Articles Tagged with Google

anitrustIn its third largest European Union antitrust penalty in the last two years, Google was fined 1.49 billion euros or $1.7 billion USD. This penalty, in particular, involves Google using its power to control the flow and pricing of search adverts from 2006 to 2016. This also marks 10 years of regulatory battles fought between Europe and Alphabet-owned Google. Specifically, the findings were that Google abused its dominance to stop websites using brokers other than AdSense. AdSense lets Google act as the middleman between advertisers and website owners. Google is appealing the fine.

These illegal practices in search advertisement brokering has led Google to pay 1.29% of its 2018 turnover.  Google is preventing publishers from placing any search adverts from competitors on their search results. This, in turn, allowed Google to gain advert spaces on the pages that were more lucrative while also making sure they gave approval before any changes to rival adverts were made. The main issue is that as site owners and advertisers were given fewer options and forced to pay higher prices, the financial burden would be passed on to consumers.

At a news conference following the ruling Margrethe Vestager, the European Competition Commissioner, said: “Today’s decision is about how Google abused its dominance to stop websites using brokers other than the AdSense platform.”.

Google-tax-evasion-300x200Google, a renowned international technology company, was found to be using a Dutch shell company in order to reduce its foreign tax bill in 2017 by shifting $24 billion, 19.9 billion euros, of its revenue from royalties to Bermuda. The amount shifted in 2017 through the Netherlands was 4 billion euros more than what was documented in 2016. This information is according to documents filed at the Dutch Chamber of Commerce.

To further explain how this worked, Google used the subsidiary in the Netherlands, Google Netherlands Holdings BV, to shift their revenue made outside of the United States, their home country, to an affiliated base in Bermuda, which is essentially a known tax haven where companies are not required to pay an income tax. This base is called Google Ireland Holdings, and the tax strategy used here is known as the “Double Irish, Dutch Sandwich”. Surprisingly, this is a legal strategy which has allowed Google, who is owned by Alphabet, to avoid US income taxes and European withholding taxes, saving a large portion of their overseas profits.

When addressed through calls and emails about this shifting situation, Google stated that “We pay all of the taxes due and comply with the tax laws in every country we operate in around the world,” and continued in detail to say “Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26% over the last 10 years.”