Hodge wants HMRC to get stuck into Google

Margaret Hodge MP, chair of the influential House of Commons Public Accounts Committee, wants our tax officials to clamp down on Google.

 

She says that Britain has an official tax gap of £350bn excluding the amount owed by Google, Amazon and Starbucks .  Google says it abides by the law but tax officials have confirmed that it is subject to an HMRC inquiry, following information from a whistleblower called Barney Jones.

 

In May, Ms Hodge told Google’s northern Europe boss, Matt Brittin, that his company’s behaviour on taxation was “devious, calculated and, in my view, unethical”, adding “You are a company that says you ‘do no evil’.  And I think that you do do evil.”

 

Google claims that sales from the UK are invoices from other territories and so any resulting profits are not subject to UK taxation.  This is despite the company telling investors that they took over £3.2billion of money from sales to UK customers last year.  The latest accounts show Google paid just £3.4 million in tax in the UK during the same period.

 

OUR VIEW

 

Google should do the right thing: if it is earning money here, it must pay tax here.  Tax evasion and tax avoidance are immoral and a disservice to the country that Google seems to profit from.  Pay up the full amount Google.

 

 

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English High Court Reserves Judgment in Google case

A High Court judge has reserved  judgment on whether Google should face English justice in a landmark privacy case.

Mr Justice Tugendhat  listened to legal argument for a day-and-a-half, as Google tried to avoid a full trial before the UK courts.

A group of claimants, known as Safari Users Against Google’s Secret Tracking, has accused the search giant of bypassing security settings on Apple’s Safari internet browser in order to track their online browsing and target them with personalised adverts.

The matter has already been dealt with in the United States in relation to American victims, but British Safari users say that Google has had no sanction in the UK and that they have been left with no option but to sue.

Despite generating hundreds of millions of pounds in England, having large offices here, and staff based here, Google told the court that the claim should have been brought in the United States, where it is based.

Antony White QC, acting on behalf of Google, told the court: “It’s not enough to say ‘the claimants are here and they would like to sue here.  It’s not a starting point where the claimants are, or where the claimants have their computers, or that they suffered their distress here.

“The defendants are there (in the US), its witnesses are there, its documents are there.”

The internet giant was sued for the same privacy breach in the United States in August last year, and had to pay a fine of $22.5 million to the US Federal Trade Commission for violating its order that the company would not misrepresent “the extent to which consumers can exercise control over the collection of their information.”

It did not admit to wrongdoing in the FTC case, but said the tracking was accidental. Despite this, the Attorney General of New York announced last month that the company had agreed to pay $17 million to settle charges that it secretly tracked some consumers’ activities on the internet in the United States, even after promising such tracking had been blocked.

Mr Justice Tugendhat quizzed Google’s counsel over the fine it paid in that case.

He said: “It is quite striking to have you say in one breath that there is no substantial claim and on the other, that the regulatory sanction for what was done was obviously considered very seriously.  I know $17 million is not an awful lot for a large corporation, but it is obviously meant to send a message.  If there is nothing in it, why did Google pay $17 million?”

Incredibly, even with global profits of 2.97bn (£1.84bn) for the July-to-September period, Google also argued that if the case went to trial in the UK it could last for six or seven days and cost the company up to £1.2 million, which it claimed was “disproportionate”.

Mr Justice Tugendhat asked whether this was a proper way to argue the merits of a case.

He said: “This has been referred to in a previous case, which points out that if somebody has a claim for £50, then the system of justice ought to provide a means by which a debt of £50 can be recovered.  It is no answer to a claim for a debt of £50 to say, it is going to cost you more than £50 or £500 to collect the debt.”

In seeking to have the case dismissed, Mr White also claimed that the information obtained was ‘not personal’, so Google had no obligation to keep it confidential.

He told the court: “If you have a car parked on your driveway you might get a flier through for a local garage.  It’s irritating, it’s unwanted and it is unsolicited but does it cross that threshold, my submission is that it doesn’t.

