Silicon Valley’s Big Apple Gambit

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Mark Lennihan/AP Photo

The Long Island Railroad storage yards and buildings at Hudson Yards on Manhattan’s West Side, seen here in April 2019. Amazon has signed a lease for new office space that will house more than 1,500 employees, less than a year after pulling out of a deal for a headquarters in Queens.

Last month, Representative Alexandria Ocasio-Cortez (D-NY) took a well-deserved victory lap after Amazon announced it would be opening new corporate offices in New York City, months after it pulled out of opening a second headquarters in the area. Local leaders criticized the $3 billion in subsidies (at least) Amazon stood to gain for locating the headquarters, known as HQ2, in Long Island City, Queens, near AOC’s district. The new offices, while bringing fewer jobs to New York (about 1,500 compared with an estimated 25,000 in HQ2), will not cost the city anything in economic-development subsidies. Amazon begged off any of the special tax credits and grants that it previously was offered.

“Waiting on the haters to apologize after we were proven right on Amazon and saved the public billions,” AOC tweeted on the news.

But Amazon may still make out like bandits in the end. The new office space, in the Hudson Yards neighborhood on the West Side of Manhattan, joins other tech giants like Google, Apple, and Facebook, all of which are planning or have already moved into new digs on the West Side. That happens to be the district of House Judiciary Committee Chair Jerrold Nadler (D-NY). And his committee is currently investigating all four of those tech firms for antitrust violations and anti-competitive behavior.

This is an old strategy tech has picked up from other corporate giants: If you bring jobs to an area, maybe lawmakers will become friendlier to your interests. There’s a reason that large weapons systems rely on parts manufactured in practically every congressional district. Nadler will now have to weigh following the law and promoting competition that benefits workers, entrepreneurs, and society with the thousands of jobs at home. Turning the West Side into the next Silicon Valley, in other words, must be seen as part of the political fortress Big Tech wants to build around its practices.

Nadler won the Judiciary Committee ranking slot at the end of 2017, after the late John Conyers resigned from Congress. He beat out Representative Zoe Lofgren (D-CA), who represents part of Silicon Valley, including most of the tech hub of San Jose, where Google is building a mega-campus. Lofgren’s defeat meant that Big Tech needed to establish a beachhead to influence the new Judiciary Committee chair. And they went right to work.

New York City is a good spot for tech firms to relocate anyway, with its large, well-educated workforce. The whole idea that New York needed to lure Amazon or any tech firm with billions of dollars never made sense. But there’s plenty of real estate in the five boroughs, all accessible by public transit. The fact that Big Tech has clustered on the West Side is a little suspicious.

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The same day that Amazon announced it would lease 335,000 square feet of office space in Hudson Yards, a large development on the far west edge of Manhattan between 30th and 33rd Streets, Facebook announced it was in talks to put in 700,000 square feet of space in the Farley Building, a former post office across from Penn Station. That’s on top of the 1.5 million square feet Facebook already has planned for Hudson Yards, which has drawn several other tenants.

Joining these two along the Hudson River are Google, which expects to house 8,000 employees in Chelsea and Greenwich Village by 2022, and Apple, which has inquired about properties in the Flatiron District and Hudson Yards. (Apple already has some existing office space in the Flatiron area.) LinkedIn, a division of Microsoft, also has an office in the Empire State Building, which they are in the midst of expanding.

According to The New York Times, Amazon, Apple, Facebook, and Google should have over 20,000 employees in nine different locations on the West Side by 2022. Total tech jobs in New York City, including businesses that partner with (or will soon by purchased by) the Big Four, have jumped to 142,600, up 80 percent over the past decade. This isn’t quite to the level of Silicon Valley or Seattle, but it’s a significant and growing number.

All of the Big Four’s offices sit inside Nadler’s congressional district. And the House Judiciary Committee, which Nadler chairs, has its eye on the Big Four. The House Antitrust Subcommittee, led by chair David Cicilline (D-RI), initiated historic hearings on the tech industry last June. Officials from the top tech firms have all testified, and thousands of pages of documents have been gathered.

Turning the West Side into the next Silicon Valley must be seen as part of the political fortress Big Tech wants to build around its practices.

This is the most wide-reaching antitrust investigation in decades. The endgame could be new laws, a damning report that spurs enforcement at the state or federal level, or some other hardship on Big Tech’s profits. It signals that the free ride in Washington is over. So it’s a good time for the tech behemoths to place a bunch of workers in the district of the man who will ultimately decide the direction of any investigation. While Cicilline runs the subcommittee, Nadler will clearly have some say in the matter.

Nadler has been quite supportive of the investigation. His name appears on the committee’s September document request to the major firms. In a November hearing, he said, “There is growing evidence that a handful of dominant platforms now control key arteries of online commerce, content, and communications,” calling out Google, Facebook, and Amazon by name. There is no indication whatsoever that Nadler has been influenced by the new tech rush into his district, although he did note that the investigation would serve as “the beginning of a long process,” and of course delay assists Big Tech. Nadler’s office did not respond to a request for comment.

But whether it works or not is an open question; there’s less unpredictability about Big Tech’s strategy. “It’s very concerning,” says Sally Hubbard, director of enforcement strategy at the Open Markets Institute. “[Nadler] is one of the members of Congress who’s on this issue and doing something about it. That’s 20,000 new voters in his district that are employees of the industry he’s trying to rein in.”

Progressive groups that have taken on Big Tech are girding for battle. David Segal, executive director of Demand Progress Education Fund, tells the Prospect, “Activists and the broader public are going to have to step up and help Nadler continue to stand strong in the context of extraordinary pressure Silicon Valley is likely to put on him and his colleagues.”

We’ve seen the tech giants play the influence game through lobbying, purchasing academic papers, creating astroturf organizations, and sheer persistence. Of course placing jobs in the districts of powerful politicians—and implicitly threatening the end of those jobs in the event of a crackdown—would be on the menu.