Your Undivided Attention - Tech's Big Money Campaign is Getting Pushback with Margaret O'Mara and Brody Mullins

Episode Date: August 26, 2024

Today, the tech industry is  the second-biggest lobbying power in Washington, DC, but that wasn’t true as recently as ten years ago. How did we get to this moment? And where could we be going next? On this episode of Your Undivided Attention, Tristan and Daniel sit down with historian Margaret O’Mara and journalist Brody Mullins to discuss how Silicon Valley has changed the nature of American lobbying. Your Undivided Attention is produced by the Center for Humane Technology. Follow us on Twitter: @HumaneTech_RECOMMENDED MEDIAThe Wolves of K Street: The Secret History of How Big Money Took Over Big Government - Brody’s book on the history of lobbying.The Code: Silicon Valley and the Remaking of America - Margaret’s book on the historical relationship between Silicon Valley and Capitol HillMore information on the Google antitrust rulingMore Information on KOSPAMore information on the SOPA/PIPA internet blackoutDetailed breakdown of Internet lobbying from Open Secrets RECOMMENDED YUA EPISODESU.S. Senators Grilled Social Media CEOs. Will Anything Change?Can We Govern AI? with Marietje SchaakeThe Race to Cooperation with David Sloan Wilson CORRECTION: Brody Mullins refers to AT&T as having a “hundred million dollar” lobbying budget in 2006 and 2007. While we couldn’t verify the size of their budget for lobbying, their actual lobbying spend was much less than this: $27.4m in 2006 and $16.5m in 2007, according to OpenSecrets. The views expressed by guests appearing on Center for Humane Technology’s podcast, Your Undivided Attention, are their own, and do not necessarily reflect the views of CHT. CHT does not support or oppose any candidate or party for election to public office 

Hey, everyone. This is Tristan. And this is Daniel. Before we start, we're gearing up for a new Ask Us Anything episode. If there are any questions you'd like to ask me, Aza, or Daniel, we want to hear from you. All you need to do is record your question on your phone and send it to Undividedat HumaneTech.com. That's Undivided at HumaneTech.com. Just recently, there have been two big developments in technology reform. The first is that the Senate passed. the Kids' Online Safety and Privacy Act

by a whopping 91 to 3 margin. And the second is that a U.S. Federal Court ruled that Google had an illegal monopoly in a huge win for the Justice Department. And of course, Google is going to fight the case very hard, just as social media companies will fight very hard to stop the full passage of KOSPA. But the most striking thing about this kind of reform is why has it taken this long for something to happen?

One of the big reasons for that is lobbying. The tech industry is now the second biggest lobbying power in Washington, but that wasn't true as recently as 10 years ago. So how did we get to this moment, and where could we be going next? That's the discussion we're going to have with our two incredible guests, Margaret O'Mara, who's a historian of the tech economy and author of The Code, Silicon Valley and the remaking of America. And also with us is Brody Mullins, a Pulitzer Prize-winning journalist,

formerly of the Wall Street Journal, who's recently published a book called The Wolves of K Street, The secret history of how big money took over big government, which he co-wrote with his brother, Luke. Margaret and Bertie, welcome to your undivided attention. Thank you for having us. Thanks for having us. Okay, so, Brody, I want to set up this conversation with a bit of historical context. There's so much in the press about lobbying and dark money,

people might forget or don't realize that lobbying actually has a long history in American politics, right? Yeah, you know, lobbying has been around for a number of years. In fact, one of the things I found interesting in researching for my book is that, the founding fathers envisioned a day in which there would be lobbying. They called lobbyist factions. They thought to be a pro-industry faction and a pro-worker or a consumer faction. But they thought those factions would be about the same size and strength. They sort of battle each other to an equilibrium to create laws and regulations that both sides supported. The problem that we've had that we documented in our book is in the last 50 years, companies have gotten

so powerful and spending so much money in Washington that they've really outflanked, out-gunned, gun to outspent the consumer side so that right now in Washington, big companies, particularly the tech companies, have all the power and influence over shaping our legislation, and the consumers, the rest of us, the little guy, have no influence. What changed over the last century in lobbying? Yeah, basically from the New Deal to the Great Society, companies actually had very little influence in Washington. Companies did not spend much money trying to influence public policy. Business was good. Profits were high. Companies were high. Companies, companies,

cared about their employees. And everything changed in 1970s. In the 1970s, the economy cratered. We had stagflation, we had inflation, oil prices, gas prices, quadrupled. And that really dragged the economy into the tank. And what business people did is they look around and said, hey, what's the problem, what's going on with our profits? Why is our business not doing well? And they saw the incredible growth of the federal government in the last 50, 60, 70 years had created so many rules and regulations that were required to comply with and spend money complying with. As a result, companies for the first time in the 1970s started investing in Washington. And when I say investing, I mean hiring lobbyists, making campaign donations. And from that

