The greatest threat to startups is lack of momentum. For companies that make it over the startup hump, it’s competition. Once a tech company is big, innovation is often the biggest challenge. Once you get to be the size of Facebook, Google, and Apple, the biggest roadblocks to continued prosperity can be Washington DC and other governments. For this reason, many of the largest tech firms in the world spend hefty amounts of money on lobbyists to make sure that the actions of the US government do not deter them from heading down the paths they choose.
Facebook is the latest to hit the lobbying trail hard and heavy, bumping up their 2012 spend 196% over the previous year to $3.99 million. This is small compared to Google’s $16.48 million, up 70% year over year. For Apple’s part, they actually saw a decrease by 13% to land at a modest $2.26 million.
In the whole scheme of things, these budgets seem small compared to the massive amounts of revenue they generate each year, but lobbying rules are strict. It’s not something that you can just shovel money into and expect better results. The fact that they are spending these levels of money is indicative of what’s at stake. For example, Facebook dodged a major potential fine from the FTC over privacy issues in 2012 and Google’s magical escape from anti-trust charges this month were due in no small part to a strong lobbying presence.
For better or for worse, the lobbying system in Washington is one that allows companies to, in essence, buy the support of politicians. It’s considered a dirty technique but one that has become an essential (albeit unwanted at times) component of our governmental culture. Some are not as forgiving.
“Google and Facebook would have you believe that they are different from other corporations. They are not,” said John M. Simpson, director of Consumer Watchdog’s Privacy Project. “They are following the corrupt corporate tradition in Washington: buying what you want.”
Corruption in Washington DC – say it isn’t so! What do you think? Are these technology giants getting the equivalent of a free pass for their actions by being so heavily embedded in Washington through their lobbyists?
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“Capitol Hill” image courtesy of Shutterstock.