussed the case and upcoming tech regulations with Margrethe Vestager, the EU’s digital and competition chief, in a virtual meeting.

Separately, Kent Walker, Alphabet’s head of global affairs, held similar meetings with other high-level regulators, including Vera Jourova, the EU’s vice-president.

Thomas Vinje, legal counsel at FairSearch, said the court ruling and DMA were a threat to Google because “its very business model depends upon disadvantaging competitors and advantaging its own services in its search results”.

While it made some tweaks after the initial 2017 fine, Google has yet to implement any further changes to its search pages in light of the Luxembourg ruling, which it is expected to appeal against.

Separately, Google is concerned about a proposed EU ban on targeted advertising being pushed by one bloc of MEPs, though the common position currently falls short of a full ban.

“The MEPs’ position on targeted ads is crazy,” said one person close to Google, adding that such a ban would lead to more pop-up windows asking for consent.

According to the EU’s transparency register, Google invested about €6 million in lobbying-related activities in 2020 and it has roughly eight in-house lobbyists in Brussels, as well as retaining external lawyers and consultants. Last year, it was forced to apologise to Thierry Breton, the EU commissioner who is also responsible for digital regulation, after it emerged Google was orchestrating a plan to “push back” against him.

The intense lobbying may not have its intended effect. “They are the bad guys at the moment,” said a parliamentary assistant involved in the DMA discussions. “Everything coming from them is a bit awkward and hard to justify why we would include it in the legislation.”

Andreas Schwab, the MEP leading the DMA debate in parliament and a prominent longtime critic of Google, said the company’s efforts were “a little too late” to have a major impact.

“I get a sense they are worried,” said Schwab, who met Google’s Walker a few weeks ago. “And they should be.”

Google said: “We think people in Europe should be able to enjoy the best services that Google can build. It’s clear some of the proposals in the DMA and DSA [Digital Services Act] affect us directly and will have an impact on how we innovate our products in Europe. We care about getting the balance right, and we know our users and customers care too. Like many others, we’ve engaged openly and constructively with policymakers throughout the legislative process to put across our point of view.” – Copyright The Financial Times Limited 2022

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