period until now, corporate America has been incredibly powerful in Washington, more powerful, as I say, than any other interest group in town. I believe it's a quote from your book that from 1967 to 2007, the number of registered lobbyists in Washington exploded from some five or six dozen to nearly 15,000. Is that right? Absolutely. Margaret, your thoughts? Yeah, I think that, you know, just as Brody said, lobbying has in some form been around since the founding of the Republic. There's always been people trying to persuade the legislature

and the president to do their bidding. The other thing that was happening in the 1970s or at the beginning of the 70s was that big business was not very popular. If you, you know, go to a college campus that's where students are mobilizing against the Vietnam War, they're also mobilizing against big business and defense contractors and any part of the establishment. And so part of this was also trying to make business great again and bring it back in favor

as a, you know, that American enterprise was core to the American project. So, yes, there's active lobbying on particular pieces of legislation, but there's also one of broader PR that is maybe Washington focused or policy focus, but spills out into something that everyone notices and sees. The public image of a company or an industry is something that plays a big role. and certainly that's played a big role in the story of tech. Yeah, I think that's really important, actually. It's so easy to look at lobbying

and just synonymize it with pure greed or pure influence peddling. And I think that's what's confusing about lobbying is it both kind of is an influence peddling game and it's also a public relations game. Yeah, to go back to make one point, again, a good detail here, is that in the 1970s or right before the 1970s, companies had so little influence in Washington

that General Motors found itself in a fight with Ralph Nader. And Ralph Nader was an individual consumer advocate who took on General Motors. This is the General Motors as in what's good for GM is good for the country. And Ralph Nader beat them on auto safety regulations. And what that shows, one is how much influence consumer groups

and Ralph Nader had in that period. But also how little influence companies had. I mean, General Motors got beat by a consumer group. And therefore, everything is switched after that. General Motors and other companies realized they needed to get in the game. Yeah. And Margaret, what was this?

Silicon Valley's relationship with D.C. and lawmakers during this period. Yeah. I mean, in some ways, Silicon Valley benefited from the broader sentiment against big business or old economy business in the 70s and even into the 80s. Not really a great time for the U.S. economy. This is part of the reason Ronald Reagan was elected promising morning in America and a really fundamental turnaround, which also included business deregulation. But for tech companies, while Republicans were certainly in the Reagan area, very clear champions of of business and a more deregulated business. The tech companies were something

that both Republicans and Democrats could get behind. This is the beginning of a more centrist Democratic Party with centrist leaders like eventually Bill Clinton and Al Gore, who were elected in 1992, but also many others in Congress of their generation. They're trying to signal that, hey, we care about American economy, too, and business flourishing as well. There was a real embrace of this tech industry

and where they didn't have to work very hard to, initially, to have organized lobbying efforts because lawmakers loved them. They thought they were great. Yeah, and, you know, Tristan and I were both in Silicon Valley and the aughts, which is a little later than what you're talking about. But I remember being there, and there was this mentality that said, you know, you really don't want to get caught up in the traditional games that all we needed to do was to build things. And the government was sort of too stuck or too captured or, you know, otherwise too corrupt to deal with it. One shouldn't play that game. You should just build great things. And then, you know, market, like, what was it that convinced Silicon Valley that they

really had to start paying attention to this lobbying game? The first moment that starts the mobilization is actually one that didn't happen in Silicon Valley itself and one that Silicon Valley interests were cheering, which is the U.S. government's antitrust lawsuit against Microsoft, which happened to the late 1990s, and it ended with a decision that ruled that the company had to be broken up. And for various technical reasons, it didn't actually. have to do that, but it did have to effectively slow its role significantly. And that moment was for Microsoft as a tech company, a real watershed, moving it from being pretty inattentive to anything that was going on in Washington at all. They were really truly heads down.

So Bill Gates famously, when the FTC brought a motion against Microsoft for predatory monopolistic behavior in 1994, Gates's famous reaction to that was like, eh, the worst thing it could happen to me, in Washington as I fall down the steps of FTC and die or something like that. It was kind of this old, old-style Bill Gates kind of brash, like, I just don't care about what they do. This has no bearing on our business. And what the DOJ lawsuit showed Microsoft, and then in turn showed the Valley later, they realize they can't blow off regulators, that antitrust is a real threat, and this is a constituency that needs to be worked with, and they can't just take that support for granted. So before the DOJ lawsuit, Microsoft's entire Washington lobbying operation was one guy working out of their Bethesda, Suburban Maryland sales office, and it was drive between suburban Maryland and Capitol Hill, and he was it.

