Tech giants lobbying EU for more favourable regulations

According to members of the EU initiative and related sources, U.S. technology companies are lobbying the EU to make upcoming regulations more tech-friendly.

Just this week, technology companies reportedly attempted to utilize the Climate Neutral Data Centre Pact as leverage to influence the decisions of EU lawmakers. The Pact is a voluntary association of data centre and technology industry leaders, in alignment with the European Green Deal. So how can a voluntary organization be used as a lobbying chip?

One of the managers of an EU member organization told Politico (under the condition of anonymity) that ‘the Americans’ have ‘an upper hand’ in the pact’s activities. “It’s never really said, but their objective is to unite the actors of the industry and to be able to speak on its behalf.”

And as the membership of organizations included in the Pact are increasingly influenced by the U.S tech giants, they are marshaling their resources to influence EU regulations. For example, when EU regulators were scheduled to review key climate legislation, the Pact set up a working group to coordinate positions to negotiate terms on behalf of technology and data centre companies.

This approach was unexpected, according to the anonymous manager quoted above. “We were quite surprised because there was a real positioning, a real political strategy that was being put in place,” specifically for negotiations related to the Energy Efficiency Directive.

Lobbying spend

Leveraging their leadership position in the Pact isn’t the only way that U.S. technology giants are looking to influence EU lawmaking, however. A recent report using data from the EU Transparency Register shows that from late 2020 through 2021, many U.S.-based technology corporations dramatically increased money spent on lobbying EU regulators.

For example, for the 12-month period ending September 2021, Apple spent more than €7 million. In the previous comparable time period, it spent €3.7 million. The company also increased the number of full-time lobbyists it employs from 4.5 to 7.2.

The Financial Times reported that U.S. government regulators are joining in these efforts, attempting to lobby for tech-friendly regulations in the EU. In a letter forwarded to the FT, a senior U.S. government official said, “We ask that the EU use scoping criteria that do not discriminate against US firms in law or in fact, including by ensuring that meaningful European and foreign competitors of covered U.S. firms be brought within the ambit of the DMA,” referring to the Digital Markets Act.

Big Tech is unable to generate the same scope of influence in the EU as it has in the U.S.

The European Commission has put forth a scope for the DMA that would affect businesses worth €65 billion or more – ensuring that tech giants like Meta, Google and Apple would be well within the purview of the legislation.

The U.S. Department of Commerce officials have requested that these corporations be given considerations as far as intellectual property and security concerns must be protected.

Andreas Schwab, the EU parliament member responsible for leading DMA negotiations, responded with his own concern – that these arguments are being used as a smoke screen to protect the power that is centralized within tech giants. “As policymakers we have also to make sure that such concerns are not artificially created to hide behind,” he writes.

However, some political scholars believe that regardless of the effort and resources devoted to influencing EU regulators, U.S. tech companies have largely been unsuccessful. According to a recent study, Big Tech is unable to generate the same scope of influence in the EU as it has in the U.S. simply because these companies only have status as major employers and investors in a few of the smaller EU member states. Through this lens, it would seem that instead of becoming more tech-friendly in legislation, the EU is actually adopting “an approach that makes it easier for regulators to impose regulatory constraints on Big Tech compared to traditional competition law.”

“It is also likely that the legislative process will conclude with a strengthening of the possible sanctions contained in the draft proposal, rather than any watering down.”