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Big Tech split leads to demise of Internet Association

Street sign for K Street, the Wall Street of political influence in the US capital.
Enlarge / Street sign for K Street, the Wall Street of political influence in the US capital.

Bjarte Rettedal | Getty Images

Growing tensions between Microsoft, Amazon, Alphabet, Meta, and Apple lie behind the death of the Internet Association (IA), the nine-year-old lobby group that was Big Tech’s voice in Washington, according to insiders and industry observers.

The Washington-based group, which dubbed itself the “unified” voice of the internet industry, will shut at the end of the year after both Microsoft and Uber, among others, pulled their financial support, leaving an insurmountable funding gap.

“Our industry has undergone tremendous growth and change,” it said in a statement, adding that its closure was “in line with this evolution.”

The closure is a sign of the increasingly different policy objectives of its Big Tech members, said observers, with Microsoft in particular looking to distance itself from its Silicon Valley peers.

“Microsoft has realized that it doesn’t want to be associated with Google, Facebook and Amazon,” said Barry Lynn, executive director of the Open Markets Institute, an anti-monopoly campaign group. “It’s really, really simple.”

A number of smaller tech companies had also become frustrated that their priorities were at odds with Big Tech’s agenda.

“This org could’ve saved itself years ago by kicking out everyone with a market cap greater than $500 billion,” tweeted Luther Lowe, Yelp’s head of public policy. Yelp left the association in 2019. “I made this suggestion to the leadership a few years ago, but it was shot down, so we quit.”

A person familiar with Microsoft’s decision-making said the company no longer saw value for money in its involvement with the IA. Membership dues are calculated according to companies’ size, based on revenue.

An earlier report from Politico suggested the biggest contributors, Microsoft among them, were paying up to $800,000 to $1 million per year. Microsoft declined to comment.

Despite being the second most valuable US technology group, Microsoft has been able to dodge the latest focus on antitrust in Congress. Unlike the CEOs of Facebook, Google, Apple and Amazon, Microsoft’s Satya Nadella was left out of the blockbuster congressional hearing in July 2020 that saw the others summoned for a lengthy grilling.

Microsoft has also not yet been the focus of any action announced by President Joe Biden’s reinvigorated Federal Trade Commission.

The company, which went through lengthy antitrust scrutiny in the early 2000s that led it to the brink of being broken up, now boasts about a more collaborative approach with regulators. An internal memo written by Microsoft president Brad Smith and sent to staff in June outlined the company’s strategy.

“There will be many days when some in the tech sector will complain loudly about the risks of regulation,” read the memo, which the company shared with the FT. “There are real risks, and they need a fair hearing. But as a company, we will continue to be more focused on adapting to regulation than fighting against it.”

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