And after the lawsuit, and after the DOJ decision, Microsoft starts building a fundamentally different and now what is perhaps one of the largest and most sophisticated and very successful lobbying operations in D.C. What I'm hearing is Microsoft was really a wake-up call for Silicon Valley. That's exactly right. And it's all happening at a really critical moment. In 2000 is the year of the DOJ ruling on Microsoft. It's also the year that Al Gore loses the presidential race to George W. Bush. And all of the people who had been working in the Clinton Gore administration, and I should say, full disclosure, I worked in the Clinton Gore administration. But in 2000, there were a lot of people who suddenly had been, including people who have been working very hard on. tech policy, particularly under Vice President Gore, who then go to the tech industry, go to the valley. So suddenly, just as companies like Google are starting to realize, okay, we need to, from the ground up, build these policy shops. And Facebook is also building a policy.

In the first decade of the 21st century, you have these companies as they're getting large are building these policy shops. And they're drawing in veterans of the Clinton administration, the George W. Bush administration, both Republicans and Democrats, veteran Hill. operatives and staff members, people who've already been lobbying in Washington for different industry sectors who are helping build that capacity. So this is a great point to jump off because all of this in the 90s and the early aughts were sort of a wake-up call to Silicon Valley, that they had to get serious about

traditional lobbying, right? And they did. I mean, over the aughts and the teens, you see this explosive growth in the size of the tech companies lobbying arms. And it wasn't just about avoiding regulation. It was, as you say, about educating the politicians about the stuff they were building. You know, famously you have Ted Stevens from Alaska calling the internet a series of tubes. And again, the internet is not something that you just dump something on. It's not a big truck. It's a series of tubes. And Silicon Valley goes like, whoa, you know, we got to fix that. You know, Brody, can you talk about that period in the, in the odds and the early teens, how lobbying both grew and changed at the start of the new millennium?

Yeah, no, I mean, that's exactly right. I think Microsoft is the real pivot point. And, you know, Bill Gates and Microsoft and the rest of Silicon Valley thought, They were the smartest people in the room, and they knew what they're, smart people in the country, you know, and they knew what they were doing, and Washington should just buzz off because people in D.C. don't know what they're talking about, and we focus on Google and the rise of Google's lobbying operation in D.C. is that when Google got started in Mountain View, they said in order to be the biggest, baddest company in the country, that unlike Microsoft, they need to embrace Washington because Washington they saw could be a potential roadblock in their growth. and therefore they started a lobbying office very early, and they had some stumbles at first. But they created the biggest lobbying operation, the biggest influence operation that Washington's ever seen, basically because they didn't want to be Microsoft.

But they weren't really trying to push forward legislation or really against much legislation. What really changed, in my opinion, is when AT&T and then SBC communications, the phone companies, started pushing net neutrality. And I think that came up in 2006, 2007. And what Net Neutrali would do, at least the version that AT&T was describing at the time, was, hey, we own all these lines. And you tech companies are freeloaders.

You're using our lines, our high-speed wires, our broadband networks that we spent billions and billions of dollars building. And you're using them for free. So you know what? We're going to charge you for them. And all of a sudden, Google said, whoa, you know, I don't know if that would have put them out of business, but would have fundamentally shifted the balance of power from the tech companies, you know, to AT&T, AT&T and Verizon and the cable companies who owned the networks. So all of a sudden, Google saw itself under fire.

And that was another key moment when they started investing in Washington. Because what they did is they looked around and said, okay, well, if we're facing off against AT&T, you know, what is AT&T done? And Google, who had been around, you know, in Washington for a couple of years, saw that AT&T has been lobbying Washington for a hundred years. And they had, you know, a hundred million dollar budget in D.C. And they were the biggest campaign contributor. and every single member of Congress knew the AT&T lobbying staff

because AT&T had employees in every district in the country. So all of a sudden, Google was facing off against a giant. And back then, it's hard to remember this, but Google was David and the Goliath was AT&T. And so that was another key moment when the tech industry realized that they needed to get in the game and fund donations and hire more lobbyists. Yeah, and I think this is such a fascinating moment being,

if you remember old cell phones from the flip phones in the early 2000s, it was Verizon's App Store versus AT&T's App Store. If you wanted a game, they were advertising that they had the best games. And so it really began to be the power of the traditional copper line companies versus the power of internet companies.

And the reason I focus on this is it really feels like at this stage, it becomes less about corporate interest versus individuals, but it becomes more about corporates fighting other corporates through lobbying. Yeah, you know, 100%. I mean, I've covered lobbying in Washington for 20 or 25 years.

And when I first started covering lobbying, I thought this is how it works. You know, Agency X creates regulation and proposes regulation for industry Y. Industry Y hires lobbyists to try to block or prevent or change that legislation or policy in a way that's more favorable or less damaging.

