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Posts from the ‘Legal Troubles’ Category


Report: Indonesia plans to stick Google with a big bill for back taxes and fines


Indonesia’s tax agency plans to bill Alphabet Inc.’s Google unit for up to $380 million in back taxes and fines that the search giant allegedly owes from 2015.

Muhammad Haniv, head of the tax office’s special cases unit, said in an interview that a team of four tax investigators met with Google’s Indonesian unit Monday, the latest escalation in a growing dispute between government and the technology firm. He said they discussed the alleged back taxes and audit of the unit’s tax compliance records.

“If we take this case to court, Google could be fined four times the tax it owes us,” Mr. Haniv said. He added that Indonesia will also pursue taxes from as far back as 2011, when Google first established a presence in the country. “Now we are still investigating them,” he said.

Google is a very wealthy firm. It can afford to pay its fair share in taxes in all the countries where it does business — Indonesia included. The authorities there are to be commended for not letting mammoth firms like Google escape from their obligations by taking advantage of tax loopholes and other tax avoidance tricks. Time for the Monster of Mountain View to pay up!


French police raid Google’s Paris offices

Well, well:

French police raided Google’s offices in Paris Tuesday, looking for evidence of money laundering and tax evasion.

The state prosecutor said specialist anti-corruption officers and 25 tech experts took part in the search. They were trying to establish the scale of Google’s business in France and to determine whether it has paid enough taxes.

French officials began investigating Google last June, after the country’s financial authorities accused it of dodging taxes. The prosecutor’s office said Tuesday the preliminary inquiry is looking into “aggravated financial fraud” and “organized money laundering.”

We wish the French authorities the best as they complete their investigation.


Google beneficiary of sweetheart tax deal in the United Kingdom

Special treatment from the Monster of Mountain View from Her Majesty’s Government:

An agreement for US firm Google to pay £130m in UK back taxes has been labelled as “derisory” and a “sweetheart deal” by critics.

The payment covers money owed since 2005 and follows a six-year inquiry by Her Majesty’s Revenue and Customs.

George Osborne hailed it as “a victory” for the government, but Labour’s John McDonnell said the sums were “trivial”.

Meg Hillier, chair of the Commons Public Accounts Committee, said it was “a small amount of money” for Google.

The Tax Justice Network asserts that Google should be paying at least £200 million a year in taxes. The sum of £130 over ten years thus amounts to chump change for one of the world’s largest and most profitable technology companies.


Google facing increasing skepticism, hostility in Europe

Europeans are finally starting to wise up to the danger of allowing one company to dominate their lives online. From today’s New York Times cover story:

Across Europe, Google has been under fire, reflecting the broader challenges facing American technology companies. Google, fairly or not, has become a glaring proxy for criticism of an intrusive American government and concern over America’s unmatched technology dominance.

On Monday, things grew worse. Regulators pushed the company to give up more in an antitrust settlement — demanding that Google make additional changes to its secret sauce, the search algorithm.

When Google initially settled with regulators in February, it emerged largely unscathed, agreeing to make modest adjustments to its search formula and avoiding a fine. Now, the deal is in jeopardy. If Google does not acquiesce, regulators could toss out the settlement and bring formal charges, which could prompt billions of dollars in penalties and major changes to its operations.

It’s about time. Google has been cutting favorable deals for a long time to escape litigation to hold it accountable for its privacy breaches and monopolistic business practices. It sounds like regulators in Europe have had enough. Now, if only federal officials in the United States would follow suit.

Google, as several observers pointed out in the article, is no longer a startup with a cute search engine – it’s a mammoth company with aspirations to dominate the Internet. Its most important offering remains its search engine, but it has expanded into email, maps, document storage, domains, videos, and many other markets. It distributes its own browser, operating system, and smartphone platform. It offers one-stop shopping for the NSA, which many Europeans are now well aware of thanks to Edward Snowden’s revelations.

European regulators are smart to use what leverage they have to rein in the Monster of Mountain View. The time to act is now, before Google becomes an even greater threat to privacy and choice online than it already is.


Google using Bermuda shell company to dodge taxes

Do no evil…. pay no taxes….

