A new report sheds light on the frenzied lobbying of European Union lawmakers as they finalize a major series of updates to the bloc's digital rulebook.
Some of the arguments used by tech giants to push their interests behind the scenes in a bid to change parts of the EU's Digital Markets Act are revealed.
The lobbying documents obtained by Corporate Europe Observatory and Global Witness show how tech giants have increased their spending on regional lobbying since the DSA was proposed.
It concludes with a series of recommendations for how policymakers can better protect the democratic process from corporate influence.
The report shows that Apple has increased its spending on EU lobbying from 3.5 million dollars in 2020 to 6 million dollars in 2021.
The EU lobbying budget for Facebook grew from 5M in 2020 to 6M in 2021. In 2020 the total outlay was 5.8M, and in the following year it was 6M. Amazon and Microsoft both increased their regional spending.
The Corporate Europe Observatory has an image.
The largest and most powerful platforms will be the only ones that will be affected by the DMA.
The pan-EU regulation is expected to come into force in October and aims to make digital markets more open and fair.
The DSA applies more broadly, setting rules for all sorts of digital services which are intended to harmonize online approaches to tackling illegal content and products. It touches on moderation, consumer protection and transparency. Tech giants will face additional DSA compliance hurdles because a subset of very large online platforms will be subject to additional oversight under the regulation.
The DSA is still pending, although a deal is expected after Friday's trilogue meeting, so the impact of big tech's lobbying on EU policymaking should become.
As EU lawmakers finalize the DSA and DMA, what have tech giants spent their millions on lobbying for?
There is a breakdown of their focus areas in the report.
Tech giants marshalled their millions to block an attempt to get a ban on tracking-based advertising into EU legislation, as one major target for Big Tech lobbyists.
They succeeded in that goal because an earlier push by some MEPs for a ban did not get the full backing of the parliament. The European Parliament voted to include limits on tracking ads into both the DSA and the DMA, as well as a ban on the use of sensitive categories of personal data.
The Council position was closer to the Commission's original proposal, which suggested ads transparency requirements, so tech giants sought to exploit this to try to water down restrictions on tracking ads.
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According to documents obtained for the report, during a series of high level meetings with the Commission, the adtech giant raised concerns about the European Parliament's proposals on advertising, suggesting limits on trackings.
This marked a continuation of the strategy of both Facebook and Google, which was to try to downplay the potential negative impacts of new digital regulations.
Lobby documents show that between January and the end of March, the Swedish government was in constant contact with the company, arguing against the proposal to ban advertising targeted at children. The DSA is not the right place to deal with these issues, according to the argument made by Google.
There is a special irony in this, given that the EU's ePrivacy rules explicitly cover tracking technologies like cookies. The Commission proposal was presented all the way back in January of last year. If the tech giant were to have its way there, it would not be appropriate for a legal forum to rein in its empire. That is funny!
EU lawmakers in the Council and Parliament were able to agree on limits to tracking ads.
At the moment of political agreement on the DMA, the position was announced.
At the time of writing the Commission is signalling that limits on targeting advertising will be included in the DSA, with internal market commissioner, Thierry Breton, including a ban on targeted advertising to children or based on sensitive data in a tweet storm.
Ban on targeted advertising for children
More #protection against targeted advertising aimed at children — or based on sensitive data.#DSA
April 22, 2022.
The political deal reached between EU co-legislators last month requires the DMA to get explicit consent from users to combine their personal data for advertising.
The French presidency of the Council said that they had agreed to include provisions to limit tracking ads in the DSA.
What did lobbyists do next? According to the report, the tech giant continued pushing against any limits on surveillance ads, but also evolved the lobbying tactic, by suggesting to Member States governments ways in which restrictions could be watered down in the final text to limit their impact on its ability to track and target.
The report states that on the day of the final DMA trilogue, the Swedish government was sent its thoughts by Google. New proposals regarding user consent to tracking and banning the use of sensitive data for advertising were opposed by the company. It was interesting to see that Google understood that there would be new limits to targeted advertising. The ban on targeting minor should be limited to known minor, and the use of individual profiling should be defined, according to the suggestions offered by Google.
The report states that the tech giant has been working on retooling its tracking apparatus for several years and that its fall back positions are no accident.
If EU lawmakers were to limit the definition of behavioral advertising, it would mean that it could simply circumvent any limits on its flavor of behavioral advertising by saying it does not target individuals.
Digging into Google’s push to freeze ePrivacy
A final text that would ban advertising to known minors would allow the company to claim it doesn't know the age of users who are not in its services.
According to the report, the lobbyists didn't stop there. They pushed back against proposals that would allow users to know the criteria used to target them specifically, including when ads were targeted at kids.
