The Industry Agenda: Big Tech

RDP’s Industry Agenda series will explore how different industries seek to influence executive personnel decisions.

Introduction

“Big Tech” is a catch-all term that refers to a handful of companies that develop information technology products and have dominant market power in their economic sectors, such as online search, social media, e-commerce, or app distribution for a given operating system. The term generally refers to Microsoft, Apple, Google, Facebook, and Amazon, but can also contextually include firms like Uber and Lyft, Airbnb, Netflix, Palantir, and more. 

Over the last 20 years or so, these have become some of the most profitable and influential firms in American commerce. Their rise, however, has not come without severe costs. Big Tech’s monopolistic business model is shriveling local journalism (the Google/Facebook ad duopoly); demolishing local commerce and small businesses (the ad duopoly and Amazon’s retail market power); contributing immensely to far-right radicalization and the “epistemic crisis” of information through unregulated social media networks and suggestion algorithms; steadily encroaching on individual privacy through surveillance technology; generating dystopian labor conditions and offering insufficient pay for the gig workers replacing what were once middle-class professions; and more. 

Especially since 2017, both Democrats and Republicans have expressed interest in reining in the unconstrained power of Big Tech, though precisely what each part of the political spectrum considers to be its harm is often contentious and revealing. Some of the many recommended reforms can be accomplished with existing executive branch powers like, for example, the power to enforce antitrust and privacy law. However, Big Tech’s significant hiring spree of Obama-era officials — both to company jobs and a constellation of influence-peddling semi-independent organizations — leaves Big Tech with well-connected allies ready to coerce old friends and colleagues as necessary. Here is what you need to know about how Big Tech seeks to influence the Biden administration. 

What are the executive branch issues Big Tech cares about?

Antitrust: There is serious bipartisan interest in bringing antitrust lawsuits to break up the Big Tech companies, most especially Google, Facebook, Amazon, Microsoft, and Apple. Breaking up Google and Facebook would end their online advertising ad duopoly while separating Amazon’s in-house store, e-commerce marketplace, and shipping platform would prevent its drastic and unfair advantage over competitors. Separating Apple from its app store, similarly, would prevent it from charging “toll booth” fees for developers to even access iOS users. Though it is less central to the current anti-monopoly scrutiny of the tech industry, some have argued that the wide adoption of Microsoft’s Windows operating system in business and government settings enables it to disregard security concerns with drastic consequences. Federal antitrust enforcement is squarely in the purview of the executive branch, both through the Department of Justice Antitrust Division and the Federal Trade Commission, meaning we can expect Big Tech to care a lot about who is running these offices. If Big Tech can install its allies in the Department of Justice Antitrust Division and Federal Trade Commission, they can head off such lawsuits before they are ever filed, or at least stop the agencies from devoting the proper resources and effort needed to bring an effective case.

Privacy: The United States does not yet have a federal digital privacy law, but under its authorities to protect consumers against “unfair, deceptive, or abusive acts or practices” (UDAPP), the Federal Trade Commission has served as a de facto regulator of at least some privacy issues, such as the Cambridge Analytica hack. The public has generally found the FTC’s enforcement on such issues lacking — and this is linked to the strong professional incentive for FTC attorneys and commissioners to revolve out to Big Tech after their government service.

What agencies is Big Tech seeking to influence?

Through registered lobbying and subtler forms of pressure, the Big Tech sector is seeking to influence the Biden Administration’s personnel decisions to ensure they have allies in the agencies and offices whose policy decisions directly impact them. While the tech sector touches everything and will therefore be interested in nearly every policy area, Big Tech will particularly be looking to influence the following agencies:

• Department of Justice: The Department of Justice’s antitrust division can bring lawsuits to break up Big Tech companies, and is already enmeshed in a case against Google. Other elements within the DOJ can investigate and sue Big Tech over discriminatory practices, labor law violations, and more. 

• Federal Trade Commission: The FTC has the power to bring antitrust lawsuits, and it has also served as the de facto privacy regulator of Big Tech, using its consumer protection powers to investigate at least some privacy issues. 