“Another example is in my inbox I get unsolicited emails every day.  There might technically be a European court action to stop that but you cannot claim damages just because of that.”

He added: “My point is a simple one.  It is really a logical point.  If the little set of browser-generated information automatically sent every time you go to a website or an advertisement is not itself private information, then it is like the 100 times nothing, as I suggest in my skeleton argument.”

However, Mr Justice Tugendhat replied: “It sounds like 100 times nothing, or it is like 100 pieces of jigsaw puzzle, any one of which is of no significance at all.  What is the answer to the real point?  This is what Google do.  This is who they are.  They trawl vast amounts of data in an extremely sophisticated and ingenious fashion in order to produce on the screen information which is in fact about the user of the screen.”

He continued: “We get it in this court, as you know as well as anyone else, in jigsaw identifications.  The fact that someone has red hair is not confidential, the fact that they have three children is not confidential, the fact that they live in Watford is not confidential.  If you start adding all these together, you very rapidly identify who the person is.”

A decision is expected in the New Year.

News Release 16.12.13 – Google must answer to British Justice, say UK privacy claimants

The fight to ensure Google cannot evade British justice goes before the English High Court on Monday, when a group of British internet users take action against the internet giant.  The claimants argue that Google breached their privacy in England and should be held to account here too.
 
In their claim, filed in London, the group of claimants, known as Safari Users Against Google’s Secret Tracking, have accused Google of bypassing security settings on the Safari internet browser in order to track their online browsing and to target them with personalised advertisements.  But Google has said that the claim should have been brought in the United States, where it is based, and will argue against it being heard in England at a jurisdiction hearing on Monday.
 
Judith Vidal-Hall, one of the claimants argues that Google should answer to British justice. “Google is very much here in the UK.  It has a UK specific site.   It has staff here.  It sells adverts here.  It makes money here.  It is ludicrous for it to claim that, despite all of this very commercial activity, it won’t answer to our courts.   If consumers are based in the UK and English laws are abused, the perpetrator must be held to account here, not in a jurisdiction that might suit them better.  Google’s preference that British consumers should travel all the way to California to seek redress for its wrongdoings is arrogant, immoral and a disgrace.  We will fight this attempt to dismiss the case robustly.”
 
Google was sued for the same privacy breach in the United States in August last year, and had to pay a fine of $22.5 million to the US Federal Trade Commission for violating its order that the company would not misrepresent “the extent to which consumers can exercise control over the collection of their information.”  Google did not admit to wrongdoing in the FTC case, but said the tracking was accidental.  Despite this, the Attorney General of New York announced last month that the company had agreed to pay $17 million to settle charges that it secretly tracked some consumers’ activities on the Web, even after promising such tracking had been blocked.
 
Across Europe, data regulators are considering steps to reign in Google’s continued gathering and use of private data, but so far Google has not be held to account in Europe for its breach of users’ privacy.   Olswang’s Dan Tench represents the claimants:
 
“British users have a right to privacy protected by English and European laws.  Google may weave complex legal arguments about why the case should not be heard here, but it has a legal and moral duty to users on this side of the Atlantic not to abuse their wishes.  Google must be held to account here, even though it would prefer to ignore England.”
 
The case is listed at Court 14 of the High Court on Monday, December 16, at 10.30 am.
 
Photo call:
Campaigners from the Google Governance Campaign group will be outside the High Court, London, at 09.30 on Monday handing out cookies and calling on Google to “let its tracking cookies crumble’.
 
Notes to Editors
The Google Governance Campaign has been set up by campaigners associated with the Safari Users Against Google’s Secret Tracking group.  Its mission is to campaign for better corporate behaviour by Google in the UK, respecting Britons’ right to privacy and Britain’s right to taxation on any profits generated in the country. 
 

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Safari Claimants’ Day In UK High Court

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Google is appearing before the English High Court this morning to argue that a privacy action brought by British claimants should not be heard in the UK.   It follows an alleged breach of the privacy of people using Apple’s  Safari internet browser who had clicked to “private browse”.  The matter has already been dealt with in the United States in relation to American victims.  British Safari users say that Google has had no sanction in the UK and so they have had no option but to sue the internet giant.

