13 ms·

Google now pays more money in EU fines than it pays in taxes

218 points by chatmasta 8y ago

eberkund 8y ago
They need to make these fines "per user". It shouldn't be the case that for a company sufficiently large that a few billion in fines is simply another cost of doing business.
- pzone 8y ago
  I believe the number of users affected is one of the factors considered at the time the fines are levied. The EU seems to be happy to substitute fines for taxes, so companies treating them the same way isn't too surprising. Structure your activities to avoid {fines, taxes} as much as possible, but at some level they are unavoidable.
  - simion314 8y ago
    >The EU seems to be happy to substitute fines for taxes, When I think at EU fines I think At MS, Intel and Google, in all this cases this companies abused the markets. Can you provide a citation of a company getting a big fine but that did everything legally?
kodablah 8y ago
At the end of the day, Google probably doesn't differentiate the two very much as they're both costs of doing business. I would expect Google to work in its interest to reduce these impositions (taxes, laws+fines, etc) where they can, but we shouldn't pretend the punitive value of fines is more than a cost calculation to them. We also shouldn't pretend that the EU justification for fines is purely about citizen protection, they see this as a "tax" as well (though that is of course not their primary motivation). Otherwise, they would work harder on non-punitive approaches towards combating the ills of Google and the like. One would hope education and encouragement of alternatives and other positive-leaning approaches might be prioritized over a gavel.
- jplayer01 8y ago
  Works for me. If Google is happy to avoid taxes however they can, we should be extracting as much out of them as we can in other ways, such as fines. Not sure why we should be content with them not giving a shit about anything but themselves. Companies like Google only act out of pure greed. They don't respond to "positive reinforcement" and "education". They know perfectly well how to pay more in taxes, it's the default - they go out of their way to avoid it. They pay millions, tens of millions to lawyers to make sure they do exploit whatever loopholes there are. They aren't passive, innocent actors here.
  - simion314 8y ago
    What we need is to have this things move faster, if Google, FB or other company does some illegal stuff or abuses the users, reach a decision fast(in a few weeks) not in years.
    - ocdtrekkie 8y ago
      As much as I hate the painful wait to see action on these fronts, I understand the desire to be careful and cautious before potentially irreparably destroying a business. But the penalties need to affect the decisionmakers personally. If Sundar Pichai was risking jail time to abuse Google's power, you'd better believe it wouldn't happen.
      - simion314 8y ago
        It is complicated, imagine EU putting some american CEO in prison.
        ocdtrekkie 8y ago
        I would be fine with the American government actually putting American CEOs in prison too. ;) But even without the international extradition type problems, there are still a lot of problems, as we consider most of the wrongdoings these corporations are committing to be civil violations, and no matter how many people they harm, as long as they aren't treated as criminal, we can't put someone in jail for them. I do feel this is a major problem though, as CEOs aren't realistically punished for corporate misdeeds that can cause massive, wide-ranging harm. Even if the CEO screws up badly enough to lose his job, he'll get a job being a CEO somewhere else.
autokad 8y ago
the EU uses fines as a way of levying tariffs without explicitly being called out for it.
- iagooar 8y ago
  The EU has some rules that companies need to follow, same as any other democratic country does. Like it or not, EU regulation usually does a good job at protecting consumers from untamed companies, as happens in other places.
- shaki-dora 8y ago
  I'm glad this jingoistic talking point is appearing less and less these days. Because I got tired of repeating the following: If you actually sum up the fines levied by the EU, aggregated by continent, you will find they almost perfectly each region's respective revenue in the EU. The only exception is that Asia is fined somewhat more than to be expected, and the US less. This is probably due to the US' strong enforcement catching and/or discouraging behaviour before it gets to the level where the EU would intervene. Conversely, it shows a somewhat less developed corporate culture in some Asian countries.
c8g 8y ago
Another source of income :)
ocdtrekkie 8y ago
This is hardly surprising given Google's tendency to evade taxes and exploit loopholes in taxation of international corporations.
- kgwxd 8y ago
  Do they evade taxes or just avoid them?
  - TheTruth321 8y ago
    Did you have sex with that lady, or did she just give you a blow job?
    - kgwxd 8y ago
      More like "did you rape that lady or was it consensual?"
      - TheTruth321 8y ago
        Legally. Yes. Morally. No.
- hcnews 8y ago
  So if Google paid more taxes than necessary (legal loopholes), there would be no fines (for bad privacy etc.)? That sounds wrong. I don't support the legal tax loopholes but don't think there should be much relation between legal taxes and fines for bad practices (unless ofcourse the bad practice is illegal tax evasion).
  - chriswarbo 8y ago
    > So if Google paid more taxes than necessary (legal loopholes), there would be no fines (for bad privacy etc.)? That sounds wrong. I doubt there would be no fines; but if Google were paying a "fair" amount of taxes then there would be less of an adversarial relationship with governments: huge fines would be like harming the goose that lays golden eggs. With Google's current tax avoidance/evasion they're just a regular, tasty-looking goose.
sidibe 8y ago
The EU allows a couple of its countries to act as tax havens. Ireland and the Netherlands are probably pretty pleased that EU citizens seem to direct all their outrage at the companies that do the obvious thing instead of at their tax laws.
- matthewmacleod 8y ago
  I'm not sure that's really true – the EU has been fighting the "Double Irish" arrangement for some time.
- rb808 8y ago
  You should check out the tax havens in the US before complaining about EU. Wyoming, Nevada etc https://www.bloomberg.com/news/articles/2016-01-27/the-world-s-favorite-new-tax-haven-is-the-united-states https://www.bloomberg.com/news/articles/2016-01-27/the-world...
