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Reining in the tech giants

Tech giants accused of not paying enough taxes, unfair competition

SAMAA | - Posted: Dec 13, 2020 | Last Updated: 1 month ago
SAMAA |
Posted: Dec 13, 2020 | Last Updated: 1 month ago
Reining in the tech giants

Photo: AFP

Tech giants have changed our daily lives, but governments around the world are worried that they are getting out of control.

Dubbed the GAFAM — Google, Apple, Facebook, Amazon and Microsoft — they are accused of not paying enough taxes, unfair competition, stealing media content and spreading fake news.

As the European Union prepares to present measures to rein them in on December 15, here is a global overview of the attempts to regulate the companies.

Taxation

The 27-nation EU has not yet agreed to tax the digital giants, but some of its member states have forged ahead.

France and Italy have imposed a three percent tax on their turnover, while Austria is imposing a five percent tax on their advertising revenues and Spain a three percent charge on some activities.

Outside the EU, Britain has imposed a two percent tax on some digital services.

Beyond Europe, in 2016 India imposed a tax on online advertising, while Australia slapped a 10 percent VAT rate on some digital services, such as streaming, downloading games and applications for mobile streaming, e-books and data storage.

These moves have fallen foul of the United States, the home of the digital giants. It has threatened tit-for-tat customs duties.

Negotiations on a worldwide tax on multinationals led by the Organisation for Economic Co-operation and Development broke down in October.

Nobbling competition

The digital giants are regularly criticised for dominating the market by elbowing out rivals.

The EU slapped 8.25 billion euros ($10 billion) in fines on Google between 2017 and 2019 for dominating the market via its Android system, which Google is now challenging in court. 

Microsoft was fined 561 million euros by the EU in 2013 for imposing its search engine Internet Explorer on users of Windows 7.

Amazon and Apple are also being probed for alleged violations of EU fair competition rules.

But the US is also acting on competition concerns, with US federal and state antitrust enforcers filing suits against Facebook on December 9 seeking to overturn its acquisitions of Instagram and WhatsApp.

In October the Justice Department and 11 states launched proceedings against Google, accusing it of having illegally strengthened its monopoly on online searches and advertising.

Personal data

Tech giants are regularly criticised over how they gather and use people’s personal data.

Brussels has led the charge to rein them in with its 2018 General Data Protection Regulation, which has since become an international reference.

They must ask for consent when they collect personal information, be transparent about how the data will be used, and allow users to delete the data, with failure to do so punishable by heavy fines.

Sanctions exist outside of Europe as well. A US court fined Facebook $5 billion in May for failing to protect its users’ personal data.

Fake news and hate speech

Social networks are often accused of failing to reign in misinformation and hate speech.

The European Parliament and member states agreed on Thursday to require digital platforms to remove terrorist content within one hour or face heavy fines.

Several national laws have also attempted to take on the problem of fake news.

In Germany social networks can face up to 50 million euros in fines if they fail to respond to requests to withdraw fake news, but also hate speech, terrorist propaganda and child pornography.

In France a political candidate or party can ask a court to stop the spread of “false information” during the three months before a national election.

In Kenya, publishing “false, misleading or fictional information” is punishable by a $50,000 fine and/or two years of prison.

These measures remain controversial, however, with critics saying they threaten freedom of speech.

Paying for content

GAFAM are accused by media outlets of making money from journalistic content without sharing the revenue.

To solve this the EU in 2019 imposed a form of copyright law called neighbouring rights that would allow outlets to demand compensation for use of their content on online platforms.

After initial resistance, Google signed agreements with French newspapers in November to pay for using their content, a world first.

In one of the most powerful moves to check the power of US digital giants, Australia also plans to compel the companies to pay media organisations when their platforms host their content or face millions of dollars in fines.

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