Tech giants could pay 10% of turnover under draft UK law Nearly two years after its creation, the UK's Digital Markets Unit (DMU) – meant to bring Big Tech to heel in much the same way as the EU's DMA – might finally get some teeth, with a draft law allowing it to fine anti-competitive behemoths up to 10 percent of their turnover for strangling rivals and eating all the pie. The …
There's the people in charge, there's the serfs (who think of themselves as citizens), there are the oligarchs, and there are the international companies.
The people in charge have their money in city so-called traders, the sort of people who do things like manipulating LIBOR. Despite absolute prima facie evidence of fraud, nobody faced criminal charges. Some of the banks paid some money to shut up the regulators, money which of course was peanuts to the banks.
Dave Blogs, a serf, does a bit of work off the books for cash in hand. Down come the authorities and he gets a criminal record, and the Daily Mail writes about dodgy Daves. The Daily Mail is owned, of course, by somebody who lives abroad for tax (of should I say avoiding-paying-tax) reasons. The Daily Mail represents the oligarchs. How they cheered when Liz Truss nearly broke the economy in a few hours. The serfs are the stupid people like you and me who pay all our tax and get the shit end of the stick every time.
The international companies all "perfectly legally" pay way less tax than the serfs on a per £ basis. Starbucks, for example, makes £95 million gross profit but pays £5 million corporation tax. Google, Amazon, and the like are in this group. One way or another, the people in charge, the oligarchs, and the international companies will somehow pay less tax on a per £ income basis than Dave.
Will the SMS pay this money to the companies forced out?
Perhaps they'll use them for grants for startups in the same field as the giants?
Sorry, I think I misheard, did you say SMS actually has no designated use, and adding this tax will only cause quid pro quo trade wars, of which no public body is a winner?
Perhaps they are hoping the giants will remove themselves from the competition, thereby improving competition, by taking their bases and rehousing then in countries that have lower taxes, but still provide some of the services they do.
Let's label this correctly, it's a cash grab because the government has been watching the money with glee and has undermined every possible domestic competitor by anti tech policies, such as allowing ARM to be sold off, or lack of investment in the industry. So protectionism now is the only way to "fix" the problem.
So, like most fines and the like, the point of them is deterrence. The goal is for companies not to get fined at all - as they won't engage in the behaviour that they are legally prohibited from engaging in.
If they do then "do the naughty", then they get fined and that goes into the UK's general tax pot usually. This can then be used to improve the country in general.
Its like being fined for not wearing a seatbelt. The government isn't rubbing its hands with glee that people will be caught. They're hoping to get people to wear their seatbelts and not die horrific deaths on the roads...
Post Brexit, GAFA can walk away from the UK market quite easily. The internet has multiple digital borders built into it. Why risk a cash grab from a government that has just made itself and its citizens one third poorer (25% decline in sterling and decline in EU trade/City of London income). They would be laying down a marker on their protection of their business. Play ball or play without a ball.
"Post Brexit, GAFA can walk away from the UK market quite easily."
Yes, and they could have done that pre-Brexit as well. As you say, it's incredibly easy for any and all of these companies to shut off all UK IP addresses.
But, since they are making a shit-tonne of money off UK customers, why on earth would they voluntarily renounce that? Even with the potential for giant fines, it's far far cheaper for them to comply (or pretend to) as best they can, and add a wedge of cash to the "compliance risks" and "litigation provision" parts of their balance sheet.
>>25% decline in sterling<< That all depends on the date range being used, I've seen many 'Pound drops by...' headlines but not many shouting 'pound rises'
Randomly picking a previous low point, for a short period in 1985 GBP/USD was at £1=$1 so you could also say the 20+ year trend was up by 100% when it last reached $2 in 2007 - Exporters trading with the US were really unhappy with the $2 rate, importers loved it.
" the power to fine rule breakers up to 10 percent of their global turnover, they will also be able to make senior managers "personally responsible for ensuring their company complies with the DMU's requests.""
As long as fines are small enough to be 'cost of business' and as long as managers are not held personally responsible, companies will continue on their merry way, laughing at fines that, while in 8-9 figures, are still less than the excess profits they make from the monopolistic behaviour, and far, far less than their revenues and profits which are measured in 10s of billions
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