  - sidibe 8y ago
    I'm not complaining about the EU or comparing with US, I'm just pointing out that if the rage many EU citizens feel about the taxes of large corporations should be addressed by the EU somehow instead of hoping companies start paying some moral amount of taxes.
- aboutruby 8y ago
  There will always be better countries to pay taxes in. So that even if one country "fixes" its laws, another country becomes the alternative.
- rorykoehler 8y ago
  It's not really that straight forward. With the Euro another dimension is thrown into the mix due to the effects of the extreme export competitiveness disparities that exist within the single monetary areas.
visarga 8y ago
For a second I thought they revived "Google Now".
supabure 8y ago
Google pays taxes ? Are you joking man ? Google, Starbucks, Facebook and Amazon are biggest tax frauds in EU.
snidane 8y ago
It clearly shows how the tax system based on taking a cut from profits is totally leaky and should be abandoned. It only results in endless cat and mouse game of tax consultants (the big 4) finding loopholes in such tax systems against governments trying to plug the holes, just with much smaller budget and efficiency than the tax-evasion consulting armies. There are other models of tax systems. Some are even not production and consumption based (you want to maximize production and consumption for growth, not stifle it with taxes). For example land taxation proposed by single-tax movement or monopoly based taxation in general. Ie. for providing a company the privilege to be a monopoly on a market, it needs to pay a fee to those guaranteeing such privileges, which is the state. For example big pharma lobbied for its monopoly and now it is super hard for competitors to enter the market. Let these companies pay a monopoly tax for such privileges. Other example. Somebody appropriates for himself a valuable piece of land with oil deposits. He prevents others from utilizing that land. Let him pay for having that exclusive rights of use, since clearly the government is providing private property related services (police, courts and army to guarantee his property) for him that others (non-owners) are not getting.
- microcolonel 8y ago
  In my humble opinion, this has more to do with the tremendous, ever-growing cost of the EU and its member governments; as well as a lack of protective principles in their legal systems. These rulings seem to show them retroactively interpreting and applying laws which would be too vague to enforce in the U.S. The EU's courts seem so abusive and vague that there is virtually no way to avoid running afoul of them if you do any profitable business, even completely within a reasonable interpretation of the rules.
  - robin_reala 8y ago
    I mean, your second sentence is not even remotely true. You’re implying that the chance of being sued by the EU is near 100% for every profitable business in the EU.
    - microcolonel 8y ago
crushcrashcrush 8y ago
This will continue until we fix taxes globally.
writepub 8y ago
Completely disingenuous representation. ALL of EU has Value Added Taxation, that takes money from every transaction to/from corps. For instance, buying ads on Google would automatically incur these taxes. What EU really wants is double/triple taxation where: 1. They tax your transactions as VAT 2. Income post these taxes are counted as revenues, and costs (excluding VAT) are deducted to calculate profits. 3. Profits from #2 are further subject to corp. income taxes. This article would be half genuine if they listed the VAT dollar amounts Google has raised for the EU
- shaki-dora 8y ago
  First of all, VAT is collected by the vendor. But the entity actually taxed is the customer. That's why VAT is an explicit line item on any bill. Second, almost all customers of Google Ads are businesses, with the resultant right get refunds for any VAT paid. Third, because of [second], most customers likely take a shortcut: if you add your VAT registration number to your account, Google does not even charge VAT.
  - writepub 8y ago
    > First of all, VAT is collected by the vendor VAT is collected by the government. Just because VAT appears as a line item on a bill, doesn't mean the vendor gets to book that as revenues. > Second, almost all customers of Google Ads are businesses, with the resultant right get refunds for any VAT paid. You mean, the business itself might charge a VAT from it's customer, and deduct the VAT it pays to vendors as "cost" during taxation. There are NO REFUNDS of VAT from the government!! > if you add your VAT registration number to your account, Google does not even charge VAT. Doesn't mean the transaction has 0% VAT fee, the EU/government GETS it's VAT on valid transactions, one way or another. If you somehow avoid VAT reaching the government, you're violating the law! AND, Google is NOT the beneficiary of VAT, regulation typically requires a seller to charge VAT and pass it on to the government. Let's talk VAT numbers the EU gets from Google (as both a seller, buyer), and income taxes paid by GOOG employees before demonizing them
    - notahacker 8y ago
ciupicri 8y ago
> The owner of this website (www.computing.co.uk) has banned the country or region your IP address is in (RO) from accessing this website.
YetAnotherNick 8y ago
I really wonder what will happen if Google/Facebook becomes unprofitable in EU due to regulations? It's clear that these companies work on user data and will not gain enough data/users/money if it is paid, specially social networking sites. Will they block it like China for exactly the opposite reason?
- greycol 8y ago
  The interesting part about this is both google and facebook rely on network effects to ensure that they offer better services than competitors. Even running at a loss may be worth them continuing to run in the EU to stop the rise of competitors and to keep the better service that having more users grants them.
deleted 8y ago
[deleted]
qqn 8y ago
"Create an account" wall to read more than the headline, nice. Shimmying around this led me to https://www.reddit.com/r/technology/comments/ansfle/google_now_pays_more_money_in_eu_fines_than_it https://www.reddit.com/r/technology/comments/ansfle/google_n..., where the commenting just made my day: - "So I get what the EU is trying to do with these regulations, but this basically just means Google is paying to break the law at this point." - "Any law punishable only by fine is legal for the rich." - "At least it can deduct the fines off its taxable income."

