Tech rivalries spill into Washington

Tech rivalries spill into Washington
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The rivalries between major technology and internet companies are increasingly playing out in the nation’s capital.

Alliances between Silicon Valley powerhouses and their cousins in Seattle are constantly forming and breaking apart, with big names often coming down on the opposite side of policy and legislative debates.

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The result is that the “tech lobby” is far from monolithic, with big names in the industry often at odds with one another.

“The funniest thing is the myth that tech has been monolithically unified and has never had differences, that tech is one big happy family and they agree on issues and they have each other’s back in lobbying — you mess with one and you mess with all,” said Bruce Mehlman of Mehlman Castagnetti Rosen & Thomas.

“The tech industry in Washington is as quarrelsome and divided and eager to mess with each other as they are in Silicon Valley and the marketplace,” he said.

To be sure, power struggles among technology
companies are not new. In the 1990s, Oracle and various internet service providers questioned the size and power of Microsoft in a years-long antitrust battle. The Justice Department then followed suit.

But the size, diversity, influence and earnings of the tech sector have only grown since then, which has raised the stakes.

“I think they don’t trust each other, the big [companies],” said one tech lobbyist. “[It’s like] two swimmers see a shark and one swimmer says to the other one, ‘We have to swim faster,’ and the other one says, ‘No, I just have to swim faster than you.’ ”

The diverging interests of tech companies were on stark display in recent weeks as the Federal Communications Commission debated the future of net neutrality rules and Congress considered a bill to fight online sex trafficking.

The sex trafficking bill, known as the Stop Enabling Sex Traffickers Act (SESTA), put the industry’s differences on full display.

Congress overwhelmingly approved the legislation, which Google, Facebook and other internet companies had warned undermines the freedom of the internet and opens up companies to a wave of lawsuits. SESTA makes internet platforms liable for the content on their sites.

But the legislation received enthusiastic support from companies that produce media content, including 21st Century Fox, and tech industry players that would largely be unaffected by the rules, such as Oracle and IBM. It was viewed by some as a proxy battle against the internet giants.

“You’re not going to take a big company by going at them head on, but you can take them on different sides,” one source in the tech industry said.

The latest controversy over privacy, sparked by Cambridge Analytica’s use of Facebook data, has sparked a new round of infighting.

Apple CEO Tim Cook has disparaged Facebook, saying what the social media company does is “an invasion of privacy.”

Facebook founder Mark ZuckerbergMark Elliot ZuckerbergThe Hill's Morning Report — Trump showcases ICE ahead of midterm elections The Hill's Morning Report — Dems split on key issues but united against Trump How tech reached a breaking point with Infowars MORE hit back when asked about Cook’s comments, telling Vox his company is “not just serving rich people.” He also aligned himself with Amazon CEO Jeff Bezos, saying Facebook is among those that “work hard to charge you less and provide a free service.”

“One way to understand what’s happening right now is that it is Google, Facebook and Amazon against old tech, and Google, Facebook and Amazon against new tech,” said Barry Lynn, the executive director of the Open Markets Institute.

Both start-ups and established players have an interest in hitting at tech giants, trying “to do to Google, Facebook and Amazon what [the government] did to Microsoft” in the antitrust space, Lynn said. “If we didn’t have the Microsoft case in the ‘90s, we wouldn’t have Google, it would have been crushed.”

Other lobbyists said that smaller tech companies have a love-hate relationship with their larger counterparts, both admiring them and fearing what policy shifts in Washington might mean for them.

“There is a sense of, from the rest of the tech industry, ‘Why are we getting dragged into their swamp?’ ” said one Republican lobbyist with tech clients. “It’s kind of like the cool kids in school are now found out to be troublemakers. You want to be near them until you don’t.”

The tech industry is vast and includes software-makers, hardware manufacturers, internet-based companies, businesses that operate cloud services — which operate vast storage databases — and content platforms that all operate alongside each other and can have differing goals.

The scope is also becoming even larger, with companies in other sectors, such as banks, auto manufacturers and traditional retailers dabbling in the tech space.

Overall, companies such as Google and Facebook are different from other corporate sectors in the tech world — such as hardware manufacturers, software makers and others — in that the lion’s share of their revenue comes from advertising.

“If you’re a non-social media tech company, you’re both trying to escape the Facebook vortex and use it to your advantage. We make real products, real computers, stuff that people need, rather than social media that builds an advertising model based on people’s information,” the GOP lobbyist said. “The reputation of the industry is becoming so damaged lawmakers don’t want to distinguish” between them.

Despite the many divisions, the tech industry has been able to unite on some issues, most notably on immigration policy.

Companies across the tech space have pushed to preserve high-skilled visas and save the Deferred Action for Childhood Arrivals program, which protects certain immigrants illegally brought to the United States as children.

The industry could also unite if the push for new privacy standards gains momentum in Washington.

“If you want to see these people really lobby, slap a privacy set of standards on them to make them [comply] like everybody else,” another Republican lobbyist told The Hill. “A lot of these guys, while they’re lumped in the same boat, they’d be willing to cut each other’s throats if they had to.

“The one thing they care about more than anything else: Not being exposed or being held to a privacy set of standards.”