King's College London

Despite the impressive amount of empirical research on lobbying, a fundamental question remains overlooked. How do interest groups choose to lobby different sides of an issue? We argue that how groups choose sides is a function of firm-level economic activity. By studying a highly salient regulatory issue, the EU’s General Data Protection Regulation, and using a novel dataset of lobbying, we reveal that a group’s main economic sector matters most. Firms operating in finance and retail face unique costs and are incentivized to lobby against the GDPR. However, these groups are outgunned by a large, heterogeneous group of firms with superior
lobbying firepower on the other side of the issue.