Hark! A New Trade Group is Born

BNA reports on the formation of the Internet Association, a new trade group that will represent Google, Facebook, eBay, and Amazon. The group introduces itself as, "the unified voice of the Internet economy, representing the interests of America's leading Internet companies and their global community of users. The Internet Association is dedicated to advancing public policy solutions to strengthen and protect an open, innovative and free Internet. "

I do not know what the Internet Association will do nor do I discuss its merits here (as it has no track record yet). I wish to use this as an opportunity to discuss some of the issues in trade group lobbying. Consumer groups have problems too, but unlike companies, consumers have no direct representation in most regulatory matters, and consumer groups are completely outgunned in money, influence, and manpower in DC.

The creation of a new lobbying group for tech interests is a notable thing. These organizations are always created for some strategic reason. It could be that the many existing trade organizations are too closely aligned with other tech companies with dissimilar interests. Here, the Internet Association makes a big deal about being the first group to explicitly represent the interests of the Internet, whatever that means. Or perhaps it was created because other organizations have become too discredited to be believed anymore. When firms' sock puppets are discredited, they can simply be abandoned, and rise again (sometimes with the exact same employees) in new form. This is a lot like Unbranding.

There are already tons of tech lobby groups. Companies find them useful because they can launder policy through them. The groups can say controversial things, or engage in sock puppetry with reasonable deniability. So when you read a news article about some controversy, and see a trade organization quoted instead of a company directly involved in the tussle, chances are that the company decided to participate in the fray through its proxy and avoid the risk of direct exposure to critical reporting. Reporters do not kick the tires too hard on these groups to see who is actually behind them.

The Lobbying Clone Wars

Generally speaking, we too easily recognize these groups as legitimate. Federal agencies, for instance, recognize them and take them as seriously as ordinary principals in debates. This is problematic, because firms use these groups to amplify their interests. So, for instance, on Congressional hearings or FTC events, sometimes you'll see company representatives appearing on a panel along with witnesses from trade organizations that the company underwrites. Similarly, in the current debate at the Department of Commerce over privacy, the agency is going to try to develop a "consensus." Those wanting to influence that consensus will be far more effective if they multiply their presence in the room with additional lobbyists who appear to be independent but really are fully backed by specific companies.

“The Internet must have a voice in Washington.”

Turning back to the Internet Association, a few things to note for future reference. First, their PR firm is HDMK. That's important to know because closely related groups often share the same PR firm. If you see two groups with the same PR firm, chances are they have coordinated their messages, or they are really just the same interest broadcasting through two different speakers.

Second, the Internet Association is interesting because it explicitly claims to represent users. It will represent, "the interests of America's leading Internet companies and their global community of users."

This could be a great source of legitimacy problems for this group, because user interests so often diverge from the interests of Google, Facebook, Amazon, eBay, and the like. These companies tend to think that user interests align with their own because consumers would simply choose other services if they were in misalignment. It's a form of circular reasoning that many businesses suffer from.

Of course, consumers use what is available to them, and the market often obscures or blocks options that users are likely to take. For instance, in Douglas Edwards' recent book [FN1] about working at Google, he discussed the company's first-party cookie policy:

What if we [Google] let users opt out of accepting our cookies altogether? I liked that idea, but Marissa [Mayer] raised an interesting point. We would clearly want to set the default as “accept Google’s cookies.” If we fully explained what that meant to most users, however, they would probably prefer not to accept our cookie. So our default setting would go against users’ wishes. Some people might call that evil, and evil made Marissa uncomfortable. She was disturbed that our current cookie-setting practices made the argument a reasonable one. She agreed that at the very least we should have a page telling users how they could delete their cookies, whether set by Google or by some other website.

Even when companies know that consumers want more privacy, firms can have incentives to code in privacy-invasive options by default. Firms may also have incentives to hide the tussle among these options. Google could have implemented compromise approaches that preserved some privacy, by using session cookies or by choosing cookies that expired after some short amount of time, but it did not.

A similar theme appears in Katherine Losse's tale of employment at Facebook. According to Losse, when Facebook made major changes to users' privacy settings, there was no internal debate at the company about how users would feel about the changes. Losse was charged to write blog posts on behalf of Zuckerberg explaining the need of users to become more open.

It will be interesting to see how the Internet Association will represent user interests and the interests of companies such as Google and Facebook, when we know that these companies themselves make strategic decisions to shape, deny, or flat out commandeer users' choices.

FN1: Douglas Edwards, I’m Feeling Lucky: The Confessions of Google Employee Number 59, at 341 (HMH 2011).

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I agree with you wholeheartedly about the privacy issue. There is another important issue, however, and it's Net Neutrality. These companies are currently battling large internet provides such as Comcast over this issue. Internet providers would like to take a more active role in shaping and controlling the traffic that passes through their infrastructure.

For example, Comcast (among others) have argued that they should be able to extort companies such as Google and Facebook by throttling their users' bandwidth to those properties unless the companies pay the providers a fee. They would also like to throttle high-bandwidth applications such as video. This is clearly not in the best interest of the partners in this new lobbying group. Nor is it in the interest of consumers as a whole.

So while there is much here to be concerned about, there is also much to cheer. Let's hold our fire until we see what they actually do.

By Bruce Heerssen (not verified) on 04 Aug 2012 #permalink

I'd be curious to know what will happen when the interests of these major corporations collide. Google and Facebook have a vested interest in the open internet, but Facebook has a different vision of what that looks like (they won't let google crawl their pages for instance). Amazon and Google both have media-selling ventures, and so have a stake in the piracy/copyright game, but for google this seems more like a way to gather data about us than a way to make a lot of money, whereas it's one of Amazon's major cash-cows.

The major tech companies have been converging in terms of services offered for some time now, but their approaches are quite different. What happens when they're policy goals collide?

By Kevin Bonham (not verified) on 09 Aug 2012 #permalink