Marking the end of an era, the Internet Association, a prominent lobbying group for major tech companies in Washington, is set to cease operations by the close of December. The dissolution comes as key members like Microsoft and Uber retract their financial support.
Speculation is rife that escalating conflicts among tech behemoths such as Amazon, Alphabet, Meta (formerly Facebook), and Apple led to this shutdown. The association’s board shared this news on Wednesday without delving into the specifics behind the closure.
Commenting on the development, the group said, “As the tech landscape has dramatically transformed over our near-decade-long trajectory, our board has reached a challenging but necessary decision to dissolve the association at year’s end.”
Amazon CEO Andy Jassy expresses concerns regarding Microsoft escaping regulators’ scrutiny.
The Internet Association was a mighty union, bringing together tech powerhouses like Google, Facebook (now Meta), and eBay. Michael Beckerman, the group’s initial CEO, left in 2020 for a role in TikTok’s U.S. policy team.
Clashing policy viewpoints have reportedly fragmented the association, causing disillusionment with the current leadership under CEO K. Dane Snowden. The tension surrounding the enforcement of anti-trust laws against prominent companies has been a sticking point.
Microsoft has signaled a divergence from the consortium, suggesting its future interests significantly differ from those of the other major players. Barry Lynn, head of the Open Markets Institute, noted, “Microsoft desires to distance itself from companies like Google and Amazon.”
Moreover, up-and-coming enterprises such as Yelp, alongside various online delivery platforms, have voiced their concerns over the alignment of the Internet Association with the objectives of the larger entities. Yelp’s departure from the group in 2019 highlighted this disparity, as noted by Luther Lowe, the senior executive for public policy who suggested an exclusion of the more colossal corporations to preserve the group’s mission.
The association, which reported revenues exceeding $10 million in 2020, listed 42 members on its site. With annual fees reaching as much as $1 million for advocacy efforts, the expense became a point of contention, particularly for companies like Microsoft.
An interesting note is that Microsoft has managed to sidestep the recent Congressional scrutiny directed at Amazon, Meta, Apple, and Google, despite undergoing a similar investigation in the early 2000s. Microsoft’s strategic shift—to collaborate rather than contend with regulation—is revealed in an internal memo by its president, Brad Smith.
While Amazon and Google have steadily invested in their Washington lobbying efforts, newly revealed data shows that Microsoft appears to be stepping back, potentially influencing their position in anti-trust discussions. Dan Ives of Wedbush Securities suggested that Microsoft’s separate path could put Amazon and Google at a disadvantage.
Amazon’s new CEO, Andy Jassy, is particularly vocal about Microsoft’s evasion of regulatory scrutiny. According to an inside source, Jassy is adamant that “…they should be targeting Microsoft for ongoing infractions.”
Parallel to these industry dynamics, an Amazon-funded advocacy organization has criticized Microsoft’s practices around software licensing agreements. It argues that proposed legislation, like the EU’s Digital Markets Act, will fail if it does not address the dominance of software providers. The group demands recognition of these legacy software vendors as gatekeepers, advocating for the outlawing of anti-competitive practices, thus sparing European companies from onerous legal battles.
In the same vein, a Google-supported study revealed a disproportionate reliance by U.S. government agencies on Microsoft’s productivity software, hinting at possible increased expenses, stifled innovation, and amplified cybersecurity risks due to this dependency. The report underscores the critical implications of such over-reliance on a single software provider.
