In these days of big government, neglecting Washington is a costly gamble. The New York Times reports that Facebook is trying to prepare for likely attempts to regulate internet privacy by ramping up its Washington presence. The world’s largest social network is hiring political affiliates from both parties.
There’s Sheryl Sandberg, the former Clinton administration official who is chief operating officer, and Ted Ullyot, a general counsel former clerk for Supreme Court Justice Antonin Scalia who is general counsel, among others. The latest candidate is Robert Gibbs, President Obama’s former White House press secretary, whom Facebook is trying to lure to its communications team.
The information technology sector is among the fastest growing sector in the US economy. As the stacks of money flowing into this sector are piling up, Washington officials and competitors are becoming more and more interested in getting their piece of the pie.
Richard A. Epstein, a New York University law professor and senior fellow at the Hoover Institution, who has counseled companies on how to avoid regulation, said Facebook appeared to have learned especially from Microsoft, whose early disdain for Washington became a liability when it was the target of antitrust regulators in the late 1990s.
“The stakes have gotten so large that companies are hiring two kinds of people: people who know something and people who know somebody,” Professor Epstein said. “Access is priceless.” …
“None of this is rocket science,” said Andrew McLaughlin, who served as director of global public policy at Google before joining the White House as deputy chief technology officer in 2008. “You make a judgment as to how much of a threat you face in D.C., you decide how much money you are willing to spend, and then you hire people based on your strategic sense.”
Part of the cost of regulation arises when companies try to either prevent or favorably influence regulation. Some companies will find it cheaper to buy a favorable regulatory environment that stifles their competitor’s success, rather than compete on economic merit. Defending companies are then forced to counter-invest in lobbying efforts to protect themselves from harmful regulation.
Facebook is trying to get a leg up on its competitors and others, demanding more regulation over the internet giant’s vast resources of voluntarily provided user information. It will be interesting to see how this conflict will play out.