218 points by chatmasta 8y ago

They need to make these fines "per user". It shouldn't be the case that for a company sufficiently large that a few billion in fines is simply another cost of doing business.

pzone 8y ago
I believe the number of users affected is one of the factors considered at the time the fines are levied. The EU seems to be happy to substitute fines for taxes, so companies treating them the same way isn't too surprising. Structure your activities to avoid {fines, taxes} as much as possible, but at some level they are unavoidable.
- simion314 8y ago
  >The EU seems to be happy to substitute fines for taxes, When I think at EU fines I think At MS, Intel and Google, in all this cases this companies abused the markets. Can you provide a citation of a company getting a big fine but that did everything legally?

kodablah 8y ago

At the end of the day, Google probably doesn't differentiate the two very much as they're both costs of doing business. I would expect Google to work in its interest to reduce these impositions (taxes, laws+fines, etc) where they can, but we shouldn't pretend the punitive value of fines is more than a cost calculation to them. We also shouldn't pretend that the EU justification for fines is purely about citizen protection, they see this as a "tax" as well (though that is of course not their primary motivation). Otherwise, they would work harder on non-punitive approaches towards combating the ills of Google and the like. One would hope education and encouragement of alternatives and other positive-leaning approaches might be prioritized over a gavel.

jplayer01 8y ago
Works for me. If Google is happy to avoid taxes however they can, we should be extracting as much out of them as we can in other ways, such as fines. Not sure why we should be content with them not giving a shit about anything but themselves. Companies like Google only act out of pure greed. They don't respond to "positive reinforcement" and "education". They know perfectly well how to pay more in taxes, it's the default - they go out of their way to avoid it. They pay millions, tens of millions to lawyers to make sure they do exploit whatever loopholes there are. They aren't passive, innocent actors here.
- simion314 8y ago
  What we need is to have this things move faster, if Google, FB or other company does some illegal stuff or abuses the users, reach a decision fast(in a few weeks) not in years.
  - ocdtrekkie 8y ago
    As much as I hate the painful wait to see action on these fronts, I understand the desire to be careful and cautious before potentially irreparably destroying a business. But the penalties need to affect the decisionmakers personally. If Sundar Pichai was risking jail time to abuse Google's power, you'd better believe it wouldn't happen.
    - simion314 8y ago
      It is complicated, imagine EU putting some american CEO in prison.
      - ocdtrekkie 8y ago
        I would be fine with the American government actually putting American CEOs in prison too. ;) But even without the international extradition type problems, there are still a lot of problems, as we consider most of the wrongdoings these corporations are committing to be civil violations, and no matter how many people they harm, as long as they aren't treated as criminal, we can't put someone in jail for them. I do feel this is a major problem though, as CEOs aren't realistically punished for corporate misdeeds that can cause massive, wide-ranging harm. Even if the CEO screws up badly enough to lose his job, he'll get a job being a CEO somewhere else.

