Regulation

UK Election Puts Big Tech Digital Tax On Hold

A silver lining looms for Big Tech in the chaos that is Brexit.

As noted by Bloomberg last week, the December elections on deck for the U.K. have resulted in a delay for legislation that is now in draft form, which would include a provision to tax larger tech firms that derive sales from the region. The bill has proposed a 2 percent tax on revenues for firms as diverse as Facebook and Amazon.

“The Chancellor and Prime Minister agreed not to take forward the budget on [Nov. 6]. It is usual practice for the finance bill to follow a budget,” Bloomberg quoted a spokesman for Her Majesty’s Treasury.

If the budget does not progress through lawmakers’ chambers, the finance bill will not either. The bill would also include provisions that would limit the amount of capital losses firms can use to offset against profits.

Looking At First-Time Payments

Separately, but also in the U.K., lawmakers have recommended that there be a mandatory 24-hour waiting period for first-time payments between bank accounts. The moratorium would be aimed at reducing fraud, Reuters reported. The move comes as Parliament’s Treasury Select Committee has estimated that fraudsters stole as much as $777 million USD equivalent from consumers in the U.K. within the first six months of 2019.

“If a situation arose whereby an initial payment was needed instantly, a customer could ring their bank, and additional checks could be carried out for the funds to be released,” said the Committee.

In other mandates that target fraud, the recipient’s name must be verified before money transfers can be authorized by March 2020. On this effort, the Committee recommended that “if the implementation date of March 2020 begins to look in doubt, regulators should consider introducing sanctions — such as fines — to firms [that] have not met the deadline.”

The Committee said, too, that a voluntary code of conduct among financial services firms — which, among other things, refund consumers who are victimized by fraud — should be made mandatory.

In The States

Closer to home, and focused on data privacy, U.S. Senator Ron Wyden (D-OR) has proposed higher penalties on tech firms for violations — and jail time for executives if they are caught lying about protective measures.

The Wyden legislation, known as the “Mind Your Own Business Act,” debuted on Oct. 17, and would penalize firms as much as 4 percent of their revenue for first-time violations. In terms of prison time, according to CPO Magazine, sentences can range from 10 years to 20 years.

The magazine also noted that the Wyden-backed legislation would give enforcement power to state attorneys general. Before filing the action, those attorneys general must provide written notification to the Federal Trade Commission, which may then intervene and/or petition for an appeal in the suit.

Under the terms of the bill, according to Wyden, consumers would be able to control their own data, and companies must be transparent in how they use that data. It would also mandate a registry known as Do Not Track, tied to opting out of targeted ads.

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