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How Google and Amazon bankrolled a ‘grassroots’ activist group of small business owners to lobby against Big Tech oversight

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Google’s logo is visible on the building of La Defense in Courbevoie, France. It was placed there, September 1, 2020.

Charles Platiau | Reuters

Clay Montgomery runs a small blacksmith shop, “Arrow M Enterprises”, outside Mingus Texas. Here he makes hand-forged metal pieces and grilling equipment. His products include a hot barbeque sauce, and a “BiteMy Butt” meat rub.

Montgomery’s blacksmith shop is listed in the Washington D.C. trade group “Connected commerce Council”, which claims it lobby for small businesses. The council’s website describes it as a membership non-profit with one goal, “to encourage small businesses to access essential digital technologies and tools.”

According to their website, the group campaigns against excessive regulation of tech companies. It also wants policymakers to understand “the essential intersection between technology and small businesses.”

Montgomery insists he isn’t a member, and in fact has never heard about the Connected Commerce Council. CNBC spoke with the blacksmith, who said he would not join any Washington tech lobbying organization. According to him, “Technology doesn’t exactly suit me.”

Montgomery isn’t alone small business owner who was puzzled to see their names on the Connected Commerce Council’s member list. It also goes under the name “3C.” CNBC interviewed more than 20 members who also said they hadn’t heard of this council, and didn’t know why.

‘Astroturf’

Although the council is marketed as representing small-business owners on a grassroots level, it’s actually an advocacy group that has been well-funded by tech heavyweights. GoogleAnd Amazon. These two companies, both tech firms are listed on the site as “partners”. CNBC also confirmed to Chris Grimm that the two tech companies are currently providing financial support for 3C.

Campaign for Accountability is a watchdog group that monitors lobbying. 3C was called an “Astroturf” organization by the Campaign for Accountability because of the financial backing from tech giants. It’s Washington lingo for a group which claims to represent grassroots organizations, but is actually an advocate for the big business sector. It is a Washington tactic to advocate for legislative and regulatory goals. This includes the sympathetic use of pop-culture organizations. 3C was described by the Campaign for Accountability in its 2019 report as an “Astroturf style front group for our nation’s biggest technology companies.”

Michelle Kuppersmith (executive director, Campaign for Accountability) stated that “Big Tech” knows voters and representatives don’t sympathize with the complaints made by trillion-dollar companies. Therefore, they have chosen to portray small businesses as real victims of antitrust legislation.

CNBC has several small-business members who confirmed that they are supportive of 3C and its advocacy on Washington issues.

Michelle Thom is a small business owner and stylist at “A Wild Hair by Michelle”, a salon located in St. Clair. She has shown a greater empathy for members of Congress than high-powered technology executives. Thom stated that her company is listed by the Connected commerce Council as a member. However, she told CNBC that her business was not on their roster.

Bud’s Barbershop is located in Wylie Texas. He declined to name his client but was listed as an associate, despite not having heard of it.

Christine Little’s company 1058 Auto and Towing of Swansea in South Carolina was also listed as member. However, she said she wasn’t aware anything about the council. CNBC’s Little said that “I think I would probably recall” her joining the group. “We only tow.”

Partners

CNBC was not the only one to tell that small businesses were confused about their listing on 3C. Until this week, the council also had a page on its website listing its “partners” – companies that the website suggested support the council’s efforts. The page contained the logos for three tech titans. Amazon, GoogleSquare is a payment processor, and it recently changed its name from Block to Block

But Block, created by Twitter founders Jack DorseyCNBC was informed by, that it wasn’t actually a Connected Commerce council partner despite being listed on 3C. CNBC reached Block and Block to find out why the Connected Commerce council had removed Square’s logo.

Grimm claimed that 3C had removed Square’s Logo Monday, following CNBC’s inquiry. This was because Square “is not an active partner in the Connected Commerce Council.” 

In a statement to CNBC, Connected Commerce Council Executive Director Rob Retzlaff said all of the group’s members “affirmatively sign up – at events, online, or through a personal connection – and thousands have opened emails, responded to surveys, attended meetings and events, and communicated with legislators.”

Retzlaff expressed his deepest regret that he had mischaracterized the small businesses’ efforts and views. He also said that he did not believe it was possible to use obsolete membership data to detract from small businesses legitimate concerns regarding policymakers.

The group quietly deleted a directory of thousands of grassroots members it had created from its website in February. Grimm, the council’s spokesperson, claimed that it removed the list as it was behind on updating its member lists. Grimm, the council’s spokesman said that there are more than 16,000 members currently but he did not give a list.  

Membership is free

Grimm stated that the Connected Commerce council does not have a fee structure or charge its members for their services. There is no way to know if the group receives revenue from other than large technology companies. The IRS has filed documents showing that the group had more than $1.6million of revenue in 2018. It spent over $100,000 that year on Washington-based strategic communications firms.

Both Amazon and Google spokespeople confirmed the affiliation of the two companies to the Connected Commerce Council. Although they declined to disclose how much companies donated, they confirmed that the companies do donate.

According to The Washington Post’s 2020 edition, Facebook had been listed as 3C’s partner as of recently. However, the company has now stopped being involved, according to someone familiar with the matter who asked anonymity for more details. Facebook’s parent company spokeswoman. MetaThe spokesperson declined to respond to questions regarding the amount of money that 3C had received in the past.