But in fact, you know, what you say is exactly right. I mean, companies are coming to Washington on the offense in order to create rules and regulations that help them and hurt their competitors. I mean, that's almost every fight that Google is in these days. Is Google, in an industry sense, going after the markets of other big companies like Rupert Murdoch and News Corp, like Hollywood, like the car industry, like every single industry that they try to get into, those entrenched lobbyists for their adversaries, you know, run to Washington and try to create rules and regulations to keep Google out. So so much of being a successful company, you know, unfortunately, this is just the way it is, in tech or elsewhere, it involves having a D.C. lobbying operation that can help you bend the rules to your favor.

just to build on that great point, it's, yeah, industry versus industry. And if we go back to the 1990s, another great industry industry example from that period is actually the Microsoft lawsuit, again, what mobilizes the antitrust lawsuit? Why is the DOJ convinced to do this? It's not because they were deeply looking at all of Microsoft's behavior in terms of bundling the browser in its in Microsoft Windows, which was the, that was the catalyst for this lawsuit. It was actually because Netscape and its venture investors and its lawyers and other allies in Silicon Valley were going to the Clinton administration and saying, you've got to do something about this. You've got to make that, this Nescape is getting eaten alive.

This new dot-com miracle is going to be nipped in the bud by what then was big tech. So there's a, you know, there's these, this is about jockeying for market position as well as a story of lawmaking and public policy. I wanted to turn in this next moment to talk about the evolution of the game of lobbying, because up until now, you know, companies doing traditional things, you know, walking around in the halls of Congress. And Brody in your book, you point out the way that the turf of lobbying was not just on Capitol Hill. You call this by different names, you know, shadow lobbying, influence peddling, the outside game.

Can you talk about that transformation? Yeah, I think when you talk about lobbying, most Americans think that lobbying is a game played by sort of insider relationships between lobbyists that are made through campaign donations and rounds of golf and steak dinners and, you know, the proverbial smoke-filled room that we used to hear about. And that type of lobbying absolutely existed, but doesn't really take place anymore. There's so much more scrutiny on lawmakers. There's tons of media organizations that are following what lawmakers are doing, including, reporters like myself who would love to write a story about a powerful lawmaker doing a favor for a friend in exchange for a campaign donation. So that type of thing just doesn't happen as much anymore. But what members of Congress do, I mean, my theory in covering Washington is that, you know,

the number one thing that a member of Congress needs to do is get reelected. In order to get reelected, you need 51% of your constituents. And lobbyists know that. So what lobbyists do now is less so run to members of Congress and try to get favors, but go to their constituents. I mean, And actually, Google has perfected this. If you can get 51% of a member of Congress's constituents to support a trade bill or an immigration bill or whatnot, the member of Congress will follow because they want to do what's going to get them reelected. And that's really how lobbying has changed. We call that moving from the inside game to the outside game. The growth of lobbying is not in the actual registered disclosed lobbyists.

It's all happening outside of Washington where the activities of lobbyists don't need to be disclosed. What are the mechanisms, if they're doing this outside game, and they're trying to go directly to constituencies and appeal for influence to people, not to the politicians, what are the ways in which they were able to do that? And I think, Brody, you talk about like SOPA-PIPA, the Stop Online Piracy Act and the Protect IP Act. Can you talk a little bit about the new ways that lobbyists try to appeal to the people? Yeah, well, that's a perfect setup because that's right where I was going to go. I mean, that's a key pivot point in both the creation or the rise of big tech overcoming agents. T&T and its opponents to becoming the most powerful influence machine in Washington, but also a key moment in this type of lobbying, moving from the inside game to the outside game. So this is back in

2010, 11, 12, I believe, the opponents of Google in the tech industry and saw the Silicon Valley disruptors coming for their industries, mainly Rupert Murdoch, you know, a big publisher and copyright owner, the pharmaceutical industry, the Chamber of Commerce, Hollywood, you know, all big owners of copyright saw the disruptive force that the tech industry could have for their industries and they came up with this bill called the Stop Online Privacy Act

and they had a similar bill in the house that would basically require tech platforms including Google to for the first time police some of the information and data and content that their users were putting on their platforms.

The bill really wouldn't have done that much. However, the tech industry and Google, you know, really freaked out about it. They thought it would, they just said it would kill the internet. It wouldn't have killed the internet, but either way, that's what they claimed. But more importantly, the bill on Capitol Hill had the support of at one point 99 out of 100 senators. It had a huge amount of support in the House. It was on its way to becoming law.

