The big stick behind Google’s soft power approach to Europe
Google has not had an easy recent run in Brussels.
In early September, the competition commission threw back the search engine’s proposals to settle its long-running antitrust case. Then, the European Union’s incoming digital commissioner warned the company of increased scrutiny from regulators.High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/7f5c3052-3e5f-11e4-a620-00144feabdc0.html#ixzz3DfxGX9Q5
Before that, the European Union’s “right to be forgotten” left Google with the onerous task of removing search results if someone requested it.
Google goes to the people
Though Google has spent much time and money creating a soft power machine, the main approach used to influence public debate is to appeal over the heads of Europe’s leaders and make its pitch directly to consumers, writes Murad Ahmed.
These setbacks have come despite Google increasing its lobbying efforts and launching a charm offensive in Brussels and national capitals across Europe, as the US technology group wrestles with the reality of life as a $400bn company in an increasingly strictly regulated sector.
The company is believed to have more than doubled the amount it spends on lobbying the European Union since 2011. It spent roughly €1.5m in 2013, according to the European Transparency Register, a voluntary register that tracks what businesses spend on lobbying European institutions, an increase from the €600,000 it spent in 2011.
In the US, where rules on the disclosure are stricter, technology groups report far higher spending on lobbying. Google, for example, spent $8.85m in the first half of 2014 alone in the US – nearly four times what it said it spent lobbying the EU for the whole of 2013.
Google declined to comment on this article. But its efforts in Europe are part of its “soft power” approach towards influencing policy makers.
The Financial Times has spoken to several people with knowledge of how the company has built an operation worth tens of millions of dollars and focused on Brussels. It has learnt from peers, such as Microsoft, which waged its own battles with the EU in the 1990s and early 2000s and was fined a total of €2bn between 1993 and 2013. Where the Seattle group adopted an aggressive approach towards European regulators, Google has employed a “soft power” strategy using private lobbying, philanthropic initiatives and public events to try to influence policy makers.
“In Europe, the spectre of what happened to Microsoft is always in people’s mind at Google. They are the study of how not to do things,” said one insider. “Instead, a lot of time is spent behind closed doors talking to the right people.”
FT series
This was part four of a four-part series about the growing backlash against US technology companies.
Part one, about how Silicon Valley’s era of untrammelled global expansion is over, can be found here
Part two, about Germany leading Europe’s regulatory pushback, can be found here
Part three, about how the NSA scandal has led to a crackdown on online freedoms, can be found here
Jan Philipp Albrecht, a Green MEP from Germany who has campaigned vociferously on digital privacy and been a public critic of the company, agreed. “Google learned from these mistakes,” he said.
“The difference between Google and the others is that on a personal level they are very nice and reasonable. It makes them look a reasonable partner.”
According to two people familiar with the company’s operations, the company is able to open doors at the highest levels of European government, but the “direction of traffic” is not one-way. Politicians are often eager to associate themselves with Google, with lawmakers often requesting meetings with its executives rather than the other way round.
“You see this all round Europe and the US, in politics and opinion leadership. They travel to Silicon Valley, meet up with these companies,” said Mr Albrecht.
Politicians “want to be part of such a successful movement and gain some of their limelight and coolness.”
Politicians “want to be part of such a successful movement and gain some of their limelight and coolness.”
Others said the company has tried to build bridges with European countries by helping to fund philanthropic projects in line with the aims of government.
Podcast: Internet on a leash
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People familiar with the matter said Google’s cultural institute in Paris is one example. In 2010, Eric Schmidt, executive chairman, announced the company would create a venue in the French capital dedicated to “digital culture”, with an investment that would run into the “millions of dollars”, according to local media reports.
Its creation was partly in response to a declaration by Nicolas Sarkozy, then French president, that the government was considering an internet levy – dubbed the “Google tax” – to charge sites that generate income from content created by domestic media outlets.
Google executives believed the tax plan was unworkable, but they feared it was a dangerous escalation in rhetoric. One insider said the institute was a “gesture to show Google cared about French cultural values. It was to counteract the view that this was US imperialists out to crush French media groups.”
In December 2013, the centre was opened. But French politics had changed. The internet levy was never implemented but Mr Sarkozy had been replaced by the socialist François Hollande. His new culture minister, Aurélie Filippetti, who had promised to inaugurate the venue, cancelled at the last minute. “Despite the quality of the projects concerned, I don’t wish to appear as a guarantee for an operation that still raises a certain number of questions,” she said.
In the UK, Google has built Campus London, a hub for budding tech entrepreneurs. The centre was opened in March 2012 by George Osborne, Chancellor of the Exchequer, who hailed it as a project that could fulfil the UK government’s vision to turn the area’s budding start-up scene into the “technology centre of Europe”, a key government objective.
The company has previously rejected any suggestion that Campus is an effort receive favourable treatment by UK authorities, saying it is in line with Google’s corporate values of promoting entrepreneurship and innovation. It has also expanded the concept, building a Campus in Tel Aviv and planning similar spaces in Warsaw, São Paulo and Seoul.
In 2012, the company held its first “Big Tent” gathering in the UK, inviting high-profile figures to discuss sensitive issues such as internet privacy. In May 2013, Ed Miliband, leader of Britain’s Labour party, used the event to fiercely criticise the company for going to “extraordinary lengths to avoid paying its taxes”. Later, Mr Schmidt went on to the same stage and faced a lengthy grilling on the company’s tax policies.
One insider said events such as these epitomised Google’s strategy of engaging opponents to help contain their attacks. “It’s about inviting your critics . . . and have them criticise you from the platform. That helps to reduce the noise,” they said.
Though Google has spent much time and money creating a soft power machine, the main approach used to influence public debate is to appeal over the heads of Europe’s leaders and make its pitch directly to consumers, writes Murad Ahmed.
Unusually for a company that has made its multibillion-dollar fortune from digital advertising, Google has increasingly turned to tried-and-tested marketing platforms to boost its brand among the public.
According to figures compiled for the Financial Times by Nielsen, the research company, between August 2013 and July 2014, Google spent £40.4m on advertising in the UK alone. This is up from £12.8m over the same period between 2010 and 2011.
Of this, £30m was spent on “traditional” forms of advertising such as on billboards, cinema screens, newspapers and magazines. Just over 40 per cent of its total ad spend was on television, more than it spends on internet marketing.
Though Google pays attention to government scrutiny, greater emphasis is placed on public opinion. People familiar with Google’s soft power approach said it does not engage in typical corporate lobbying efforts to win specific concessions from European governments or favourable business policies. Instead, they described it as an effort to maintain the status quo, so that it can continue its operations unhindered.
One industry insider said: “It’s about what shifts the bottom line. Are people using Google less? Are they using Android less? No. One could argue that lobbying is an investment to keep a lid on everything, so that the brand and business can continue on its upward trajectory.”
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