The report says that the documents show that they were not alone. Facebook and other European companies are trying to persuade national governments to oppose the Parliament's position.
Data access for NGOs and public scrutiny were targets for Big Tech tech lobbying.
The report details moves by Spotify and Google to limit how much access external researchers can gain to platform data, which is core to the DSA's ability to deliver on the goal of ramping up accountability around major platforms.
Civil society groups want the Commission to make it compulsory for them to give access to data on algorithmic content ranking systems to external researchers so they can study their function.
According to the report, the two companies have been pushing back against scrutiny of how their artificial intelligence ranks and recommends content to users.
The world's biggest music streaming service didn't want the transparency requirements to include detailed lists of parameters. The Parliament's last-minute introduction of exceptions to recommender transparency, including the protection of intellectual property and trade secrets, is one of the things it welcomes.
In March this year, Spotify added its comments regarding the latest compromise proposals on Recommender Systems. The company supported the evolution of the text regarding recommender transparency and welcomed a clarification in a Recital that these rules do not prejudice intellectual property rights and trade secrets.
Google was lobbying Member State governments to limit data access for public authorities. Europeans might have to wait for the next Pandemic to get external scrutiny of the recommender engine.
At the time of writing, it isn't clear where the DSA will end up.
Lobbying documents obtained for the report show that Google questioned whether non-profits should get data, in order to spread fear that this could put user data and privacy at risk.
The company asked national governments to oppose the Parliament's position and support the Council's mandate. The ways in which services like Youtube amplify or de-prioritise content nearly impossible would be scrutinized by external experts.
The report also shows that the platforms would have to make the information on the main parameters for recommender systems and the ability to opt-out from personalisation accessible from the content itself.
Privacy not a blocker for ‘meaningful’ research access to platform data, says report
According to documents obtained for the report, Apple, Amazon, and Facebook were all trying to modify the proposal during its last stage.
Apple brought its familiar argument against the moves to force it to open up its App Store and mobile OS, such as by allowing sideloading of apps or other types of interoperability, to discussion tables in the region.
The company's main argument was that increasing data access, sideloading and interoperability would reduce user privacy and security, according to the report.
Big Tech is trying to use a tactic called collective lobbying to get the EU to change the way it enforces laws such as the General Data Protection Regulation. The tactic is called Delay.
Per the report:
“[T]he top level message from the Big Tech companies to policy-makers regarding the DMA was the same across the board: Big Tech wanted to build a dialogue between the DMA’s regulator — the European Commission — and the companies covered by it — the gatekeepers, into the text and the regulatory approach.
“They brought this wish up consistently at the high level meetings, such as the December meeting between Google and [Margrethe] Vestager’s cabinet. There Google said that regarding the DMA their ‘core argument towards the Parliament was the need for regulatory dialogue and the opportunity to individually justify certain practices’. Google repeated the same message to Breton’s cabinet in January — ‘Proper regulatory dialogue is important to ensure the enforcement of the DMA’.
“On the very same day, Nick Clegg, Facebook’s head lobbyist, told Commissioner [Didier] Reynders, that for Facebook ‘it would be helpful to have the possibility of having a dialogue with regulators on questions concerning compliance’.
“Amazon, in turn, told the Swedish government that it was ‘more comfortable with content of the Council compromise proposal than with the European Parliament’s amendments.’ The company also raised concerns that specific measures had been moved from Article 6 to Article 5, which would mean they would be automatically applicable and not dependent on a regulatory dialogue.”
The whole point of the DMA is to bring in an ex ante competition regime for the bloc, via a set of dos and don'ts, that are supposed to apply up front for companies.
There is at least a small amount of wiggle room for obligations set out in the article. The regulation allows for a dialogue between the Commission and relevant companies over how to comply.
It sounds like it could be spun into delay heaven.
The main aim of Big Tech's lobby campaign against the DMA is to expand the dialogue as much as possible, with Corporate Europe Observatory noting that this is a key priority for Facebook. Lobbycontrol has argued that Big Tech's aim is to gain time and challenge the obligations of the DMA.
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The painstakingly slow regulatory dialogue, which Facebook and other tech giants have managed to establish with their lead EU privacy regulator, has been going on for a long time.
It is not clear how successful the tech giants have been in this area.
Consumer protection experts have observed that the Commission has made some concerning noises on the topic of DMA enforcement to anyone who wants to see regulators crack down on Big Tech.
I cannot believe that the Commission talks so lightly about #DMA enforcement… it’s the Commission’s kitchen; it will take time to implement; we don’t have resources etc. Seriously people? Why on earth did the legislator (and everybody else behind) work so hard to get this law?