autokad 8y ago

the EU uses fines as a way of levying tariffs without explicitly being called out for it.

iagooar 8y ago
The EU has some rules that companies need to follow, same as any other democratic country does. Like it or not, EU regulation usually does a good job at protecting consumers from untamed companies, as happens in other places.
shaki-dora 8y ago
I'm glad this jingoistic talking point is appearing less and less these days. Because I got tired of repeating the following: If you actually sum up the fines levied by the EU, aggregated by continent, you will find they almost perfectly each region's respective revenue in the EU. The only exception is that Asia is fined somewhat more than to be expected, and the US less. This is probably due to the US' strong enforcement catching and/or discouraging behaviour before it gets to the level where the EU would intervene. Conversely, it shows a somewhat less developed corporate culture in some Asian countries.

c8g 8y ago

Another source of income :)

ocdtrekkie 8y ago

This is hardly surprising given Google's tendency to evade taxes and exploit loopholes in taxation of international corporations.

kgwxd 8y ago
Do they evade taxes or just avoid them?
- TheTruth321 8y ago
  Did you have sex with that lady, or did she just give you a blow job?
  - kgwxd 8y ago
    More like "did you rape that lady or was it consensual?"
    - TheTruth321 8y ago
      Legally. Yes. Morally. No.
hcnews 8y ago
So if Google paid more taxes than necessary (legal loopholes), there would be no fines (for bad privacy etc.)? That sounds wrong. I don't support the legal tax loopholes but don't think there should be much relation between legal taxes and fines for bad practices (unless ofcourse the bad practice is illegal tax evasion).
- chriswarbo 8y ago
  > So if Google paid more taxes than necessary (legal loopholes), there would be no fines (for bad privacy etc.)? That sounds wrong. I doubt there would be no fines; but if Google were paying a "fair" amount of taxes then there would be less of an adversarial relationship with governments: huge fines would be like harming the goose that lays golden eggs. With Google's current tax avoidance/evasion they're just a regular, tasty-looking goose.

sidibe 8y ago

The EU allows a couple of its countries to act as tax havens. Ireland and the Netherlands are probably pretty pleased that EU citizens seem to direct all their outrage at the companies that do the obvious thing instead of at their tax laws.

matthewmacleod 8y ago
I'm not sure that's really true – the EU has been fighting the "Double Irish" arrangement for some time.
rb808 8y ago
You should check out the tax havens in the US before complaining about EU. Wyoming, Nevada etc https://www.bloomberg.com/news/articles/2016-01-27/the-world-s-favorite-new-tax-haven-is-the-united-states https://www.bloomberg.com/news/articles/2016-01-27/the-world...
- sidibe 8y ago
  I'm not complaining about the EU or comparing with US, I'm just pointing out that if the rage many EU citizens feel about the taxes of large corporations should be addressed by the EU somehow instead of hoping companies start paying some moral amount of taxes.
aboutruby 8y ago
There will always be better countries to pay taxes in. So that even if one country "fixes" its laws, another country becomes the alternative.
rorykoehler 8y ago
It's not really that straight forward. With the Euro another dimension is thrown into the mix due to the effects of the extreme export competitiveness disparities that exist within the single monetary areas.

visarga 8y ago

For a second I thought they revived "Google Now".

supabure 8y ago

Google pays taxes ? Are you joking man ? Google, Starbucks, Facebook and Amazon are biggest tax frauds in EU.

