How Amazon is winning influence in Washington(Read article summary)
Politico examines some of Amazon's politically savvy moves, including hiring additional lobbyists, writing more checks to Congress, and the purchase of The Washington Post by CEO Jeff Bezos.
From books, bedding, and beauty products to electronics and media, including the popular Kindle e-reader and new Fire phone, Amazon is the king of retail.
Now, according to a fascinating new report by Politico, it’s working to become one of the kings of Washington, D.C.
The Seattle-based mega-online retailer is quietly working the Washington scene to build influence and allies in government necessary to support its growing ambitions in business.
Among its recent political plays, according to Politico: Amazon hired a bevy of new lobbyists, including a “powerhouse firm” to lobby the Federal Aviation Administration on delivery drones; wrote more and bigger checks to members of Congress; fought to win a critical government technology contract; successfully convinced government to allow limited US Postal Service Sunday deliveries; and famously raised its profile with Amazon CEO Jeff Bezos’ personal purchase of the Washington Post.
“The online retailer’s power plays reveal how a company once on the periphery of politics and policy is coming of age in Washington as it expands into new lines of business that draw scrutiny from federal agencies – and require a much higher level of influence and engagement in the capital,” Politico reported.
“Everybody knows Amazon’s size and power in retail is enormous, so it really should be no surprise their political influence is, too,” Sheila Krumholz, executive director of the Center for Responsive Politics, told the online political site. “They don’t seem hesitant to use all the opportunities they have at their disposal."
Amazon has utilized creative tactics in the retail world, largely to its merit – think its current battle with Hachette over e-book prices, or its implicit success in battling Apple over alleged e-book price-fixing without ever publicly taking on the Cupertino company.
It appears those aggressive and clever tactics have translated well to the political world. This June it hired the influential lobbying firm Akin Gump Strauss Hauer & Feld to lobby the Federal Aviation Administration on its delivery drone interests. The next month, the firm urged the FAA to grant Amazon permission to test its unmanned delivery drones, calling it a critical component of Amazon’s “continuing innovation” in the US, according to Politico’s report.
This coincided with a well-publicized “60 Minutes” appearance Amazon leveraged to gain support and publicity for its new technology. That appearance drew Amazon wide interest and anticipation for its new delivery drones.
Amazon has also used its influence to aggressively fight a potential lawsuit from the Federal Trade Commission, which accused the online company of allowing kids to rack up big bills in its app store. Among the company’s tactics: it pre-emptively released details of the lawsuit, warned the FTC chairwoman it would fight in court, and garnered support in the Senate, with a promise from at least one Nebraska Senator to blast the FTC’s suit.
That’s not all. “Amazon muscled its way into a major, $600 million cloud computing deal with the CIA,” Politico reported, reportedly protesting in court to prevent its competitor, IBM, from winning the bid.
The mega-retailer’s growing list of lobbyists includes former Sens. Trent Lott (R) of Miss. and John Breaux (D) of Louisiana. It also purchased new office space near the Capitol, which it’s working to fill with more lobbyists and top players from both Washington and the technology world who can advance Amazon’s interests.
Amazon is also opening its political pocketbook, albeit still relatively modestly. “Its political action committee donated $174,000 to members of Congress ahead of the 2014 midterm elections, and the company racked up around $1.9 million in lobbying expenses during the first half of the year,” Politico revealed.
That’s not counting the personal donations CEO Bezos has made to members of Congress, including Sen. Patty Murray (D) of Washington and to PACs.
Why the political buildup?
The bulking-up in Washington hints not only at Amazon’s growing influence but also forthcoming plans for which it will need Washington’s backing – plans which may test Washington regulation or seek support in realms including data, privacy, or antitrust laws.
Amazon may also be working to build allies in government for future battles with competitors over pricing, market dominance, or even taxation, a battle it successfully fought and won in the past – and which has reaped it handsome rewards.
It may also serve to send a message about Amazon’s growing clout to its competitors in the retail world, including publishers like Hachette, with which Amazon is currently locked in a tense standoff over e-book prices.
Still, Amazon is not alone in working to build allies and influence in Washington. Consider Google, Facebook, and Microsoft, each of which has spent millions – in lobbying, political donations, and more – to serve their interests.
As the Verge reported earlier this year, ten of the largest technology companies in the US spent more than $61 million lobbying Washington in 2013, according to an analysis of records filed by Consumer Watchdog earlier this week.
Among the top-spending firms were Apple, Google, Microsoft, and Facebook. And their top issues: privacy, data, security, and advertising.
“They’re very smart,” said Kim Rueben, senior fellow at the Tax Policy Center. “They understand and recognize the power they have.”
Still, it will be interesting to see how Amazon, known as a fierce fighter in retail, behaves in Washington. The company’s tough, bare-knuckle style may – or may not – play well in government.
Husna Haq is a Monitor correspondent.