Regulation Roundup

In Europe, Taxes In Focus For Tech Giants

In Europe, Taxes In Focus For Tech Giants

Big Tech firms – Google and Amazon among them – are increasingly in the taxman’s crosshairs.

In the United Kingdom, for instance, lawmakers are reportedly introducing a digital services tax of as much as 2 percent of revenues tied to business activities in the country.

Sky News reported that the tax is slated to come into effect on April 1 of this year.  The government has estimated that the tax would bring additional income of as much as 515 million pounds to the government by the end of the fiscal year that ends in 2025.

The government has said the tax is aimed at “large multi-national enterprises with revenue derived from the provision of a social media service, a search engine or an online marketplace to U.K. users.”  That’s a roster that includes Google, Amazon and Facebook, of course.

Project Goldcrest

Separately, Amazon began arguments last week in European court, before a five-judge panel, against EU claims that it evaded taxes equivalent to $277 million USD. As reported by courthousenews.com, which tracked last week’s arguments, the eCommerce firm has countered arguments that it got a “sweetheart tax deal in a secret arrangement called Project Goldcrest.”

As reported, through that alleged tax scheme, Amazon shifted profits between subsidiaries (and passed those profits to its Luxembourg subsidiary) and was able to reduce profits that stemmed from Europe, reducing its liabilities. At the same time, the U.S. has said that Amazon owes $1.5 billion in taxes through the Luxembourg-focused activities.

Google in the Crosshairs

Separately, the Financial Times reported Monday (March 16) that a complaint has been lodged with the Irish data regulator against Google, by smaller web browser rival Brave, that Google has been obtaining its users’ consent for their personal data to be used, and then applying that consent to other services that are “invisible” to them. Brave’s complaint states that, in one example, consent to use location data might also be used for extensive or minor data sharing with an unknowable number of Google’s business partners,” and that the tech giant has infringed on GDPR mandates. The FT notes that the Irish regulator has at least two open investigations into how Google collects and uses data, with a focus on location data and advertising practices. As has been reported, GDPR breaches can result in firms being fined as much as 4 percent of their global top line.

In a statement relayed to the FT, an unnamed Google spokesperson said that “these repeated allegations from a commercial competitor don’t stand up to serious scrutiny. Twenty million users visit their Google Accounts each day to make choices about how Google processes their data. Our privacy policy and the explanations we provide users are clear about how data is stored and the choices users have.”

At the State Level

A bit closer to home, where state-level initiatives to pass data privacy laws have been gaining traction, Washington state lawmakers voted down the Washington Privacy Act, which would have let consumers demand that companies delete their data. But legislation did pass the state House and Senate that governs the use of facial recognition technologies. As VentureBeat reported, the bill mandates that government agencies disclose the use of facial recognition technologies, and the legislation also creates a task force to monitor whether that technology fosters discrimination against vulnerable technologies.

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