• Department of Commerce: The hodge-podge of agencies under the Department of Commerce include the Patent and Trademark Office, whose intellectual-property protection powers matter immensely to Big Tech. It also includes the International Trade Administration, which will have a significant role in shaping trade policy that allows Big Tech to extend its monopolies across the globe. More generally, Commerce has often served as a go-between for the President and major industries, and Big Tech will certainly seek to exploit this with an industry-friendly former venture capitalist as the Secretary of Commerce.

• Office of the United States Trade Representative: The USTR under both Republican and Democratic administrations has long pushed corporate-friendly trade deals that have allowed big companies to skirt labor, environmental, and consumer regulation. Big Tech has poached several top officials from the USTR throughout the years in an effort to support existing trade policies and promote their monopolies around the globe. 

• Office of Science And Technology Policy: Though it lacks direct regulatory or policymaking power, the OSTP is the President’s chief advisory service on all science and technology-related issues. It thus wields considerable sway over the most powerful person on Earth’s thinking on tech-relevant issues. The Chief Technology Officer under Donald Trump also executed Trump’s initiative on artificial intelligence investment — future executive orders on technology-relevant issues may also be spearheaded by OSTP officials. 

• Department of Labor: The Department of Labor has the power to curb some of BigTech’s exploitative employment practices. Should gig economy workers for apps like Uber and Lyft become classified nationally as full employees, it could pose a mortal threat to the venture-backed, unprofitable companies. Moreover, white-collar tech workers have begun organizing for better treatment and an active say in their companies’ controversial practices, forcing firms like Google and Amazon to seek greater control over their workforces. 

• Department of Defense: Even outside of efforts led by tech moguls like Eric Schmidt and Peter Thiel to deliberately enmesh new companies into the military-industrial complex, traditional Big Tech companies stand to do major business with the Defense Department in cybersecurity, cloud computing, artificial intelligence, and more. The DOD’s Defense Innovation Board granted many Big Tech executives carte-blanche access to Defense’s inner workings and led these executives to inevitably recommend far more Defense contracts flow to their firms. 

• National Security Council: While actual government contracts flow through the Defense Department, the National Security Council is where the President’s top foreign policy aides strategize about national security priorities. Having an ally in these rooms helps any industry shape executive-branch priorities in ways lucrative to their firms. This extends to Big Tech, especially as cybersecurity emerges as an early foreign policy priority for the Biden administration.

• National Economic Council: Similar to the NSC, the NEC is a sort of “group huddle” in which the Cabinet Secretaries of departments focused on economic issues (Treasury, Labor, Commerce, etc.) deliberate about how to enact the President’s economic policy agenda. Any domestic industry has a natural interest in having an ally raise its issues at these meetings, including Big Tech.

• Department of the Treasury: Particularly as the Big Tech companies expand into financial services like payments, and try increasingly to enter the lending and cryptocurrency spaces, these firms have an interest in America’s chief Cabinet department focused on monetary and financial policy. Moreover, large swaths of the Treasury are focused on global taxation issues, and Big Tech firms are notorious and innovative actors in the world of booking taxes overseas to avoid domestic rates.

Source: Revolving Door Project Personnel Power Map.

What previous work experience should raise serious concerns about Biden’s nominees and appointees?

Beyond registered lobbying, there are a number of professional and personal activities that should raise concerns over individuals seeking to serve in an administration committed to reining in Big Tech.  These include:

• Working directly for a Big Tech firm or trade association in a policy facing role after previously working in a senior executive-branch position, especially a political appointment.

• Direct or indirect lobbying on behalf of a Big Tech firm or trade association, either under their direct employ or as a client at a lobbying firm.

• Working for a law firm frequently or currently hired by a Big Tech firm, especially to defend or advise the Big Tech firm on antitrust, privacy, or other politically relevant concerns.

• Either significantly investing personally in the technology sector (especially via venture capital) or advising those who do.

• Working for a think tank, philanthropy, or advocacy non-profit funded significantly by a Big Tech firm to work on Big Tech-relevant issues.

• Conducting academic research funded by a Big Tech firm, especially on topics relevant to that firm’s interests and which is flattering to the firm overall.

• Conducting professional fundraising by targeting and receiving funds from executives and firms in the technology sector.

