The Golden Age Of Big Tech Is Coming To An End
Big tech’s days are numbered.
Yesterday, Google agreed to pay over $1 billion in fines and taxes to French authorities, settling a dispute over a financial fraud investigation France initiated four years ago. The French government had claimed that Google had failed to declare its activities in France as a means of avoiding the payment of French tax. So by settling the dispute rather than pushing its legal case further, Google has effectively agreed with the government’s argument. Not only that, but it has set a strong precedent for the future, one that doesn’t bode well for other big tech corporations.
Despite having to pay a one-time fine of €500 million and taxes of €465 million, Google has up until now contributed very little in tax in most European nations, largely because it reports almost all of its sales in the Republic of Ireland. The same story applies to most of the other FAANGs: Amazon paid corporation tax of only €16.5 million on EU revenues of €21.6 billion in 2016, Facebook paid the UK treasury £15.8 million in corporation tax in 2017 despite earning £1.3 billion in Britain, while Apple infamously benefitted from lax Irish tax laws between 2003 and 2014, when it paid corporation tax of only 0.005% on its annual European revenues.
However, the free ride big tech has enjoyed up until now has ended with the settlement between Google and France. In fact, the writing had already been on the wall for a couple of years prior to this settlement, given that the FAANGs had already begun making grudging admissions that they would likely have to pay more in corporation tax, regardless of where they’re legally headquartered.
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