Google: Quick UK Trip to Explain a Method

May 18, 2013

I just returned from the UK. On my return I saw this news item: “Google’s Schmidt to Meet Britain’s Cameron as Tax Row Rages.” If the link goes dark, just run a query for “Google tax UK” and you will get some of the information. You can watch a video snippet at “Ed Miliband Accuses Google of Avoiding Fair Share of Tax” as of 6 am Eastern, May 18.

I watched a bit of the discussion between a UK elected official and a Googler on the telly before I had a wonderful flight back to the United States. I thought the discussion was one of those technical misunderstandings. I recall a phrase which suggested that Google was not communicating clearly. Wired Magazine, UK edition, ran this story: “MP to Google: You Do Evil When It Comes to Tax.”

As I understand the issue, Google pays what it owes within the boundaries of the regulations. The UK is struggling economically, which is evident in the number of folks who seem to be wandering about Hounslow without much to do at 10 30 am of a morning. My bus ride to Heathrow was an eye opener. The impression I had on the secondary streets to the airport was that High Street Kensington is different from the bus route from Hammersmith to Heathrow.

Wired said:

At a Public Accounts Committee hearing on 16 May, chairperson Margaret Hodges accused Google of “deliberately manipulating the reality of their business” and claimed to have whistleblower evidence that UK Google staff had sold advertising and invoiced UK-based customers. “You are a company that says you do no evil,” she told Google vice-president Matt Brittin. “I think that you do do evil in that you use smoke and mirrors to avoid paying tax.”

My view is that if rules and regulations exist, those rules must be followed. Some people are able to interpret the rules one way. Others see the rules differently. I think Google has its view of what is required, and the UK officials have another view.

If the quick trip by Google’s chairman is going to happen, will Google be able to explain its point of view and carry the day? My hunch is that there may be some further discussion about taxes which will require more than Google Glass to get the elected officials to see the world as Google perceives it.

Apparently millions of pounds are the point of the discussions. In my opinion, some countries do not understand how nation states should react to Google. Countries, in some situations, may be less influential than companies. Annoyed officials may be clinging to an outmoded view of what rules and regulations are supposed to do.

What’s clear is that Google’s comments reported on May 16, 2013, have sparked some phone calls and a possible meeting between the highest levels of the British government.

Quick actions such as buying Motorola and meeting with David Cameron can signal some of the consequences of quick thinking and even quicker actions. In my opinion, some countries and their officials don’t understand the Google systems and methods.

Stephen E Arnold, May 18, 2013


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