Google: Evil is as Evil does.
May 17, 2013
Margaret Hodge, the doughty chairperson of the powerful Public Accounts Committee, told the executive in charge of Google's northern European operations that the company acts in a "devious, calculated" and "unethical" manner. She added that, despite its constant protestations to the contrary, the fact of the matter is that Google does indeed "Do Evil".
Mr. Brittin was recalled by MP's after he was accused by them of misleading the British Parliament in evidence he gave to the same committee in November 2012 when he said all the Google people working in the UK who are designated as "sales staff " are not, in fact, selling anything. At the hearing six months ago he said, "Nobody is selling", and added "Calling someone a 'sales rep' is not the issue here". The committee begged to differ and let the hapless Matt Brittin have it straight between the eyes.
This time around the Google exec tried to maintain the stance that everything Google in the UK does about tax is all above board and as transparent as crystal. But, caught time-after-time waffling and prevaricating, the executive eventually admitted that MPs, the man and woman in the street, advertisers and even some of the staff that Google employs in the UK solely to deal with sales to British advertisers might "get the impression" that they do negotiate and close deals within the UK itself. It's just that we are all wrong and Google is always right.
The response to that is that 99.9 per cent of humanity reckon that If it looks, like a duck, waddles like a duck and quacks like a duck, then it probably is a duck - even if Google would like them to believe the propaganda that it's a plate of spaghetti bolognese with a cherry on top.
Google maintains that UK sales do not actually take place in the UK but are "closed" and finalised in several other parts of the world and, in this case, mainly in Ireland. And this despite the fact Google's US top brass told investors that "sales from UK customers " topped £3 billion in value in 2011 alone. Google paid just £6 million in corporation tax on that sum.
The MPs told Mr. Brittin that, since his earlier appearance before the committee, whistleblowers from within Google and without had come forward to provide detailed evidence refuting the company's claim that it makes no sales within the UK. Amongst the welter of documentation are pay slips showing UK-based sales staff being paid substantial bonuses on "sales".
Other documents show that major advertising clients, such as Argos, British Airways BT, eBay, Land Rover and the bank, Lloyds TSB, are routinely handled and serviced within the UK by UK staff. This evidence made the questioning even more trenchant and eventually Mr. Brittin admitted that while a "lot of the aspects of selling" do take place in the UK he remained adamant that the "closing of the transaction" takes place in Dublin.
Mr. Brittin further stated that Dublin is the epicentre of Google's biggest European presence. He said that 99 per cent of Google's advertising business is conducted via Dublin but did concede that the elusive remaining one per cent actually accounts for "between 60 and 70 per cent" of Google's UK HQ advertising revenues.
Sat next to Mr. Brittin throughout his two-hours of questioning was one of Google's top accountants, John Dixon of Ernst & Young. He arrogantly declined to help clear some of the fog surrounding Google's tax regime by citing the need to protect "client confidentiality - even though his client was sat in the next seat a foot away from him!
Lin Homer, chief executive of HM Revenue & Customs (HMRC), also gave evidence to the public accounts committee and said the understands and sympathises with public disquiet with the comparatively tiny amounts of tax that many Internet-based and Internet reliant companies pay.
Her performance did not impress Margaret Hodge who told Homer "I think your judgement belies common sense. We don't trust your judgement. I think your staff are being bamboozled."
And Homer's words did indeed ring hollow in the light of continuing revelations about the disparities in the ways HMRC treats small companies and some big ones. There have been far too many over-chummy and over-long lunches between tax collectors and tax payers and far too many leniencies, write-offs and so-called "sweetheart deals" done between the Revenue and some big corporations. Rumours abound and it is still far from clear why Vodafone, for example, ended up paying far less tax than, on first sight, it appeared it should be liable for.
Of course, to behave unethically is not to behave illegally and Google is operating within the letter, if not the spirit of existing UK tax laws. However Google was advised to go away to think again after being told that it will not wriggle off the hook this time and that legislation to curb its (and others) devious prctices may well be introduced.
The committee will next turn its sights on Amazon. It too will be called back to face MPs after recent revelations about its operation in Slough, England, cast into doubt its claims to make sales solely in Luxembourg.
Meanwhile, we can hope that Google will eventually be brought to account for its continued failure to implement removal requests from individuals and companies as required under the terms of the UK's Data Protection Act.
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