What questions should nominees or appointees with recent connections to the tech industry be required to answer?

In order to ensure all potential conflicts of interest are disclosed, nominees and appointees should be required to answer the following questions and make these answers public:

• Have you ever been employed by any Big Tech firm, or had a Big Tech firm as a client for lobbying, consulting, legal, or other services? If so, name the firms.

• Have you ever had an equity stake in any Big Tech firm, especially those which you have advised or been employed by? If so, name the firms.

• Do you believe it is likely that any Big Tech companies that compensated you marketed their association with you to prospective investors?

• Have you ever provided policy, regulatory, or strategic advice to a Big Tech firm? If so, how were you compensated, and how much were you compensated? Which clients have you advised, and what was the content of your assistance?

• Have you ever invested personally in a Big Tech firm, or professionally advised investors in a Big Tech firm? If so, for how long did you have this financial or advisory relationship, and are the activities of the firms in which you or your associates invested relevant to the position for which you are now nominated or appointed?

• Have you ever advised or been employed by a non-profit organization substantially funded by a Big Tech firm, such as a think tank or advocacy organization? If so, were you compensated? Has this non-profit organization produced work relevant to the position for which you are now nominated? When did your employment by this organization end, and when did the organization stop marketing their association with you?

• Have you ever conducted research funded by a Big Tech firm, or investors in Big Tech firms? If so, was such research relevant to the position for which you are now nominated or appointed? Were you compensated by the firm(s) or investor(s)?

• If you have ever served in a professional fundraising role, have you raised funds from a Big Tech firm, or its major executives and/or financial backers?

• If you have answered “Yes” to any of the above questions, in what ways do you expect to govern or regulate on issues relevant to the firms with which you have a past association? Do you predict that these firms will materially benefit from your governance decisions?

• Will you commit now not to pursue nor accept employment, compensation, or other professional benefit from Big Tech firms after you leave this role? Regardless of your answer to the previous question, what do you predict you shall pursue professionally after your time in government service?

• Do you think an association with a former regulator or political actor helps a nascent firm convince investors that it is legitimate, law-abiding, and effective at lobbying?

Who are the Big Tech allies seeking administration jobs?

The following individuals with connections to the tech sector or with Big Tech-friendly views are among dozens who have been floated for top jobs in the administration. 

• Juan Arteaga: Juan Arteaga is a partner at Crowell & Moring, where he helped clear AT&T’s merger with Time Warner (after previously arguing against the company in a different antitrust case) and represented United Technologies in its acquisition of Rockwell Collins. He previously worked in Obama’s Department of Justice Antitrust Division where he failed to take action against an airline merger that the Machinists’ union specifically pleaded to block. Before joining the Obama Administration, he worked at Simpson Thatcher, where he defended JPMorgan Chase’s anti-competitive collusion with other banks to rig the LIBOR exchange benchmark.

• Susan Davies: After leaving the Obama Administration’s White House Counsel office, where her judicial nominations team appointed corporate lawyers to 71% of open judgeships, Susan Davies joined the conservative law firm Kirkland & Ellis. Former employer to Brett Kavanaugh, Robert Bork, Ken Starr, and Trump Attorney General William Barr, Kirkland & Ellis has been known as a holding pen for conservative lawyers between Republican Administrations. Trump’s Department of Justice was so full of Kirkland lawyers that one of the top officials joked, “our philosophy is that an agency can never be led by too many lawyers from Kirkland & Ellis.” The firm is also known for taking on notorious clients like Jeffrey Epstein and defending BP after the devastating Deepwater Horizon spill. Davies herself has defended Facebook and several other corporate clients who faced antitrust investigations. 

• Renata Hesse: Renata Hesse is an antitrust lawyer at Sullivan & Cromwell whose clients include Amazon (in its acquisition of Whole Foods), Google (in its effort to quash an anti-monopoly investigation in Texas, alongside then-lawyer Ted Cruz), and American Express. She served in Obama’s DOJ Antitrust Division as the Acting Assistant Attorney General for Antitrust where she approved several large mergers, including between Time-Warner Cable and Comcast, US Airways and American Airlines, Arcadian and Humana, and AT&T and T-Mobile. Prior to joining the Obama Administration, Hesse worked at Google’s go-to law firm Wilson Sonsini.