— Agustin Reyna (@arcapde) March 31, 2022
The scope of regulatory dialogue in the DMA has been changed to allow the gatekeepers to initiate it. The Commission can decide whether or not to engage. We will have to wait and see how this plays out in practice, according to the report.
Some have raised concerns about a potential loophole in the DMA, which could see a history of failed GDPR enforcement against Big Tech being used by the self-same giants to avoid freshly inked obligations in the DMA. The Irish Council for Civil Liberties (ICCL) drew together signatures from a long list of competition and privacy experts to a letter that warns of a flaw in the latest DMA text.
The concern is that the consent for combining user data across multiple services into a single opt-in will make it harder for users to deny.
Let’s make sure, @Andreas_Schwab, 5(1)a #DMA closes the loophole for gatekeepers to combine data across all their many services and businesses whenever the user agrees to a single, all-embracing opt-in, undermining the very objectives of the DMA https://t.co/ZDDeEmb6K2
— Angela Mills Wade (@epc_angela) April 20, 2022
In the last few days, the parliament's rapporteur on the file has rejected the concern, suggesting that the DMA does not change the law. The consent requirement under the DMA builds on the consent requirement under the EU. The Commission will be in charge of enforcement, so there is no need to fear circumvention. No more forum shopping.
Unless the Commission acts quickly to provide guidance and bring cases, there will be a problem for effectively enforcing the DMA.
Collective concern is #GDPR is not enforced today. So indeed now falls on Commission to be very clear about how it will require #GDPR rules to be met in practice as part of #DMA compliance. There’s a major gap in enforcement to be filled, need guidance & cases soon @johnnyryan
— Cristina Caffarra (@Caffar3Cristina) April 20, 2022
Johnny Ryan warns that Gates will try to use the ambiguity to their advantage.
The Commission's legislative proposals are typically modified via a co-legislative process, which loops in the European Parliament and national government representatives.
There are multiple points at which lobbyists can try to influence EU policy.
The EU's executive body drafts and frames legislative proposals before moving on to the parliament, where they vote for amendments and set the parliament's negotiating position.
It is a lobbyists picnic.
US giants top tech industry’s $100M+ a year lobbying blitz in EU
The report states that the latter stage trilogue negotiations are problematic because they are conducted entirely behind closed doors.
“This process is one of the most secretive stages of EU policy-making, held entirely behind closed doors and with nearly no public access to the discussions. The EU Institutions have argued that this secrecy is needed in part to prevent lobbying pressure on the policy-makers.
“New lobby documents obtained from the European Commission and the Swedish government via freedom of information requests show that intense corporate lobbying is happening regardless of the lack of transparency.”
The report notes that the civil society groups were able to glean some information from the big tech lobbying around the DSA.
The documents they obtained showed that tech giants like Google continued to target the trilogue process even after the Council had agreed its negotiating positions, meaning they are shown trying to grasp a very last minute, non-transparent opportunity to favorably water down measures that could shrink.
The report authors say that corporate lobbying of EU capitals continues even after the Council agrees its positions.
The lobby documents show that during the month of January and the month of March, there was frequent contact between the Swedish government and the internet giant. During this period, the tech giant would send in analysis of the difference positions, adding the company's own analysis, and replicating the EU Institutional format of documents with four columns.
According to the report, Apple, Amazon, and Facebook were trying to influence the trilogues themselves, meaning they were trying to exert influence during the least transparent point of the co-leg.
They are reported to have used lobbying tactics.
Corporate Europe Observatory and Global Witness argue that the lack of transparency benefits big corporate lobbies and adds weight to the urgency of finally opening the trilogues process up to the public.
The Council has a say in EU policy-making. This is often referred to as the EU's black box, as it is difficult for citizens to know who is lobbying their national government on EU policies. They say that this approach and the fact that lobbying at member state level requires massive resources and good connections creates the conditions for corporate influence.
The report made a number of recommendations to protect EU policymaking against undue influence by the most well-resourced lobbyists, based on the tracking and analysis of the DSA and DMA process since the drafting stages.
It suggests publishing an up-to-date calendar of meetings, including summary agendas, and proactively publishing the four-column document, which details co-legislator positions and amendments, on a rolling basis.
Other recommendations include putting in place proper funding transparency requirements that mandate think tanks and other organizations to reveal their funding sources and establishing an independent ethics committee.
The authors of the report want EU officials and policymakers to be wary of those who lobby them, and they want them to check their funding sources and data sources.
They recommend that you don't attend or participate in events that are closed to the public or that don't disclose your sponsorship.
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