Connected commerce Council is active in shaping Washington’s debate on antitrust regulation. For several years, it has been working with an outside lobbying agency, the Majority Group. This firm advocates for small businesses and tech issues on Capitol Hill. The Center for Responsive Politics reports that the organization spent $400,000 in lobbying between 2021 and 2021. Connected commerce Council submitted public comments on antitrust issues to the Federal Trade Commission. They argued that big technology platforms, such as Amazon, provide advantages to small business.

Jose Castaneda from Google sent a statement after being asked about Google’s participation in 3C. When asked about 3C, Castaneda stated that many small-business owners are worried “that Congress’s controversial bill could harm digital tools they have depended upon to adapt, recover or reach new customers during the pandemic.” We urge all small-business owners and representatives to contact Congress about the possible unintended effects of these bills on their businesses.

Since its creation in 2018, the Connected Commerce council, with just 304 fans on Facebook, is an active advertiser. According to company’s advertisement library which lists the advertisements and sponsors in these campaigns, the council has spent more than $600,000.

Many of the ads promoted by the Connected commerce Council support the same views as those held by large tech firms that fund the organization. Some bills introduced by Capitol Hill to impose antitrust regulations on tech companies or facilitate their dissolution have also been opposed by tech titans. For example, one bill would prohibit companies like Amazon or Google from promoting their products on online marketplaces at cost to their competitors.

Amazon helps its members

Do not let Congress take America’s technological edge. One ad that was sponsored by Connected Commerce Council, March has been seen more than 125,000 times according to Facebook. The same advertisement also contained a message that stated, “Harmful legislation will weaken America’s economy and threaten small business.”

A March ad refers to Amazon directly, as it is the company that funds the Connected Commerce Council. According to the advertisement, Amazon Marketplace faces danger. Please complete this survey, and take action against Congress. Facebook claims that the advertisement has been seen more than 8000 times. It also asked: Are you a small-business seller? Your experience will be invaluable in helping us fight against harmful legislation.

A survey conducted by the council on Facebook revealed that Amazon Marketplace users think Amazon is too large. This is dangerous, as we know Amazon helps millions of small business owners sell more products, make more money, and help them succeed.

It functions as a well-oiled advocacy organisation. According to the Campaign for Accountability’s 2019 report, 3C’s lobbyists met with 50 Congressmen, submitted seven comments to regulatory agencies, and had sent two witnesses before Congress. According to the report, the council “published several materials portraying a positive picture of tech giants with small-business owners praising them.”

Kuppersmith, the executive director of the watchdog organization, stated that the Connected Commerce council must convince lawmakers it is truly representing the over 10,000 small business it represents. However, once you begin to look behind the scenes, it is clear that Big Tech cash fuels this antitrust image.

Fantastic resource

They pointed out that many small-business owners are members. Mimi Striplin is a former member of the 3C Board. She founded Tiny Tassel in Charleston South Carolina. They sell jewelry and accessories.

According to her, the group “is a wonderful resource for small businesses looking to gain access to digital tools.” 3C keeps me up to date on new laws. Striplin stated that new antitrust laws may negatively affect the cost of digital tools such as software and social media to increase visibility for her products on Google.

Sheryl Sandberg is the Chief Operating Officer of Facebook, speaking at an event held on the sidelines to the World Economic Forum in Davos. Switzerland. January 23, 2019.

Reuters

Sheryl Sandberg became chief operating officer at Meta after Striplin’s tiny shop was noticed. The Tiny Tassel earrings were one of Sandberg’s personal picks in 2020 for Facebook’s #BuyBlackFriday gift guide. This encouraged Black-owned businesses to be supported. Striplin stated that Sandberg’s selection of her products was independent from her 3C membership.

Salil Gandhi is a board member and runs a Chicago-based digital marketing agency called SBO Buzz. According to him, the group was a useful platform for entrepreneurs in small businesses. the Covid pandemicThis includes offering regular Zoom happy hours for up to 30 small business owners in order to get to know each other better.

Gandhi stated that Gandhi would have an informal gathering with his friends to share our problems, PPP and other issues as small-business owners. Many of those I had the pleasure to meet through that program are still my friends.”

Gandhi stated that he does not mind the fact that small-business advocacy groups are financed mainly by large tech firms because many small businesses rely on Google and other companies for tools, such as Gmail accounts. He said, “When I view issues, I see them from my point of view.” “It’s never like anyone is ever telling me what or how to speak.”

Alfred Mai (Council member) founded ASM Games in 2017 with his wife. He said that he uses Amazon to sell his products, and he supports the group’s efforts against antitrust measures in Washington. It sells cards games, such as “These Cards Will Get You Drunk” or “Do You Really Know Your Family?” His business has enjoyed success thanks to Amazon, he says.

Mai stated that antitrust bills to “break up Big Tech” could have a serious impact on my business. It’s not just about Big Tech. This really does concern small business.

He expressed concern about the unintended effects of Congress’s actions and that Amazon may be forced to close its third-party marketplace website, which he uses for selling his cards games.

Mai stated, “I am not being brainwashed here by Amazon lobbyists telling me what to believe,” It is something I believe in.

 — CNBC’s Bria CousinsPaige Tortorelli This report was contributed by you.

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