And Google and the tech industry looked around, and at the time, they weren't making campaign donations. They didn't have many friends on Capitol Hill. They didn't have a huge lobbying operation. And their opponents did. So Google didn't have the power to battle them in the traditional Washington marketplace. But when they realized they had something that no one else had, which was users. So on January 18th, 2012, I believe they started this campaign called the Shutdown the Internet Day. And thousands of websites, including Google, put little banners on their websites that said,

Congress is trying to shut down the Internet, you know, call your member of Congress, tell them not to support this bill. And in that day, and in the standard of a couple hours, millions of people called or texted or email they were members of Congress and said, you know, block this bill. What was amazing is that 24 hours after that campaign, the bill was dead. That this is a bill that had the support of 9-9 out of 100 senators. And one day later, it was dead. And that wasn't with campaign donations or lobbyists. It was using the people, using the American people to pressure Congress. So that was a real, you know, great example of another way that a company has gone outside of Washington to lobby. Margaret, tell us more about, like, did you see other of the tactics that people use?

Yeah, I think that, you know, what plays in has played in so well in tech's favor for a very long time, and really up to about, say, 2014, 15, even really before, up until the 2016 election, was the incredible goodwill that the tech companies had. Good press, really strong bipartisan support on the rare times that a tech CEO might be called, before or be talking to Congress, which was very rarely. It was very, you know, celebratory. There's one of my favorite instances of this was it about in 2013 or so, and Tim Cook was testifying, asked to testify in front of a congressional committee because Apple was not paying very much, if any, corporate taxes. And so he was being called to account on Apple's

behalf, the CEO of Apple. And while there was some kind of, you know, pointed questions, In the beginning, it kind of devolved into this love fest with people of both parties kind of holding up their iPhones and saying, I love my iPhone and you make such great products, but can't you just pay a little more taxes? It was just a great example of how members of both parties were like, we want to give these companies as much runway as possible. And that had been the attitude in D.C. since the 1990s. And in fact, had been critical in growing the Internet economy in the first place.

Things like Section 230, keeping the platforms. holding them harmless from what is posted in their platforms, net neutrality, all of these things that were working in the industry's favor that actually created this extraordinary growth. And a company like Google could go very effectively directly to its users because it had this really positive public image. And to this day, when there are surveys about, you know, what is your feeling about Amazon or Google or about these products, it's still overwhelmingly positive. And so that's something that the companies have used in these different types of lobbying and creating a space for growth and for their business priorities.

It was something that was very much mostly on question. Now, I think you get to the middle of the 20 teens, and that's starting to break apart. There are these moments of, hey, you guys are growing really, really big and really powerful. And then the 2016 elections, both Brexit and the presidential election in the United States, states occur. And that really is a turning point, taking this growing anxiety about social media in particular, but more broadly about what Silicon Valley is building and doing and everything that other platforms like Uber and Lyft and challenging the taxi business and Airbnb and hotels, all of these other legacy businesses and industries that software produced by the Valley, by this

industry, is starting to fundamentally disrupt, which is so different from anything that happens in the 20th century, right? Even with the dot-com boom, it was still something that sat on your desk and it was about communications and media. It wasn't about taxis. Yeah, it seems like there's the period where the internet is a website you go to

on your desktop computer versus software's eating the world and it's eating the physical infrastructure that you live by. Yeah, the other thing that is happening at the same time is the use of these networks for politics and as political tools. and something that really comes to a head in the 2008 election with the campaign of Barack Obama

who opens a Palo Alto field office very, very, very early and hires a bunch of Stanford students to staff it and was embracing the companies and the platforms quite early and using Facebook in particular in a way that was heralded as transformative as this new frontiers in democracy and truly bringing it back to the people. It was really kind of accepted at face value

that bringing people together on the Internet was just going to bring out best in humanity and forget about the worst in humanity. We were going to leave that all behind. And so I think that what we really see for much of the Obama era was this continuing kind of hopefulness and this very close alliance between the Obama White House, for example, and companies like Google and Facebook, literally with personnel moving back and forth between the two. And then the 2016 election becomes a really blunt reminder that bringing humanity online has its downsides as well, particularly in an electoral politics context, that really changes the

position of not just social media companies, but tech companies in particular from this kind of really had a golden ticket for a very long time politically. And then that starts turning quite quickly in an ugly way. Yes, so we've seen this wave of the public perception radically change on the tech industry across the last decade. And now we're seeing some real movement of bills. We're seeing, you know, President Trump signed bills that created Section 230 exemptions. Biden signed on on the TikTok sell-off.

