Tuesday, April 23, 2013

Google Replaces UK Tax With Google Tax

There is nothing more arrogant than a corporation that believes it is beyond the law and beyond common morality.

Usually deft in his public performances, Google's Chair Eric Schmidt showed the sheer arrogance of monopolies today as he dismissed the company's extreme measures to avoid taxes in the UK (the company pays £6m corporation tax on £2.6bn profits according to The Independent).

Now, you could take this for American hubris, but this is a guy that has been 'appointed' to advise our UK government. This shows the utter naivety of our politicians and their instinct to kowtow to money.

What's more, Schmidt's reason for dismissing Google's tax avoidance in the UK was that they help UK startups. What ? I spend my life in UK startups and Google has done nothing of the sort.

Actually, the opposite it true. If you want to start a company in the UK now, you have to pay taxes to the government and you have to pay a higher tax to Google, since they have a total monopoly over online advertising in the UK by any definition of the word 'monopoly' and, as a small business you cannot get off the ground without online advertising and this is totally controlled by Google.

Yes, not only do Google not pay tax in the UK, they have replaced the tax mechanism with their own.

In any normal market you could select where to advertise and spend your money with the most cost effective medium. In the UK, Google has 91% market share for search, and 44% of all digital marketing revenue (much more if you're a small business since only a limited number of publishers will deal with you). I'm sure that many would argue that this is because their products are so good. But Google is totally untransparent on its core monopoly revenue model (it does not publish what it pays to publishers and keeps for itself) and is using this to attempt to build, or has already built, equivalent positions in mobile operating systems, maps, video management and even document production.

There is nothing holding back British business more than Google. They employ a few people here, but they suck massive amounts of advertising that used to go to local newspapers and British based directories and publishing business. They have imposed a tax on most business and driven businesses onto their knees all over the UK, and prevent any UK firm from ever competing since UK companies have to, er, pay tax.

My own company competes with Google and we pay 21% corporation tax on top of, yes, helping UK businesses get off the ground, employing people and paying NI and PAYE.

So, imagine trying to take on someone three hundred times the size of you with both your arms broken. That is what our Government is enabling Google to do to UK businesses. And for Eric Schmidt to be as arrogant about it shows how well they are getting away with it and what an arrogant idiot he is.

Do Evil seems to be their only motto these days.