Corporate lobbying in the European Union

Brussels, the lobbying capital of Europe. There are far more lobby businesses than public interest groups, and they have far greater means. Over 25.000 lobbyists work in Brussels, most of them at the service of big corporations (Hoedeman, 2018). Since 2015, the budget of the 50 biggest multinationals that lobby European policymakers has increased by 30 million dollars (LobbyControl, 2022). Especially big-tech companies have accounted for a big increase in both lobbyists and available budgets (Lombardi, 2022). Corporate lobbying is a process by which corporations seek to influence policy-making and decision-making in EU institutions. This can take many forms, including direct lobbying of EU officials and policymakers, funding political campaigns and think tanks, and sponsoring events and conferences.

Corporate lobbying is often considered a controversial activity. On the one hand, critics argue that it gives corporations undue influence over policy-making, and can result in policies that benefit corporations at the expense of the public interest (Mulcahy, 2015, p. 16; Corporate Europe Observatory, 2022). Proponents of corporate lobbying, on the other hand, argue that it is an essential part of the democratic process, allowing corporations to express their views and concerns to policymakers and to ensure that their interests are taken into account (Coen et al., 2021). The question that this article addresses is to what extent corporate lobbying impacts European policymaking. 

Corporate lobbying is often seen as undemocratic and non-transparent. Promoting corporate interests can be concerning when it comes to issues such as environmental protection, consumer safety, and public health, where they may clash with the broader public interest (Lawton et al., 2013). Another concern with corporate lobbying is that it can result in undue influence and access to policymakers, which can undermine the democratic process (Hanegraaff & Poletti, 2021, p. 849; Riekeles, 2022). Large corporations often have greater resources and a stronger presence in Brussels than smaller organisations or citizen groups, which can make it more difficult for these groups to have their voices heard (Hanegraaff & Poletti, 2021, p. 839). Furthermore, there are concerns about the lack of transparency and accountability in corporate lobbying, which can hinder the tracking of the influence that corporations have over EU decision-making. 

The tobacco lobby

One of the main concerns with corporate lobbying is that it can lead to policies that prioritise the interests of corporations over the public interest, as can be seen for example with the influence of the tobacco industry (Peeters et al, 2015, p. 108). The ‘2014 European tobacco products directive’ was targeted by lobbyists of the tobacco industry on a vast scale, causing delays in the implementation process (Doward, 2013; Peeters et al., 2015, p. 114). In this case, tobacco companies highlighted the economic consequences to shift the discussion from health to economics, not benefiting the public interest but rather the companies themselves (Peeters et al., 2015, p. 112). In 2020, Corporate Europe Observatory released a report in which it argued that the European Commission is failing to implement its obligations to protect public health decision-making from tobacco industry influence (Corporate Europe Observatory, 2020). The EU has an obligation to protect public health decision-making due to the signing of the UN’s 2005 tobacco treaty (UNFCTC), where it is agreed upon that governments should avoid  tobacco industry influence by only contacting the necessary amount with it , just enough to regulate the industry.  The report revealed that only the Health Department of the Commission enforces the treaty, whereas all other Commission’s Departments fail to do so (Hoedeman, 2020). 

The Volkswagen case

Another high-profile example of the negative impact of corporate lobbying in the EU is the Volkswagen emissions scandal. In 2015, it became public that German car-manufacturer Volkswagen deliberately programmed their diesel engines to control emissions during testing, showing lower emissions in a lab setting. In reality, the engines emitted up to 40 times more nitrogen than the company said they did (Hotten, 2015; Topham et al., 2018). The European Commission has been working on changing the emission tests since 2011, knowing car manufacturers were vastly exceeding norms (Weiss et al., 2011). During the design of the new tests, the European Automobile Manufacturers’ Association, or ACEA, started a lobby targeting stricter emission tests. Leaked documents showed how the ACEA met with the European Commission (EC) and therefore had inside information from the EC regarding the draft proposal (ACEA, 2015; Corporate Europe Observatory, 2016). 

During an informal weekend meeting, one of ACEA’s lobbyists met with the Policy Officer of the Commission’s Automotive Industry Unit, presenting the lobbying strategy to tackle stricter regulations. Needless to say, informal meetings between the regulator and the one being regulated are against all transparency guidelines. According to Corporate Europe Observatory (2016):

The information shared was not only highly valuable to ACEA, revealing sensitive issues related to the timing of the test introduction and ‘conformity factors’ (ie by what factor will industry be able to exceed any limits), it also undermined the Commission’s public position at that time.

Regulating EU lobbying

Both cases show that the corporate lobby is influential and lacks transparency. In response to these concerns, there have been calls for greater regulation and oversight of corporate lobbying in the EU (Tidey, 2022; Lynch, 2022). This has led to the introduction of measures such as the transparency register, which requires lobbyists to disclose their activities and the people they speak with. The register was implemented as a means to increase transparency and accountability for the EC and the EP. In 2021, the rules of the register were changed making registration for the register mandatory (European Council, 2021). It is, however, debatable how effective the register is. It is only mandatory to register for interest representation when meeting with officials of the EC, EP or EUCO. Registration for other institutions is still voluntary (Keating, 2017). 

Secondly, there is the EU’s code of conduct, which sets out ethical standards for lobbying. It is part of the transparency register and was implemented in 2008, aiming to provide a framework to which lobbyists have to adhere (European Parliament, 2023). The code also requires lobbyists and interest groups to disclose their clients and to refrain from offering or accepting any gifts, favours or hospitality that could influence their work.

Despite the introduction of stricter regulation, concerns about the impact of corporate lobbying in the EU still exist, for example with the European Ombudsman (European Ombudsman, 2016). Some argue that the transparency register is not effective enough, whereas others argue that the code of conduct for lobbyists is not sufficiently enforceable, as there are no sanctions for lobbyists who breach the code.

In response to these concerns, there have been constant calls for stricter regulation of lobbying in the EU. Whereas the EP voted for mandatory registration for lobbyists, it became apparent that the register is full of mistakes (Nilsen, 2020; Nilsen, 2023). The biggest one: the register is not legally binding, resulting in more suspicious entries. Because it is not legally binding, there are no sanctions should one breach ethical standards. Others have called for greater transparency around the funding of political campaigns and think tanks to reduce the influence of corporate money in the policy-making process, something the Commission is planning to implement before the 2024 elections (European Council, 2022).

Conclusion

In conclusion, it seems that the corporate lobby in the EU is effective for corporations. The tobacco lobby as well as the Volkswagen case show that, in both cases, there is a significant input in the policy-making and decision-making process, resulting in policies that do not always serve the public interest. Overall, there is an ongoing debate about the appropriate balance between allowing corporations to express their views and concerns to policymakers and ensuring that the public interest is protected in the policy-making process. As such, the issue of corporate lobbying in the EU is likely to remain a topic of discussion and debate for some time to come.

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