The High Court will decide whether the case should go ahead.  The claimants say that Google is in the UK, it serves the UK, it profits from the UK.  It cannot ignore the law here.

The case against Google

On Monday, in a room at the High Court, a judge will consider whether Google should answer to British justice or whether it can only answer to Californian courts, as it argues.  This is what it’s all about.

Google has faced massive fines for breaching the privacy of internet users surfing on Apple’s Safari browser.  The browser makes it very easy to switch off tracking.  You click on private browsing and away you go.  It’s a handy tool if you are searching for a present for a loved one or simply don’t want to have ads based on what you momentarily review. Seems straightforward, clear and no one could ignore that, right?  Wrong. Google somehow allowed a workaround to ignore the private browsing setting.  An accident is what they apparently claim.  But the workaround meant there was no guarantee that any Safari user could browse privately.   And consumers only found out about this when a researcher at Stanford University stumbled across the breach.  The researcher, Jonathon Mayer, claims that Google exploited a feature in Safari to bypass the privacy settings which were designed to block third party cookies.

In the States, consumers’ interests were represented by  the Federal Trade Commission (FTC) which in February last year announced that Google had agreed to pay a $22.5million fine for breaching its FTC Control Order, a legal commitment enforced on Google for previous privacy violations.  In other words, because Google has repeatedly flouted privacy rights, they had to agree to a code of conduct to ensure good behaviour.  When they got caught out again, they got penalised.  

In the UK, our Information Commissioner’s Office announced it would investigate whether Google had broken UK law too.  After all, British consumers’ rights were likely to have been breached too. But after the announcement, nothing.   British consumers had to resort to the courts to protect their right to privacy.  So earlier this year, the law firm Olswang filed a claim against Google on behalf of ordinary consumers.

The battle begins on Monday, when Google will likely argue that it does not answer to English courts.  The Safari users are determined to hold the company to account here, one way or the other.   

Our Mission

The Google Governance Campaign was established in December 2013 to campaign for better corporate behaviour by Google in the UK.

We are not anti-Google.  We use Google.  We like many aspects of its service.   But we do not like two key aspects of its activities:

1. Privacy

People in Britain have a right to privacy.  We don’t expect someone to follow us through shops in order to monitor what we look at and what we like in order to profit from targeting us with tailored advertising.  Yet this is what Google does.  When browsing online, most people don’t use “private browsing” functionality but when they do, they don’t expect Google to ignore their wishes and use tracking cooking to spy on them.  Yet this is what Google has had to admit it has done.  Why should gift surprises, special occasions or personal matters be ruined or revealed to others?  One of our members lost the pleasure of his marriage proposal because his future wife saw that he’d been looking at engagement rings online. Not acceptable.

It gets worse.  Google now has a suite of products (many great by the way) but all of which pull your data together in a big file.   Big data it’s called, and it’s worth a lot of dollars.  Do you really want a private organisation holding a big file of information about you?  How do you know it won’t be sold to other organisations or obtained by governments in the future?  We take the view that it is unacceptable to pool this data and hold it indefinitely.  We intend to press the British Information Commissioner (ICO), the regulator who is supposed to protect our interests here, to take action.

2. Taxation

If you profit in this country, you need to pay a fair amount of tax in this country.  Google is builidng a massive headquarter building at Kings Cross in London.  It clearly is doing this because it has a lot of staff here, making money for the organisation.  Last year, they paid just £37million in tax for a turnover in 2011 of £395million.  That’s a tax rate of less than 10%.  Yet Britain’s base corporate tax rate is 20%.  How can it be that Google didn’t pay the at least £42million extra that it morally should contribute to the society in which it profited?  We aim to find out.

This campaign focussed on these two aspects and nothing else.  We don’t want to bring down Google – heck, as if we could.  We just want Google to remember us, the people who use its services, to remember we deserve a little better.  Google – you can end this campaign at any time.