snidane 8y ago

It clearly shows how the tax system based on taking a cut from profits is totally leaky and should be abandoned. It only results in endless cat and mouse game of tax consultants (the big 4) finding loopholes in such tax systems against governments trying to plug the holes, just with much smaller budget and efficiency than the tax-evasion consulting armies. There are other models of tax systems. Some are even not production and consumption based (you want to maximize production and consumption for growth, not stifle it with taxes). For example land taxation proposed by single-tax movement or monopoly based taxation in general. Ie. for providing a company the privilege to be a monopoly on a market, it needs to pay a fee to those guaranteeing such privileges, which is the state. For example big pharma lobbied for its monopoly and now it is super hard for competitors to enter the market. Let these companies pay a monopoly tax for such privileges. Other example. Somebody appropriates for himself a valuable piece of land with oil deposits. He prevents others from utilizing that land. Let him pay for having that exclusive rights of use, since clearly the government is providing private property related services (police, courts and army to guarantee his property) for him that others (non-owners) are not getting.

microcolonel 8y ago
In my humble opinion, this has more to do with the tremendous, ever-growing cost of the EU and its member governments; as well as a lack of protective principles in their legal systems. These rulings seem to show them retroactively interpreting and applying laws which would be too vague to enforce in the U.S. The EU's courts seem so abusive and vague that there is virtually no way to avoid running afoul of them if you do any profitable business, even completely within a reasonable interpretation of the rules.
- robin_reala 8y ago
  I mean, your second sentence is not even remotely true. You’re implying that the chance of being sued by the EU is near 100% for every profitable business in the EU.
  - microcolonel 8y ago

crushcrashcrush 8y ago

This will continue until we fix taxes globally.

writepub 8y ago

Completely disingenuous representation. ALL of EU has Value Added Taxation, that takes money from every transaction to/from corps. For instance, buying ads on Google would automatically incur these taxes. What EU really wants is double/triple taxation where: 1. They tax your transactions as VAT 2. Income post these taxes are counted as revenues, and costs (excluding VAT) are deducted to calculate profits. 3. Profits from #2 are further subject to corp. income taxes. This article would be half genuine if they listed the VAT dollar amounts Google has raised for the EU

shaki-dora 8y ago
First of all, VAT is collected by the vendor. But the entity actually taxed is the customer. That's why VAT is an explicit line item on any bill. Second, almost all customers of Google Ads are businesses, with the resultant right get refunds for any VAT paid. Third, because of [second], most customers likely take a shortcut: if you add your VAT registration number to your account, Google does not even charge VAT.
- writepub 8y ago
  > First of all, VAT is collected by the vendor VAT is collected by the government. Just because VAT appears as a line item on a bill, doesn't mean the vendor gets to book that as revenues. > Second, almost all customers of Google Ads are businesses, with the resultant right get refunds for any VAT paid. You mean, the business itself might charge a VAT from it's customer, and deduct the VAT it pays to vendors as "cost" during taxation. There are NO REFUNDS of VAT from the government!! > if you add your VAT registration number to your account, Google does not even charge VAT. Doesn't mean the transaction has 0% VAT fee, the EU/government GETS it's VAT on valid transactions, one way or another. If you somehow avoid VAT reaching the government, you're violating the law! AND, Google is NOT the beneficiary of VAT, regulation typically requires a seller to charge VAT and pass it on to the government. Let's talk VAT numbers the EU gets from Google (as both a seller, buyer), and income taxes paid by GOOG employees before demonizing them
  - notahacker 8y ago

ciupicri 8y ago

> The owner of this website (www.computing.co.uk) has banned the country or region your IP address is in (RO) from accessing this website.

YetAnotherNick 8y ago

I really wonder what will happen if Google/Facebook becomes unprofitable in EU due to regulations? It's clear that these companies work on user data and will not gain enough data/users/money if it is paid, specially social networking sites. Will they block it like China for exactly the opposite reason?

greycol 8y ago
The interesting part about this is both google and facebook rely on network effects to ensure that they offer better services than competitors. Even running at a loss may be worth them continuing to run in the EU to stop the rise of competitors and to keep the better service that having more users grants them.

deleted 8y ago

[deleted]

qqn 8y ago

"Create an account" wall to read more than the headline, nice. Shimmying around this led me to https://www.reddit.com/r/technology/comments/ansfle/google_now_pays_more_money_in_eu_fines_than_it https://www.reddit.com/r/technology/comments/ansfle/google_n..., where the commenting just made my day: - "So I get what the EU is trying to do with these regulations, but this basically just means Google is paying to break the law at this point." - "Any law punishable only by fine is legal for the rich." - "At least it can deduct the fines off its taxable income."