And the Senate just passed the Kids Online Safety and Privacy Act. And the FTC has been, like, pretty aggressive with antitrust, bringing suits against meta and Amazon and Microsoft and Apple, and actually just won their case against Google. So what should we make of this? Are we seeing cracks in the armor in the traditional game? of lobbying here. Yeah, I mean, I definitely think that the tide is turning against tech, you know, as we've

been talking about. I mean, in recent years, Republicans and Democrats have used, you know, rhetoric to attack the companies and the lobbying might of the companies has blocked any effort to rein them in or to regulate them. But that's, you know, starting to change. There was bills in 2017 that became law on Section 230. You know, the one that I like to talk about is that there is a merger fee increase. two years ago, I believe, they would raise the amount of money that companies need to pay,

particularly tech companies, need to pay when they're merging. As in under the law, when two companies had emerged, they pay a certain fee. That fee goes to the Federal Trade Commission or the Justice Department to review those mergers. And Republicans and Democrats pass that into law. In fact, in the House, 39 House Republicans voted for that bill. What shocked me about that is that for my entire lifetime, for our entire lifetimes, the Republican Party has been with big business and against increasing the size of government. And here's an instance where 39 House Republicans voted to increase taxes essentially on companies

to give to federal bureaucrats to rein in corporate mergers. And that was really a response to their hatred for the tech industry. So there really is something changing in Washington these days. You know, some of this is tech-specific and some of this is kind of a life cycle thing. And a lot of, I think a really useful historical comp here is looking back to the turn of the 20th century when industries like steel and oil and railroads, which mind you, were the high-tech new economy industries of the day, right? They didn't exist a couple of decades prior, are suddenly have acquired such market dominance that they are the inspiration for the Sherman Act, the Antitrust Act, that now is the basis for the judicial ruling on Google, for example, that, you know, Part of this is, yes, this kind of falling out of love, I kind of, you know, when you're deeply, deeply in love with someone, it's kind of like a high school romance, and you break up and you really, really are upset with them. And I feel like there's a little bit of that dimension with Washington and Silicon Valley at the moment.

So one of the things that we think a lot about at the Center for Humane Technology, I mean, we have so many obvious issues with social media degrading the quality of discourse, causing addiction, doom scrolling, skyrocketing. skyrocketing mental health issues for youth, teen suicides, and we know the cause of it. We know that it's driven by this engagement-based business model, the monetization of our attention. And so given the sort of obviousness of this, one of the things that we've noticed is that you see tech companies saying, we're for regulation. We definitely need regulation. And they'll say that publicly. And then behind the scenes, they'll do every tactic possible to kind of block things. I was at Senator Schumer's AI Insight Forum in front of all the CEOs, You know, Jensen Huang and Eric Schmidt and Bill Gates, and everybody was there in one room, Zuckerberg, Elon, and Schumer opened the meeting by having people raise their hand if they agreed that the federal government should regulate AI.

Literally every single one in the CEO's hands went up. And yet the next day, all of their policy teams went to work saying, well, yeah, but not these kinds of regulations. We've seen META come out publicly in favor of Section 230 reform, for example, and other social media comes in who support kids' online safety. So I'm just curious, how are you seeing the companies evolve of their strategies in this sort of backroom opposition? Yeah, you know, it's a fascinating area because, unfortunately, you know, Congress is just so, they're so ill-equipped to passing any law on any topic at this point. And I think the tech companies and the AI companies are taking advantage of that. I mean, Facebook has realized Congress is dysfunctional. They're not going to pass a law.

So let's just say we support it and say, hey, you know, go for it. They've basically challenged Congress to regulate them, and Congress can't get its act together. Yeah, and this is not the first time in American history this has happened, you know, where industries say, oh, yeah, regulate us. But also there's, you know, it's a good reminder, too, that Silicon Valley is never, there are many Silicon Valley's, right? And every company and every part of the tech world has its own policy priorities, and they may not be in sync. You know, if you go back to the 1980s, the chipmakers and the PC makers didn't have policies in sync with one another. Chipmakers wanted to retain their market advantage. the PC makers wanted to have really cheap chips from Japan, so they didn't care if the market

was flooded. And we see the same thing playing out now. And yes, I think what Brody's point about the level of dysfunction, this again was pertinent in the Gilded Age. It's one reason he didn't have much business regulation coming out of the late 19th century either, when you are able to play on those partisan differences. And the fact that the two parties have different ways, different means towards the same end or have different priorities, even within something like social media regulation or privacy regulation. And so where the lead has been taken or where regulations come has come from other geographies, notably from Europe. So we hear this a lot, obviously, that Congress is dysfunctional. It's never going to pass anything. I just want to add to that

picture that there are deliberate ways that companies will so division about an issue so that it prevents action from being taken. The example that I'm most familiar with is Facebook turning the argument about what's wrong with Facebook into a question about whether it's free speech or censorship, because they know that that philosophical question literally will never resolve. There is no conversation that will ever say the answer is clearly one side or the other, and they, by doing so, distracted people's attention from their core business model, which is monetizing maximum engagement and attention, which is what's driving the amplification of polarizing content, oral outrage, et cetera. And so I'm curious if you have reactions to that, that one of the

