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June 26, 2013 6:21 pm
Housed in one of the dozens of anonymous glass and steel office buildings ringing Brussels’ leafy Meeus Square, the European Privacy Association does not stand out.
When the EU set up its voluntary lobbying registry two years ago, the group appeared to wear its modesty on its sleeve, classifying itself as an independent think-tank with no ties to corporate interests. Its declared aim was simply to enhance the debate in Brussels about how to protect personal data that ends up on the internet.
But after a little-noticed official complaint at the EU register in May, the group was forced to come clean: the bulk of its financing came from US technology companies including Google, Facebook, Microsoft and Yahoo. It quietly changed its status in the register from think-tank to “in-house lobbying group”.
Aggressive lobbying tactics, including “astroturfing” – setting up what is essentially a fake grass-roots interest group – are commonplace in Washington, the capital of corporate lobbying. But in Brussels, which for decades has operated on more old-fashioned, backslapping collegiality, they are revolutionary.
As the EU sought to beef up data privacy protections for internet users over the past two years, the US tech companies fought back. They threw millions of euros into lobbying, hired dozens of former EU officials and national regulatory officials to do their bidding and put nearly every big influence-peddling company on a retainer.
In the process, the big operators of the new economy changed the game in Brussels. America’s aggressive, big-money brand of lobbying had come to the capital of Europe.
“I was in politics for 25 years before I got into this job and in those 25 years I have certainly spoken to a few lobbyists,” says Jacob Kohnstamm, head of the Article 29 Working Party, which represents EU privacy authorities. “But the amount of pressure and lobbying we are seeing now is unprecedented . . . [and] extremely aggressive.”
With recent revelations that the US’s National Security Agency has been systematically vacuuming up information on emails and telephone calls – targeting foreign nationals, potentially including Europeans – whose data flow through servers owned by American companies, those lobbying efforts have come under new scrutiny.
Last year the Obama administration lobbied the European Commission successfully to strip its new privacy legislation of language that could have protected EU citizens from the kind of snooping uncovered at US intelligence agencies.
At home, the tech companies portray themselves as defenders of their customers against government intrusion. But in Europe they have been working closely with Obama administration officials to weaken EU attempts to protect users’ data.
US officials acknowledge that when it comes to data privacy in Europe, they are frequently on the same side of the table as Google, Facebook and Microsoft. But they insist it is not a co-ordinated effort. Instead, it reflects the US corporate view that the American privacy model is less heavy-handed and less burdensome on technology companies.
“When we advocate for a particular type of privacy regulation, we’re advocating the Obama administration’s view on how we should deal with data privacy,” says William Kennard, the US ambassador to the EU and a former chairman of the Federal Communications Commission, the top US telecom regulator. “That view happens to be consistent with what a lot of companies agree with for the simple reason that we think our approach is more conducive to promoting investment and innovation in digital technology.”
None of the leading US tech companies would comment on the record about their lobbying efforts in Brussels. But executives said their efforts to influence policy makers on the risks of imposing strict privacy rules have little to do with US intelligence gathering. They insist they arise from concerns that the laws being drafted today could affect the way the entire internet works for decades to come.
“You would expect any tech company to actively participate in the discussion over the rules that will shape the future of our industry and the entire internet ecosystem,” says the privacy officer of a large US tech company.
For those in Brussels unaccustomed to the US approach to lobbying, the aggression has been an eye-opener.
“We are bombarded with emails and meeting requests by companies who want to water down the proposal,” says Josef Weidenholzer, an Austrian member of the European parliament who has been overseeing the data privacy legislation for the centre-left Socialists and Democrats in the chamber. “I had never experienced such lobbying in my life.”
According to the EU’s voluntary lobbying register, the largest US tech companies, including Google, Microsoft, Facebook, Yahoo, Apple and eBay, spent nearly €7m on lobbying in 2012. If added to the cash spent by other umbrella organisations of which they are members, such as the US Chamber of Commerce, the overall spend for the tech industry is probably more than €10m.
And some critics say even those estimates are too low, thanks to the lack of a rigorous, US-style lobbying disclosure regime. Amazon, for example, is not listed in the EU’s voluntary lobbying register. And the Alliance for Lobbying Transparency and Ethics Regulation, a group that fights for higher disclosure standards, noted in a report that eBay “claims to spend less than €50,000” – despite employing five lobbyists, two of whom are accredited to the European parliament. Lobbyists’ salaries are meant to be included in the overall calculation.
Compared with the amount the companies spend in Washington, these numbers are a pittance. In 2012, for instance, the same six tech groups shelled out $35m for lobbying the US federal government, according to the Centre for Responsive Politics in Washington.
But for Brussels, these figures put the US tech industry close to the top of the heap. Five years ago these same companies spent almost nothing on EU lobbying. “The old data protection directive dates to 1995. Google, Facebook, Twitter, you name it, didn’t exist then,” says a representative of another US company.
Now, their spending is on a par with energy and financial services groups, long viewed as the biggest lobbying spenders in Brussels. The increase has coincided with the data protection debate moving to the top of the EU’s legislative agenda.
