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FB/AMZN/GOOG: Follow The Money, Find the Risk

By admin_45 in Blog FB/AMZN/GOOG: Follow The Money, Find the Risk

Since the US Department of Justice officially announced its investigation into Big Tech just yesterday, it’s the perfect time to update you on how the DOJ’s likely targets have been preparing by way of lobby spending. This investigation has been a long time coming, after all, with the US government not shy in airing their concerns about Facebook, Amazon and Google’s business models.

With that, here are the latest lobbying expenditures for those companies based on their recent filings and data from the Center for Responsive Politics:


  • In 2018, Facebook spent $12.6 million dollars on lobbying, exceeding its prior record of $11.5 million in 2017. Last year’s figure was up 28% from the $9.85 million allocated to lobbying in 2015 (i.e. before all the current government scrutiny).
  • Facebook is on pace to beat last year’s record in 2019, having spent $7.5 million in the first half of this year ($3.4 million in Q1 and $4.1 million in Q2).


  • Amazon spent $14.4 million on lobbying in 2018 compared to its previous record of $13.0 million the year before. That was up 53% from 2015’s $9.44 million.
  • The company has laid out $7.9 million towards lobbying efforts so far this year through the second quarter ($3.9 million in Q1 and $4 million in Q2). Like Facebook, these figures also put Amazon on pace to beat last year’s lobby spend.


  • Google spent a record $21.7 million on lobbying last year, more than its prior high of $18.4 million in 2017. That was up 30% from $16.7 million in 2015.
  • The company spent $6.3 million on lobbying in 1H ($3.4 million in Q1 and $2.9 million in Q2).

Bottom line, these companies continue to feel the regulatory heat as all three spent record sums on lobbying last year and two of them are already on track to do so again (and Google may want to pick up its game). As for what they most recently lobbied on, here are some specific issues according to their Q2 filings:

  • Facebook: “Issues and discussions related to technology and the Internet including privacy, security, competition, and research; online advertising, content and platform transparency efforts, general discussions on data breach, issues related to platform integrity and cybersecurity, artificial intelligence…”
  • Amazon: “Issues related to data protection, encryption, data retention, data breach notification, data security, facial recognition technology, cross border data flows, privacy, law enforcement access, product safety, and cloud computing…”
  • Google: “Privacy and competition issues in online advertising, intellectual property enforcement, privacy and data security issues, cybersecurity, EU digital tax, global trade issues, competition regulation and antitrust law domestically and internationally, quantum computing, net neutrality…”

As for what all this regulatory pressure and lobbying efforts mean for investors, two final points:

#1: You may not be directly invested in Google, Facebook or Amazon but they still hold considerable weight in two major S&P 500 sectors and the entire index as we continue to highlight:

  • Facebook and Alphabet/Google account for nearly half (43%) of the Communications Sector; 20% for FB and 23% for GOOG/L.
  • Amazon makes up almost a quarter (24%) of the Consumer Discretionary sector.
  • The three companies have a collective 8.1% weighting in the S&P 500; AMZN at 3.3%, GOOG/L at 2.8% and FB at 2.0%.

All three companies are acutely exposed to legal action from the DOJ. As Nick described in last night’s report, the department is most focused on:

  • Powerful and cash-rich companies reinforcing their monopolies by buying up competitors (i.e. Facebook/Instagram).
  • Those hurting competition despite delivering innovative and cost-effective products through network effects (i.e. Amazon vs. other retailers).
  • Companies putting competitors at a disadvantage even though their offerings are largely free (i.e. Google’s dominance in search and online advertising).

Let’s also not forget that it isn’t just the DOJ investigating these companies on anti-trust grounds. Just today the Federal Trade Commission approved a record $5 billion settlement with Facebook regarding its privacy policies.

#2: If you still want exposure to “Big Tech”, but with less regulatory risk the S&P Technology sector should be comparatively safer. Apple is the company most likely at risk to the DOJ investigation, which has the second highest weighting of 16.7% in XLK behind Microsoft. On the plus side, Apple’s data collection and usage model differs from AMZN/FB/GOOG which is why CEO Tim Cook seems more comfortable calling for incremental privacy regulation. Even with that, its App Store will certainly be a focus. 

But consider that, Apple is simply not lobbying as aggressively as the other companies. While AMZN/GOOG/FB spent a record amount on said efforts last year and most are likely going to again in 2019, Apple’s lobby spend peaked back in 2017 at just $7.2 million. The company actually decreased lobby spending by 6.9% y/y to $6.7 million in 2018. This year, Apple is on pace to top that figure as it paid $3.7 million on lobbying in the first half, but that’s between +$2.5 to +$4 million less than Facebook, Google and Amazon.

The upshot: Facebook spent the most on lobby spending in Q2, followed by Amazon, Google and Apple, and that order is a reasonable proxy for each company’s own perceptions of their future regulatory risk. And there is one possible silver lining: while they know they are all at risk, they’re clearly ready to spend what they need for influence and potential protections in Washington. Don’t hate the players, hate the game…

Center for Responsive Politics Data: AmazonFacebookGoogleApple

Q2 Lobbying Reports: AmazonFacebookGoogleApple

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