further strategies companies are developing is finding ways not to just sit back, but actually frame debates, actively use communication to stall by using a false dichotomy. Well, these are companies that are very good at very persuasive, and they're too have the very persuasive tools at their disposal. And yeah, that's right. Sort of changing the conversation is a key tactic here. It's not something the tech industry invented. And the tech industry has always positioned itself for a very long time as a different kind of business, kind or gentler capitalism. Don't be evil capitalism, right? And that has been part of its great appeal. And it's genuine. I think it's earnest. It comes from a genuine place. It has a history. There's a reason behind it. But at the

end of the day, these are companies, these are, you know, a C-suite that's accountable to its shareholders. These are publicly traded companies. They're accountable to their investors. They're accountable. So there aren't that different from any of the other lobbying industries in Washington. Wouldn't she agree, Rody? Yeah, absolutely. And, you know, this could be a good point to talk a little bit about how lobbies change also, that these are not companies that are hiring connected lobbies to go up to Capitol Hill and try to get a member Congress to support them.

They're running basically presidential campaigns on behalf of their issues. And one of the first things you want in a good presidential campaign or a good national campaign is a good, easy to understand motto or a slogan. and, you know, that's why these companies seem to have these good arguments. I mean, back to the SOPA-PIPA fight that we talked about earlier, the 2012 shutdown the Internet Day, you know, the company's slogan was, these bills will kill the Internet, that SOPA-PIPA will kill the Internet. That absolutely was not true, but it galvanized Americans, all of a sudden Americans who don't

pay attention to Washington, who don't pay attention to policy, who certainly couldn't tell you what PIPA or SOPA stood for, you know, we're saying, what, you're going to shut down, you're going to kill the Internet, you can't do that, and you're calling and say, don't shut down the internet. You know, I mean, that's a tactic that was being used even before then, but certainly something that tech companies have gotten better at now. And just to slow you down for a second, because when you're saying they're running presidential campaigns,

I think what you mean is that a presidential campaign is a nationwide thing that takes hundreds of millions of dollars to sway public opinion. And I hear you saying that each of these campaigns about certain regulations or about certain things are, these aren't subtle things. These are multi-100 million dollar campaigns. and sweeping the entire nation. Is that right? Absolutely. And what these companies do, particularly when they're in a big legislative or policy fight, is sort of set up legislative warrooms, and they run these presidential campaigns

not to elect a individual, but for a public policy issue. So they have pollcers, and they have grassroots organizers, and they have poll-tested messages. And, you know, television ads. I mean, one of the reasons that some of these antitrust bills got killed in the Senate is that the tech companies went out to key states and ran ads saying, you know, don't let these bills pass. And that scared senators who thought that the tech industry could turn those ads against them in their reelection bits. So, yeah, I mean, these tactics and campaigns and strategy are way more sophisticated than they used to be and much more like a presidential campaign than what most people think, a lobbying campaign. is about. I mean, that's wild to me. Even as an industry insider, it's wild to think about and I think when you think about lobbying, you think about backroom deals, you think about, oh, you scratch my back, I scratch yours, you pass this law. Not a hundred million dollar

coordinated multi-year influence campaign across, you know, I mean, it's just, the scale is just unbelievable. And this is a story of money. I mean, this is reflecting that these companies, that the industry and its largest companies have just piles and piles and piles of money. It's money there. they're throwing into building AI and they're throwing into these public policy campaigns. I mean, we think about the industries that are the biggest Washington lobbyists by spend. They also happen to be the most profitable pharma, oil and gas, and now tech. Yeah, it says in our brief here that through Q1 of 2024, it says $30 million have been spent on lobbying. And 2023, there was over $100 million spent on lobbying.

And those are, what's remarkable at those numbers, is that that makes those companies the top lobbying spenders in D.C. But for the companies, it's nothing. It's a drop in the bucket. I mean, they make that money back, you know, I was going to say before lunch, but really before breakfast. So looking ahead to the next presidential election, how are you two seeing these issues start to play out? I think there's a fairly interesting thing that's going to happen with this election, which is that in the past, Republicans had been very pro-business and anti-regulatory, and Democrats had been the opposite. Let's go back to Microsoft, where we started. When Microsoft was sued by the Clinton administration for antitrust violations, one of the things that Microsoft did was spend as much money as possible to get George Bush elected to become the next president.

And once the Bush administration got in power, one of the first things they did was stop the investigation. They settled with Microsoft. That model worked forever. I don't know if it works this time. There is an increasing number of Republicans and Democrats, as we've discussed, who are against these companies. So, you know, this antitrust lawsuit into Google that was decided this week was started under the Trump administration. If Trump were to come back and Google would appeal, you know, he's still going to keep pushing that lawsuit. It's his.

