How much does it cost to get the feds off your back?
For Google, the price was less than 1 percent of the cash in its pocket.
Google stepped up its lobbying efforts during the two-year period when the government was investigating the search giant for possible antitrust violations, spending $25 million to buy influence in Washington, Politico reports late Thursday.
That investment paid off Thursday when the Federal Trade Commission announced it was taking no action on a major part of its investigation -- that Google used its market power to demote competitors' listings in search results.
The lobbying costs were a small price to pay for Google -- to be precise, about .05 percent of the $50 billion in cash the company keeps on hand, The Next Web notes.
By comparison, Google spent nearly three times more on TV ads in the United States last year -- about $70 million -- than the company paid lobbyists during the FTC investigation.
Google’s successful lobbying effort reinforces the perception that the government is no match for the deep-pocketed corporations that it’s supposed to watch over. Last year, regulators tried repeatedly to punish Google over alleged privacy failures, but extracted penalties that amounted to little more than slaps on the wrist.
In April, the Federal Communications Commission hit Google with a $25,000 penalty for obstructing an investigation into charges the company’s Street View cars siphoned personal data of residents from nearby Wi-Fi networks.
In August, the FTC said it obtained its largest settlement ever when Google agreed to pay a $22.5 million fine over charges it bypassed privacy settings in Apple’s Safari browser to display targeted advertisements.
Yet even David Vladeck, the director of the FTC's Bureau of Consumer Protection, said at the time that the penalty "may not seem like a lot of money to Google." In 2011 year, Google earned $37.9 billion in revenue, nearly all of which came from advertising.
Meanwhile, the FTC appears to lack basic resources to conduct its investigations, according to a report last year in Wired. The agency's entire budget last year was $312 million, or less than 1 percent of Google's 2011 revenue.
Sweet talk, it turns out, helped get regulators on Google's side, too. The New York Times notes that executives at Microsoft, which famously faced down the federal government its own antitrust case in 1990s, "were known for their uncooperative demeanors during their tangle with the government." Google learned a lesson from that case and treated government officials nicely, the Times reports.
Google isn't the only one to step up its lobbying efforts to avoid harsh penalties from regulators. Last year, Facebook doubled the amount of money it spent on lobbying, spending about $2.6 million while the FTC investigated the social network over charges it revealed details about users' without consent.
That investment appeared to also pay off: In August, the FTC announced that, as part of a settlement, Facebook agreed to government audits of its privacy practices, but would not pay any fine.
Related
Before You Go
