SOPA: the tech industry’s self-inflicted wound

Don't shoot yourself in the footToday’s Web blackout against the Stop Online Piracy Act (SOPA), which saw Wikipedia, Reddit, and a host of other sites go dark for a day to protest that legislation, looks to have been a huge success; it sounds like it got a lot of people to contact their Members of Congress in opposition to SOPA, and it definitely raised the profile of the issue among the public at large.

But one question keeps coming up that nobody really seems to have a good answer for: how did the tech industry find itself in this situation in the first place?

The most common answer I’ve seen given to this question is a simple one: the content industry paid Congress off. An example of this explanation would be this piece at The Verge today, in which self-identified “former lobbyist” T.C. Sottek argues that on the Hill money talks and good intentions walk:

Lawmakers may have their own parochial interests or lofty causes, but first and foremost they’re always looking for votes. To get votes, they need attention and money — something that corporate lobbyists can dish out in abundance. The end product of this system is lawmaking that’s less about making good public policy and more about appeasing the hands that feed — as a result, powerful corporations with deep pockets gain unparalleled access to members of Congress, and they help set the agenda. That agenda is why bills like SOPA and PIPA gain such traction — they were delivered to Congress in return for money and votes…

Even if SOPA and PIPA die on the vine, Congress will be back with fresh legislation and cute new propaganda-laden titles, courtesy of the MPAA and RIAA’s ruthlessly effective combination of money and patience — a combination the tech community has shown little interest in matching…

As long as the entertainment industry spends more money in Washington than the tech industry, bad laws like SOPA and PIPA will appear with frightening regularity.

This makes it sound like the reason for SOPA is that the content industry spends a lot on lobbying and the tech industry does not. But the problem is that if you dig into the actual data that storyline looks less and less plausible — and what looks more plausible is that tech wasn’t outspent, but instead spent its money in dumb ways.

I spent a little time with the invaluable database this evening looking into the matter. I actually went in thinking that Sottek was right, and that the data would show a huge disparity in political spending between the two industries. But what I found surprised me: in recent history, tech as a sector has generally spent about as much as Big Content has on affecting policy — and, in some ways, has actually spent much more.

I looked at two different types of political spending. The first was contributions to candidates, which is what most people think of when they think of money in politics. The second was lobbying expenses — money spent “educating” Congress between elections to think the way you want them to. OpenSecrets helpfully lets you break both types of spending down by industry; I chose the “Computers/Internet” industry category (which includes spending by Google, Microsoft, Apple and Facebook) to identify as the “tech sector,” and “TV / Movies / Music” (which includes Sony, Disney, News Corporation, Time Warner, and Comcast) to identify as the “content sector.”

Let’s look at total contributions to candidates first, going back to the 2000 election cycle:

Campaign Contributions By Sector, 2000-2010
Election Cycle Tech Sector Contributions Content Sector Contributions Tech / Content
2010 $15,654,428.00  $18,679,096.00 84%
2008  $30,596,112.00 $31,943,700.00 96%
2006 $13,564,277.00 $15,934,422.00 85%
2004 $17,614,992.00 $20,004,345.00 88%
2002 $7,894,390.00 $9,674,504.00 81%
2000 $11,804,268.00 $12,172,753.00 97%

So while we see here that it’s true that content has generally outspent tech, it’s not really true that they’ve done so by huge, majority-making margins; in the average election cycle from 2000 to 2010, tech gave candidates 89% of what content did. An 11% difference is nothing to sneeze at, but it paints a different picture than that of the poor tech industry getting steamrolled by Big Content.

When you look at lobbying expenditures, that picture becomes even less convincing:

Lobbying Expenditures By Sector, 2000-2010
Year Tech Sector Lobbying Content Sector Lobbying Tech / Content
2010 $122,398,650.00 $111,127,528.00 110%
2009 $119,401,783.00 $107,413,377.00 111%
2008 $123,739,942.00 $102,585,026.00 121%
2007 $120,659,684.00 $82,283,044.00 147%
2006 $116,750,235.00 $76,344,867.00 153%
2005 $95,995,157.00 $58,505,671.00 164%
2004 $88,339,850.00 $48,784,820.00 181%
2003 $78,348,509.00 $45,284,236.00 173%
2002 $69,235,588.00 $41,677,230.00 166%
2001 $67,721,048.00 $40,059,845.00 169%
2000 $56,066,897.00 $34,163,127.00 164%

Stop and look at those figures for a moment. They show tech, as a sector, spending more on lobbying than Big Content does. A lot more! In the average year between 2000 and 2010, tech’s lobbying spending was 151% of content’s.