A number of these other tech investigations are by the FTC. and DOJ into Apple, into Facebook, into Amazon, into Google, I think it would continue no matter who wins. And that's just a change in politics that we've had that both sides are sort of anti-tech now. And increasingly both sides think that we should be using antitrust laws more aggressively than we had in the last 50 years. One of the people I spoke to for our book was J.D. Vance, who all of a sudden is important. And when I spoke to him, you know, he said, concentrated economic power is as bad or worse than government power. And to me, that sounded like what a Democrat would say.

And this is someone who now could be the vice president. So I don't know if there's going to be a huge difference in terms of tech policy depending on this election. So in this conversation, we've diagnosed a bunch of problems. You know, we've diagnosed that there's a complexity gap. Technology is moving faster than, you know, the law. And when technology companies see Ted Stevens say the internet is a series of tubes, That's not them just advocating for their position.

That's realizing that there's a lack of understanding in government. And we want to preserve the kind of lobbying that's educational, right? But we don't want the kind of lobbying where there's, let's say, a thousand to one difference in the amount of resources that companies and private interests can deploy compared to that which might be good for people. So when you think about this perspective, what are the kinds of mechanisms or interventions that would lead us to a more humane world with a better balance of power? Brody? That's a tough one. you know, I feel like reporters are really good at pointing out the problems, but not very good at coming out with solutions. But, you know, in what we've talked about, you know, these companies,

as we've said, are spending far more money to get far more influence than regular Americans. But at the end of the day, regular Americans do have the power. They have the votes. They're the ones who send members of Congress to Congress in the first place. The problem is that, you know, most consumers and Americans are not mobilized and organized. There's not one big organization. It's pulling people together. But if there was, if that's, you know, if the American people can come together and talk to their members of Congress in an organic way, you know, similar to the shutdown the Internet data, Google and the tech industry organized, if there was an organic movement like that, that the American people would have far more power than corporate America. It's just that

they're disorganized right now. Yeah, I think for so long Silicon Valley or the tech industry in D.C. have kind of seen one another through a glass darkly, not quite understood and appreciated the role of the other in the broader project in which all are engaged. Silicon Valley, you know, has its origins in government spending and defense spending during the Cold War. The government policy towards higher education, research and development, as well as spending on tech, buying tech things and encouraging the development of them, has been foundational to the valley from the Manhattan Manhattan Project to today, and that's something that isn't fully appreciated. And I think kind of drives some of the anti-regulatory feeling in the valley when we move beyond the kind of C-suite of

these biggest companies, but it's kind of this feeling like, oh, if you regulate us, this innovation machine's going to stop. And actually, the longer history shows that this, that is not the case, that there has been a real robust government role that has encouraged the growth of the valley. So I think that's one thing. I think the other thing, I think, Shurston, you point out this gross imbalance and expertise and resources, which is, I think, a result of this is something where government itself, it's a reflection of this dismantling of the expertise from within the government at the federal level, where you have industry, agencies like the FTC that are kind of operating on a shoestring and tin cans between them, basically, with very little

expertise. And where, particularly in the last 15 years, there's been this giant sucking sound that has drawn expertise from academia and from government towards industry, because the paycheck is just too good. So we have this real severe imbalance. I think part of it is Washington or the public sector, the public building up its capacity to be good partners, be good regulatory partners, and to understand how the tech works and to do smart regulation that may well cut into profits, but actually will ultimately benefit the consumers, which is the point of the whole consumers and market competition, which is the point of the whole business. Well said. And actually, when you look over time, you see kind of a swing towards less regulation, more regulation, you see, you know, change happens slowly, then happens all at once. And so the kind of political dysfunction of capital hell, it will not be forever. If history is any guide, history doesn't repeat itself. Nothing's inevitable. But we generally have some good proof points. And also, again, go back to the early 20th century and kind of the extraordinarily concentrated wealth and power, what dismantled

And it took a long time, but it involved government and involved citizens mobilizing together in interest groups of their own, lobbying groups of their own, and the voters, the voters voting, and voting for pro-regulatory policies and lawmakers. And gradually, things do shift. I think that's a great place to leave it. Yeah, Margaret and Brody, thank you so much for coming on your undivided detention. Thanks so much for having us. Thank you.

Your undivided attention is produced by the Center for Humane Technology, a non-profit working to catalyze a humane future. Our senior producer is Julia Scott. Josh Lash is our researcher and producer, and our executive producer is Sasha Fegan. Mixing on this episode by Jeff Sudaken, original music by Ryan and Hayes Holiday. And a special thanks to the whole Center for Humane Technology team

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