• Sofia Pfaffenroth: Sonia Pfaffenroth is an antitrust lawyer who most recently worked for Arnold & Porter defending pharmaceutical, fossil fuel, and mining companies. She has cycled between private law and the DOJ Antitrust Division, serving as the Deputy Assistant Attorney General and Deputy Assistant Attorney General for Operations, where she oversaw several major mergers and acquisitions.

• Terrell McSweeney: In the Obama Administration, Terrell McSweeny served as an FTC commissioner, where she approved several big pharma mergers, including for Pfizer, Actavis, and Abbott Labs. She is a longtime Biden ally, serving as his deputy chief of staff when he was in the Senate. McSweeny also worked as a Competition Policy counsel at the DOJ Antitrust Division and a domestic policy advisor to Biden during Obama’s first term. After leaving the FTC in 2018, McSweeny joined Covington & Burling, a law firm that advises large corporations on mergers and antitrust regulations.

• Steven Sunshine: Steven Sunshine was the Deputy Assistant Attorney General for Antitrust from 1993-1995. Since then he has worked in BigLaw for Shearman and Sterling, Cadwalader, Wickersham & Taft, and, since 2007, Skadden Arps. Throughout his law career, Sunshine has represented corporations in heavily consolidated industries, including Big Tech, pharmaceuticals, and telecommunications. 

• Jon Leibowitz: Jon Leibowitz is counsel at Davis Polk and a former Chairman of the FTC under Obama. During his time at the FTC, he oversaw significant revisions of horizontal merger guidelines and  permitted some of the most high-profile Big Tech mergers in recent history, such as Google’s acquisition of DoubleClick and Facebook’s acquisition of Instagram. He has revolved between government and the private sector over twenty years

• Howard Shelanski: Howard Shelanski was the Administrator of the Office of Information and Regulatory Affairs (OIRA) and the Director of the Bureau of Economics at the FTC between stints at Davis Polk, where he advises corporate clients on antitrust and competition issues. He is currently advising Facebook in the ongoing FTC antitrust suit.

• Dave Gelfand: David Gelfand is a longtime antitrust partner at BigLaw firm Cleary Gottlieb. He worked in the Antitrust Division as Deputy Assistant Attorney General for Litigation under the Obama Administration where he oversaw investigations and litigation in antitrust enforcement matters including the mergers of USAir/AA, Comcast/TWC, Halliburton/Baker Hughes, and General Electric/Electrolux. He most recently led Cleary in advising on the T-Mobile/Sprint merger, and his past clients include Google, Sanofi, and other merger-fueled corporations.  

• Debbie Feinstein Debbie Feinstein is a prominent antitrust lawyer at BigLaw firm Arnold & Porter and the former Director of the FTC’s Bureau of Competition. She has represented many corporate clients in front of the FTC and DOJ since returning to Arnold & Porter, including Google, AT&T, and multiple Big pharma, medical technology, and food corporations. During her tenure as Bureau of Competition director, the FTC largely abandoned attempts to block mergers outright, favoring consent orders, which she claimed were just as effective in maintaining competition. 

• Michael McFalls: Michael McFalls is an antitrust partner at Ropes & Gray who worked on multiple prominent merger cases including Covidien/Newport Instruments, Google/DoubleClick, and RJR/Brown & Williamson. He started his career at the FTC before joining Jones Day and later Ropes & Gray. 

• Cynthia Hogan: Cynthia Hogan is Apple’s top lobbyist, where she has defended the tech giant against claims its operations in China enabled human rights abuses. Before joining Apple, Hogan led the NFL’s public policy shop where she lobbied successfully against congressional oversight and regulation related to antitrust, domestic violence prevention, and gambling.

• David Plouffe: After serving as one of Obama’s top advisers, David Plouffe traded his insider government knowledge and connections for a high paying job in Uber’s lobbying shop, where he sought to “stop the taxi industry cartel” and attacked labor unions. 

This list will be continuously updated. Any additions made after initial publishing will include the date added.