Google’s Growth Markets Include Lobbying

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one can accuse Google of lacking ambition. So it
should come as no surprise that as the No. 1 Internet search provider
gets even bigger, it wants to widen its influence in the nation’s

To that end, Google spent $1.38 million on political lobbying during
the first quarter, according to company documents. That’s up 57% from
the year-earlier period.

Those numbers might have gone unnoticed if not for a handful of
critics who fear Google is becoming too dominant in its markets and is
seeking to become too influential in Washington, D.C.

Perhaps chief among those critics is John Simpson, a consumer
advocate at the nonprofit Consumer Watchdog.

Simpson says he would like to see the Justice Department launch a
broad antitrust investigation of Google.

He points to the company’s dominance in Internet search — it controls
around two-thirds of the U.S. market — as well as its foray into areas
such as e-books and mobile advertising, where he says it has "unfair"
advantages over rivals.

Meanwhile, Simpson has begun to cast a wary eye on what he sees as
Google’s increasingly aggressive attitude in the political arena.

"Google opened a Washington (D.C.) office a few years ago with a
one-man shop. Now they are one of the biggest high rollers as far as
lobbying goes," he said. "They have decided to play that K Street
lobbying game like any other corporate giant. It’s a high-stakes game
for them." D.C.’s K Street is home to many lobbyist and advocate groups.

Google, which would comment only via e-mail, counters that its
political spending is much ado about nothing. Executives say Google is
simply following a natural progression of contributing more money as the
company grows.

Google is on track to spend around $5 million on lobbying this year.
That would represent a 25% increase from 2009, when it spent $4.03
million. In 2008, it spent $2.84 million.

That kind of money adds up to pocket change when compared with the
really high rollers in Washington. ExxonMobil doled out $27.4 million on
lobbying in 2009, according to data on Pfizer spent $24.6 million.

Started In 2006

Among companies with a tech connection, Verizon
was No. 1, at $17.8 million.

But Google’s come a long way fast in D.C. It opened its Washington
lobbying office in 2006, says spokeswoman Mistique Cano. That year the
company spent $800,000 on lobbying, according to tracker

Google is tight-lipped about what the company hopes to accomplish
with its lobbying money. In an e-mail response to questions, Cano said
most of Google’s policy focus is designed to "encourage innovation, keep
the Internet open, and build bridges between creators and users."

The company’s strategy, she said, is built around helping Washington
understand that Google’s business is "a worthy investment."

"The Internet is a big part of our lives," Cano said. "It’s also a
bigger part of the debate in Washington. From fighting censorship to
keeping the Internet open, we’re glad to be part of the conversation and
giving voice to our users and the broader Internet community."

Google backs the Federal Communication Commission’s proposed network
neutrality rules, which would require that broadband providers give
equal treatment to all Internet traffic flowing over their networks.

Big phone and cable TV companies, such as Verizon, oppose the
proposed rules. But Google and other Internet companies say they’re
needed to prevent Internet access providers from favoring or
discriminating against Web sites and services.

Rising Power Worries Watchdog

Google also supports the FCC’s national broadband plan, which seeks
to bring affordable high-speed Internet access to all Americans.

Meanwhile, the company’s problems with censorship in China have
prompted it to lobby for legislation that would prevent U.S. tech firms
from cooperating with nations that restrict free speech.

As for the antitrust issues: Company executives would not comment
about accusations that Google’s size, market dominance and business
practices give it an unfair advantage over rivals.

But Consumer Watchdog’s Simpson is not shy about sharing his

"Because of its dominance in the search market, Google is essentially
the gateway to the Internet for most consumers," he said. "What Google
decides to do really controls what consumers see and experience when
they go to the Internet. That carries a tremendous amount of economic

One potential remedy, he says, is to break Google up in much the same
way AT&T was broken up in the 1980s. Under
this scenario, Google’s Gmail and YouTube units, for example, would
become separate companies.

If nothing else, Simpson says, Google’s market dominance "warrants a
full-blown investigation from the antitrust division of the Justice
Department. That’s what happened with Microsoft. And we’ll see a similar
situation emerging with Google."

Gary Reback, a Silicon Valley antitrust lawyer, spearheaded the
effort to go after Microsoft in the 1990s. He doesn’t know specifics
about Google’s efforts to avoid an antitrust investigation. But he has
an idea of how companies facing an investigation might proceed.

"What you can do generally is you might go to a Congressman or
Senator, and if necessary make a campaign contribution," he said. "You
can have them lean on Justice, or the administration. It’s the same
thing pharmas try to do to avoid having drug prices put into the health
care bill."

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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