Google, Tax and a Free Lunch - in defence of Google
As Google continues to face damnation from MPs over its use of UK loopholes in order to pay a minimal amount of tax as possible, Paul Doleman, CEO of iCrossing UK offers a defence for the search giant, highlight the work it is doing for the nation, aside from its financial activities.
I was recently making my way to a meeting at The Goodwood Hotel and, having never been there before, was relying on my in-car Sat Nav to guide me. It wasn't doing very well, so before it sent me over a cliff and into the sea, I whipped out my phone, opened up Google Maps and was quickly and easily taken to my destination.
Later that same day, I came across what I thought would be a dry report on Digital Taxation by Nicolas Colin. According to Colin, as we share more and more information with Internet Giants the boundaries between production and consumption are blurred - I agree with that. He went on to say that the information collected or shared adds value to business models and therefore should be taxed.
A couple of things struck me at this point:
Firstly, by that logic, Tesco, Sainsburys and every retailer with a loyalty card isn't paying enough tax.
Secondly just how do you put a monetary value, for taxation purposes, on the worth of knowing that I've visited The Drum, Jimmy Choo and Man City's websites? I like white chocolate cookies and live in Sevenoaks - is that 10 cents or £10 pounds. It is preposterous to try and value the data without knowing massively more about me - my social graph, my reach and influence, trustfulness, spending power. You name it, and even then I find a value spurious.
I then started to think about the broader Google tax issue, gaining so much attention right now. My Sat Nav experience gave me pause for thought about the "tax in kind" corporations like Google pay, manifest through free services like:
- a super-fast web browser
- amazing video entertainment and more on demand in YouTube
- a mail and messaging platform
- maps to get me where I want to go
- a search tool that is the de facto means we find the stuff we want
- space to store documents and photos with tools like Google Docs and Picassa
- spread sheets and word processors
- a means to create, manage and host my blogs with Blogger
- research tools
Add that to the financial help Google provide to start-ups in Shoreditch and Manchester, for example, and big projects like the digitising of the assets of the British Library and it is pretty clear they have permeated the daily routine of millions of UK citizens, young and old alike. We use Google's services "freely" with gay abandon.
Would I use them if Google charged a penny a search, or £5 for their mapping app? I'm not sure I would - I'm not sure any of us would.
This strikes me as an anathema, because I know there is no such thing as a free lunch. It takes serious investment on Google's part to deliver this stuff and that is clearly easily forgotten about amongst the recent furore over tax.
I'm all for companies obeying the law and if we don't think the "spirit" is being followed then governments should indeed act.
That said, perhaps we shouldn't scream quite so loudly, beat Google with every stick available, at every opportunity or those "free" services might just start charging something, or go away altogether, and that would be a tragedy.