Facebook helps set up American Edge to battle antitrust push

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In December, American Edge formed as a nonprofit organization, and last month, it registered an accompanying foundation, according to incorporation documents filed in Virginia. The setup essentially allows it to navigate a thicket of tax laws in such a way that it can raise money, and blitz the airwaves with ads, without the obligation of disclosing all of its donors. Many powerful political actors — including the National Rifle Association — similarly operate with the aid of “social welfare” groups.

Facebook is viewed as a critical, primary driver in helping to launch American Edge, the sources said, though some cautioned it is not the only one. On the group’s board are a former Republican governor, federal regulator and Democratic congressman, according to people familiar with the effort, and it’s being advised by a stable of veteran Democratic and Republican consultants.

Asked about the group, Facebook confirmed its participation. “The U.S. leads the world in technology and we should be proud of that fact and promote it,” spokesman Andy Stone said in a statement. “We’re working with a diverse group of stakeholders to help build support for our industry, and while we’re leading an effort to start this coalition, it’s one of many we are contributing to and supporting.”

Even Facebook’s mere involvement, however, threatens to infuriate its top critics, who already have come to view the company as too big and powerful and unchecked in its political power. For Facebook, meanwhile, its membership may reflect a growing unease throughout the tech industry, as Silicon Valley weathers a slew of investigations and continued calls for government regulation.

Silicon Valley’s political fortunes have soured precipitously in recent years amid a slew of scandals and missteps involving its companies’ privacy, security and content-moderation practices. Apple, Amazon, Facebook and Google also have come to face tough antitrust scrutiny, as state and federal leaders question whether their sizable corporate footprints stifle competition and harm consumers.

The Federal Trade Commission is probing Facebook in particular for violations of antitrust law, as are many of the nation’s attorneys general. The inquiries have explored the tech giant’s past purchases of its former rivals, including Instagram and WhatsApp, threatening in a worst-case scenario to unwind those deals. Facebook maintains the marketplace is competitive.

Still another investigation on Capitol Hill has explored the extent to which federal antitrust rules are sufficiently powerful to keep digital behemoths such as Facebook in check. At a minimum, the efforts in Congress could result in lawmakers further grilling Facebook chief executive Mark Zuckerberg about his company’s business practices, ranging from its approach to privacy to its handling of disinformation during the presidential election.

Amid the onslaught of attention, Facebook has significantly scaled up its lobbying effort in Washington, spending more than $16.7 million last year to influence regulators, federal ethics records show. Over the first three months of 2020, Facebook shelled out an additional $5.2 million, making it the seventh-biggest spender in the nation’s capital across all industries, according to data compiled by the Center for Responsive Politics. Along with antitrust enforcement, Facebook has sought to battle back efforts to regulate the way it moderates content online.

Some of Facebook’s previous tactics have stirred controversy.

Almost two years ago, Facebook similarly sought to take aim at its critics — only to draw widespread rebukes and fresh calls for its top executives to step down. In that case, Facebook turned to a political firm, called Definers Public Affairs, in the heat of the Cambridge Analytica privacy scandal. The firm created fake news articles and attacked some of the company’s prominent critics before it ultimately was dismissed. Facebook later paid $5 billion to settle federal allegations that the social-networking company deceived its roughly 2 billion users.

Unlike Definers, the new American Edge effort is public facing. Rather than produce opposition research, it plans to fund ad campaigns as well as studies by academics to make the case for the tech industry, according to sources, including its articles of incorporation in Virginia.

“The American Edge Project is dedicated to the bipartisan proposition that American innovators are an essential part of U.S. economic health, national security and individual freedoms,” said John Ashbrook, a Republican consultant advising the group and a former top aide to Senate Majority Leader Mitch McConnell (R-Ky.).

Ashbrook said they have partnered with a “diverse set of stakeholders” but declined to name any other corporate backers. Amazon did not respond to a request for comment, and Google declined to comment (Amazon chief executive Jeff Bezos owns The Washington Post).

The group’s board is set to include Susana Martinez, the former Republican governor of New Mexico; Bradley Smith, a former Republican commissioner on the Federal Election Commission; and Chris Carney, a former Democratic congressman from Pennsylvania who’s now at a consulting firm, two people said. Smith and Carney did not respond to requests for comment, and Martinez could not immediately be reached.

In doing so, American Edge is also expected to argue that strong restrictions imposed on tech giants could hurt U.S. firms and ultimately serve to aid their competitors, particularly in China, according to another person familiar with the effort, who described it as a “fake grass-roots” attempt to influence the policy debate in Washington. Zuckerberg last year warned against Chinese firms “exporting their vision of the Internet to other countries” in a speech last year at Georgetown University.

American Edge has come together with the aid of top Democratic and Republican operatives, including Jim Papa, a former aide to President Barack Obama, and Danny Diaz, who has advised GOP governors and presidential campaigns on media strategy. Papa did not respond to a request for comment, and Diaz declined to comment.

Zuckerberg has helped to launch such entities in the past. Seven years ago, the Facebook founder helped spearhead FWD.us, an effort to influence policymakers on the issue of immigration reform. FWD.us, much like American Edge, is a “social welfare” nonprofit group under tax law that doesn’t have to reveal its donors.

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