Archived the celebrations for the 20 years, Google is preparing to face the ax of the White House. The accusations launched by Donald Trump have not fallen on deaf ears and risk leading to a revolution that could change the structure of the most used search engine in the world. In fact, the American president has mandated his main economic adviser, Larry Kudlow, to analyze ways to regulate the impartiality of Google, thus intervening on that secret algorithm that has been eluding the ray of experts and analysts for decades.
GOOGLE GREAT ABSENT AT THE CONGRESS
On September 5, Big G was the great absentee at the hearing on Capitol Hill in which representatives of Twitter and Facebook attended instead. The Senate Intelligence Committee did not accept Google's chief legal officer, Kent Walker, as a witness because he was considered a sufficiently senior person within the Californian group.
The testimonies concerned topics that have now become of capital importance such as fake news and online hatred, censorship and interference in elections by social networks. The main purpose is to avoid any kind of conditioning of the vote of mid-term scheduled for next November.
What is certain is that, regardless of the results of the hearings – which are expected to be very scarce – after Europe, the US has also decided to remove the veil that envelops the world of the Tech giants, making it rather opaque.
GOOGLE'S MONOPOLY AND THE BOUNDARIES OF COMPETITION
That Google, during its 20 years of existence, has represented and still represents a Copernican revolution capable of determining the life of individuals is now established. No one is able to escape its magical beam. Watch videos on YouTube? It belongs to Google. Have you ever opened Chrome to surf the web? Google. Use for orientation Google Maps, you have an address gmail? The names already indicate who controls them. You are reading this piece on one device Android? You are one of the 80% of users in Europe who use smartphones and tablets powered by Google's operating system.
If that of Big G is not a monopoly then, we are close considering that the most important "tool" of all does not appear in the list above: the search engine. And here the percentages are record-breaking: almost 90% of people who surf the internet use it Google Search as a search engine, a reality that allows the Mountain View giant to manage almost half of online advertising.
An absolute and global domination which, according to the regulators, has sometimes resulted in illegality: abuse of a dominant position relating to Android is the reason why the EU Antitrust has imposed a fine of 4,3 billion euros on the US giant.
GOOGLE AND RELATIONSHIPS COMPLICATED WITH TAXES
We enter a minefield. The relationship between Silicon Valley big names and taxes has always been very complicated. Not so much for the companies as for those who owe them, or rather should, collect them.
Before talking about figures, however, we need to make a premise. The holding company is called Alphabet. In Mountain View (California) we then Google Inc., American parent company, in the Old Continent there is instead Google Ireland Limited, European parent company, based in Gordon House, Barrow Street, Dublin. In Italy Big G operates through its subsidiary: Google Italy Srl, (limited liability company) based in Milan.
The local branch, from an official point of view, deals only with providing services to the parent company and therefore does not declare income deriving from its activity in Italy but only those deriving from services performed for Inc and Ireland. Translated: it's as if he didn't sell anything with us, but only did consultancy. Through this mechanism, Google Italy's money ends up in the balance sheet of the European parent company which pays taxes in Ireland, taking advantage of the "ragged" rates guaranteed by Dublin taxation. Taking the last budget as an example, in 2017 Google Italy Srl recorded a turnover of approximately 94,5 million euros, with 7,6 million in profits and paid taxes on those. Accounts more suited to an SME than to a multinational with a global turnover of 110 billion dollars.
This conduct, among other things, is not only followed by Google but by all OTTs (Over The Top) and it does not concern only Italy, but all EU nations. Suffice it to say that, according to the figures of Italy Today, last year Apple, Google, Facebook, Amazon, Airbnb, Uber and Tripadvisor paid a total of about 14 million to the Italian tax authorities.
It goes without saying therefore that, among the negative aspects of the "Googolian revolution" there is precisely the relationship with taxation. A reality that sooner or later will have to be faced by individual governments which should simultaneously demand greater transparency on budgets and above all on the income resulting from activities carried out on their territory. At the same time, the European Commission has once again put the now famous web tax on the agenda in order to find a solution, while trying not to harm those who have decided to invest on the web by focusing on the technological progress of the old continent.
GOOGLE, NEWSPAPERS AND COPYRIGHT
With the attack launched by Trump, according to which Google would privilege him “only” news of the “Media Fake News”, the theme of the relationship between Big G and contents, especially journalistic ones, is back in vogue.
Now the news can only be read on the internet, no one buys paper anymore and users search for what they want on Google or Facebook. And here the donkey falls, at least for the newspapers which on the one hand are cannibalized by the big names on the internet who index their contents and convey them to readers, on the other hand they lose more and more advertising which is managed largely by social networks and the search engine.
The result is, according to many insiders, that Google would be becoming a major obstacle to freedom of the press, forcing the newsrooms to lay off due to lack of resources and to invest less and less in the quality of journalism. Also in this case a way will have to be found to regulate the relationship between Google and Facebook on the one hand and newspapers on the other. Under penalty of the definitive disappearance of professional journalism. It is in this context that it is placed copyright reform which will return to the Eurochamber on 12 September. A controversial proposal, with many detractors – who speak of censorship and a threat to the very survival of the network – but supported by the editorial media. What is certain is that, as for taxes, budget transparency and competition, a solution still appears very, very far away.
(Last update: 6.08 pm on 6 September).