Google is moving even more money through a shell corporation in Bermuda—reaching a total of €8.8 billion ($11.91 billion) in 2012, 25 percent more than it did in 2011. By employing a legal yet ethically questionable practice, Google is saving itself billions in taxes worldwide.

The new figures were first reported by the Financial Times on Friday, citing “[recent] filings by one of Google’s Dutch subsidiaries.” This widespread strategy of moving money around involves two specific tactics known as the “Dutch Sandwich” and the “Double Irish.” (Ars obtained a copy of this filing, dated September 27, 2013, from an anonymous source.)

As the Times concluded, these disclosures mean “that royalty payments made to Bermuda—where the company holds its non-US intellectual property—have doubled over the past three years. This increase reflects the rapid growth of Google’s global business.”

Google’s tax avoidance practices may be good for Google’s bottom line, but they are not responsible. Companies that claim to be good corporate citizens don’t use tax loopholes and accounting tricks to dodge taxes on a grand scale like Google and other tech giants do.

Google, of course, is only following in the footsteps of companies like Microsoft and Apple, which also distribute proprietary software and dodge state and federal taxes in the United States, plus taxes overseas. These feats of tax avoidance are made possible by rigged tax codes, which allow chief financial officers to get their companies out of tax obligations, to the detriment of society. Is it any wonder that income inequality has gotten so much worse over the past few years? Companies like Google are prosperous and powerful, but they don’t pay what they owe. That means regular folks are left to foot more of the bill for infrastructure investments that companies like Google wish to see made.

If Google wants college to be affordable, or for fiber to reach more Americans, it ought to pay its taxes without complaining or shuffling money through shell companies.


Google “Street View” car causes collision in Indonesia

Oops… big oops…

A Google Street View car hit two public transport buses and a truck in the city of Bogor, Indonesia.

Police said the car driver hit the first bus, appeared to “panic” when the bus driver responded angrily, and tried to drive off.

But in doing so the vehicle hit a second bus and then the truck, according to local media reports.

It is unclear whether anybody was hurt at the scene. Google has confirmed that an incident has taken place.

“We take incidents like this very seriously. We’re working closely with local authorities to address the situation,” Vishnu Mahmud, head of communications for Google in Indonesia, told news agency AFP.

Uh huh.

This car was apparently being driven by a human being, as opposed to being piloted by a computer, so it appears human error is to blame. Of course, humans write software, so self-driving cars are capable of crashing too… when and if that happens, it’s going to be really embarrassing for the Monster of Mountain View.


India launches antitrust investigation of Google

Good to see more regulatory scrutiny:

India’s antitrust regulator has launched a probe against Google Inc over alleged anti-competitive practices by the U.S. Internet search giant, following a complaint by a consumer advocacy group, a federal minister said on Monday.

The Competition Commission of India (CCI) has received information about contravention of an Indian competition rule by Google, R.P.N. Singh, minister of state for corporate affairs, told lawmakers in a written reply to a question, according to a government statement.

Google has already been subjected to antitrust probes in the United States and Europe.

The Monster of Mountain View has historically been dealt with very leniently by the United States federal government. European regulators have taken a much harder line with the company, especially when user privacy has been threatened. Google has also reportedly caught the attention of authorities in Argentina and Korea.

Since its launch more than a decade ago, Google has morphed into a very successful commercial version of the National Security Agency (NSA). The only reason it is viewed more favorably than the NSA is because it has a more benevolent (though undeserved) reputation. It’s time for people to realize that trusting Google with the details of their lives is a bad idea.


FTC hits Google with record $22.5 million fine

The Federal Trade Commission (FTC) announced today that the Monster of Mountain View has agreed to pay a fine for violating the terms of its earlier privacy accord with the agency from two years ago. Google is not admitting to any wrongdoing:

The Federal Trade Commission fined Google $22.5 million on Thursday to settle charges that it had bypassed privacy settings in Apple’s Safari browser to be able to track users of the browser and show them advertisements, and violated an earlier privacy settlement with the agency.

The fine is the largest civil penalty ever levied by the commission, which has been cracking down on tech companies for privacy violations and is also investigating Google for antitrust violations.