And yet, despite all that spending, Big Content nearly managed to push SOPA through Congress without so much as a spirited debate. How did they pull that off?

The answer, I think, lies not in how much was spent, but in who spent it. Look at OpenSecrets’ list of tech sector organizations reporting lobbying expenses for 2010, and compare it to their list of content sector organizations from the same year. Can you spot the difference?

The tech list is almost entirely made up of companies: Microsoft, HP, Google, Oracle. The content list has plenty of companies too, but it also has major spending from industry associations: the NCTA (the cable industry trade group), NAB (the broadcast industry) and the RIAA (recorded music). And if you were to venture down below the top ten you’d see big spending from several other content industry associations, like the Motion Picture Association of America ($1.3 million), the National Academy of Recording Arts and Sciences ($341,000), and ASCAP ($240,000). Tech, by contrast, has few associations on the list, and the ones that are there spend less.

More tellingly, though, none of the major tech associations has as its primary mission the protection of the open Internet. Their members all benefit from an open Internet, of course, but the existence of that open Internet is not a direct concern of, say, the Entertainment Software Association (representing video game publishers, $4.6 million) or ITI (enterprise computing, $2.6 million). Even worse, one of the few major associations on the tech list, the Business Software Alliance ($2.1 million), actually supported SOPA, until outcry from the rest of the tech sector led them to back off.

Here, then, we find the real reason why tech was nearly sandbagged by SOPA. It wasn’t because tech is getting outspent by the deep pockets of Big Content; it’s because tech spends its lobbying money in dumb ways. Each tech company comes to DC and lobbies on its own behalf for itself and its own interests, which may or may not align with those of other tech companies, depending on the issue. But who stands up for the core issues that all tech companies cares about? Nobody, because tech hasn’t bothered to establish institutions to do that.

Big Content is smarter. Its members spend money lobbying for their own interests, but they have also taken care to build organizations to look out for the interests they all have in common, and have funded those organizations sufficiently for them to advocate vigorously on their behalf. This enables them to pool their resources on those common issues and put forward a unified, cohesive message — something that tech only managed to do on SOPA when its back was up against the wall.

Now, don’t get me wrong. I’m no fan of money in politics; I think it distorts and corrupts the system in countless ways. But I am a pragmatist, and given that we’re not going to get the money out of the system overnight, it behooves those of us who care about a free, open Internet to ask what we should be doing to keep it from being threatened like this again. And as long as money rules politics, that will mean mobilizing the money on our side more effectively than the people on the other side of the issue do.

Will SOPA prompt Google, Facebook, Microsoft, Apple and the rest of the companies whose fortunes rest on the open Internet to learn this lesson and start building the institutions needed to make it happen, or start funding institutions like the EFF that are trying to?

I guess we’re about to find out.


Jon Stahl

January 19, 2012
12:38 am

Good counterintuitive analysis. Thanks!

Jon Stahl

January 19, 2012
12:39 am

Nice analysis, thanks!


January 19, 2012
12:50 am

I think it is unfair to look at SOPA only in terms of game of influence and lobbying. In all the discussions that I have seen recently, people talk about the suppression of online freedom. No one is thinking about the crimes that are being committed online and how virtually every tech giant is shrugging its shoulders and saying that they can not be held responsible for what happend on their own sites.
I just wrote an article that might be worth reading.


January 19, 2012
1:15 am

I think your analysis rests on a flawed premise: that all the “Tech” companies are interested in defeating these bills.

You say tech only managed to pool their resources when backed against a wall, but it’s not true: the only companies you see support the blackout were Google and a bunch of Internet Startups. Why? Because they’re the only ones from “Tech” who will really be hurt by these laws.

For Microsoft, what the Internet really represents is competition. Google Docs eating on their Office revenue. Open Source replacing their proprietary products. There’s Bing, but it’s a dead weight.

As for Apple, similar thing. First, they sell devices and know people will buy them with or without free internet. Second, they have their own little garden with contracts with the media industries (so no worries about takedowns), which can only benefit from less competition.

And Oracle, who are their customers? Internet startups that distribute user generated content? No, they’re big enterprises who have their old fashioned businesses (many offline) and who won’t really be affected by this.

So you see, you need to discount everyone’s lobbying contributions except Google’s. And those are probably much, much, much smaller than the RIAA’s and MPAA’s.

Sandy Smith

January 19, 2012
11:44 am

Ah, government: a constant rearguard action to ensure that somebody else doesn’t destroy your livelihood for their temporary advantage. Or, in local politics, to simply enforce their aesthetic choices on others.

This article is the best unintended argument for limiting government power I’ve seen in a while.