“They have brought Washington-style campaigning infused with a lot of Silicon Valley money,” says Jan Philip Albrecht, a German MEP responsible for drafting the legislation’s report for the parliament’s Greens. “Many of us were not used to this.”
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The US companies reject accusations of being overly aggressive. In fact, much of their money spent in Brussels goes on organising low-key events such as seminars and forums intended to “educate” – a word commonly used by lobbyists to describe their campaign efforts – consumers and policy makers.
The European Privacy Association, for example, hosts a regular breakfast with EU lawmakers. Participants say recent topics have included why “profiling” – a company’s use of data provided by users to target them for advertising or other online services – is not as objectionable as the commission’s proposed legislation suggests and why user consent is not always needed online.
A big chunk of cash and time, however, has also been spent on directly lobbying MEPs with proposed amendments to the data privacy legislation. Campaigners for stronger privacy at lobbyplag.eu have accused several centre-right and liberal MEPs of copying word-for-word amendments drafted by US tech lobbyists. This partly explains why there has been a deluge of text changes in the proposed law, which now has more than 3,000 amendments. “It must be a record,” says an EU diplomat.
To facilitate US tech companies’ ability to penetrate Brussels’ complex legislative process, many have taken a page out of their US playbooks by hiring former MEPs, commission officials and national regulators to help them gain access.
Google’s head of EU policy is Antoine Aubert, a former policy manager in the commission’s directorate responsible for information and media. Facebook’s public policy director in Brussels is Erika Mann, a former German MEP. And Microsoft’s Europe privacy chief is Jean Gonié, a former legal counsel at the French data protection authority.
No one suggests anything illegal or even unethical about these efforts. Eduardo Ustaran, a privacy lawyer at Field Fisher Waterhouse said that despite its reputation for Byzantine complexity, the legislative process in Brussels has always been comparatively open. What is surprising to many in the EU capital, he said, is that US tech companies are simply better and more effective at taking advantage of that openness.
“US companies have learnt the trade of how to influence legislative and regulatory process in US for many years . . . lobbying in Washington is more than a hundred years old, here is more recent,” he says.
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Not all of the US corporate efforts have been unwelcome. Peter Hustinx, the European Data Protection Supervisor – an independent monitor of EU institutions’ data policies – says that while he believes they “have made a lot of false claims”, the US companies have helped EU legislators to be more focused in their regulatory efforts. “They have contributed to the debate by making the proposals less prescriptive and more focused on a risk-based approach, which means that only companies dealing with sensitive data will be impacted by the legislation,” says Mr Hustinx.
US companies also argue that their opponents – civil liberties groups and activists in favour of tighter privacy rules – have lobbied just as aggressively by pressurising MEPs and launching online campaigns on their social media platforms.
“Everyone likes accusing the American corporations of being evil but nobody seems to be looking at the other side of the story,” says a public affairs official of a Silicon Valley group. “NGOs have been lobbying as much as we have, pretending to be on the side of consumers. Actually they are just against innovation, which is what consumers love more than anything else.”
But Joe McNamee, director of European Digital Rights (EDRi), a group that promotes tighter privacy rules, disputes that they have been able to muster the same firepower as US tech groups. Mr McNamee occupies a unique position. EDRi used to be supported by Google when it campaigned for net neutrality. But when his group started lobbying on tougher privacy rights, it lost Google’s financial backing.
“Before people debated their case, they were open and tried to incorporate all views. This has changed with the arrival of the Silicon Valley guys and the data protection debate,” Mr McNamee says. “Lobbying in Brussels is never going to be the same after this whole data protection saga is over.”
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European parliament: MEPs make a U-turn on privacy laws
European outrage over widespread US surveillance of internet data risks derailing the lobbying efforts of leading American technology companies to soften the EU’s forthcoming privacy legislation.
Senior centre-right members of the European parliament, who had previously supported more limited privacy laws, have been forced to come out in favour of bolder data protection rules.
The U-turn by important figures in the European People’s party, the biggest political group in the parliament, comes as many MEPs fear that a stance too closely aligned with US tech groups could hurt them in next year’s EU-wide parliamentary elections.
“Many MEPs just realised that this is a topic of interest to voters, so some see the opportunity to gain a few votes by attacking a legislation that they know will hurt businesses in their home communities,” says the representative of a leading US tech group. “This will complicate the debate, for sure.”
Manfred Weber, vice-chairman of the EPP, was among the first to express disapproval at President Barack Obama’s comment that the covert spying programme, codenamed Prism, was only snooping emails and calls of foreigners.
“The discrimination in privacy rights is not acceptable,” says Mr Weber. “Unless the US can guarantee that they will protect Europeans’ data as much as that of Americans we will have to take concrete actions to protect our citizens.”
The change in mood is a blow for US tech groups, which had lobbied EU lawmakers successfully in parliament as well as member states in the European Council – both debated the proposal – to make the data protection legislation more “workable”.
Eduardo Ustaran, a privacy lawyer at Field Fisher Waterhouse, says that the US groups’ lobbying skills will help them to put the legislation back on track. “These guys are specialists at lobbying and obviously they have brought with them particular skills in terms of how to approach politicians, policy makers and regulators on specific issues that matter to them,” he adds.
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