Consumer Watchdog criticized the settlement agreement, calling on the FTC to hold Google accountable for its war on privacy.

“While the $22.5 million penalty levied against Google is a record for the FTC, it is woefully insufficient considering that Google refused to admit any liability or wrongdoing,” said John M. Simpson, Consumer Watchdog’s Privacy Project Director.  “The Commission has allowed Google to buy its way out of trouble for an amount that probably is less than the company spends on lunches for its employees and with no admission it did anything wrong.”

One of the Commission’s five members agreed. In a statement explaining why he refused to sign off on the settlement, Commissioner J. Thomas Rosch said the FTC should have demanded – and gotten – more.

[T]his is not the first time the Commission has charged Google with engaging in deceptive conduct. This is Google’s second bite at the apple. The Commission accuses it of violating the Google Buzz consent order by “misrepresent[ing] the extent to which users may exercise control over the collection or use of covered information” and accordingly, seeks civil penalties for those violations. In other words, the Commission charges Google with contempt.

This scenario – violation of a consent order – makes the Commission’s acceptance of Google’s denial of liability all the more inexplicable.

We agree. A $22.5 million fine is nothing to Google. It is hardly going to dissuade the Monster of Mountain View from continuing to wage war on users’ privacy. The FTC should have at least gotten an admission of wrongdoing out of this settlement. They folded too easily.


FCC fines Google for stonewalling

The Federal Communications Commission isn’t getting answers from Google (surprise, surprise!) in response to an inquiry launched as a response to the “Wi-Spy” scandal, so the agency has just hit the Monster of Mountain View with a fine.

It’s tantamount to a slap on the wrist, but at least it’s something.

Google Inc. (GOOG) “impeded” and “delayed” a U.S. inquiry into its data collection, according to the latest in a series of regulatory probes of the company’s privacy practices.

The Federal Communications Commission is seeking a $25,000 fine after examining how Google gathered personal e-mails, text messages and other materials through its Street View location service, the agency said in an April 13 filing. That is the maximum penalty for failure to cooperate with an investigation, Tammy Sun, an FCC spokeswoman, said in an interview yesterday.

If only the FCC could tack on more zeros to the amount of the fine… maybe then Google would start to take the agency’s investigation seriously.


U.S. government announces Google will pay $500 million fine to settle illegal advertising charges

It looks like Google critic David Brandt was right about Google being in bed with rogue online pharmacies. Here’s the Department of Justice:

Online search engine Google Inc. has agreed to forfeit $500 million for allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States, resulting in the unlawful importation of controlled and non-controlled prescription drugs into the United States, announced Deputy Attorney General James M. Cole; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; and  Kathleen Martin-Weis, Acting Director of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA/OCI).  The forfeiture, one of the largest ever in the United States, represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google’s AdWords program, plus gross revenue made by  Canadian pharmacies from their sales to U.S. consumers.

As part of the settlement, Google also agreed to an admission of wrongdoing.

It looks like justice has been served. This is a pretty steep fine. Obviously, DoJ investigators were able to find strong evidence that Google was flagrantly breaking the law, or Google wouldn’t have settled the charges. The cost of the settlement has already decreased Google’s quarterly profit by 22%, after the company set aside the money it anticipated having to pay the feds.

“This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google’s knowledge and assistance, into the United States, directly to U.S. consumers,” said U.S. Attorney Neronha. “It is about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching U.S. consumers, by compelling Google to change its behavior.   It is about  holding Google responsible for its conduct by imposing a $500 million forfeiture, the kind of forfeiture that will not only get Google’s attention, but the attention of all those who contribute to America’s pill problem.”

LGB applauds the United States government for holding Google accountable in this case. Perhaps this investigation will cause the Monster of Mountain View to think twice before breaking the law in the future.

Google issued a short, meek statement on the settlement and then refused to comment further. The statement read:

We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago… However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.

It actually took Google years to get around to banning rogue online pharmacy ads. Google’s competitors took such actions back in 2003, but Google did not follow suit. Instead, it behaved unethically and illegally. Now it will pay the price.