Tech Giants: Above the Law
Video above published Aug 3, 2017 by L2inc.com: NYU Stern adjunct professor Scott Galloway on the Four Horsemen--
Amazon, Apple, Facebook, and
Google--which pay far less than the average US corporate tax rate. According to Galloway, for economies to thrive, companies need to hand over a quarter of their profits.
The Losers, says Galloway, are
future generations, who will have to pay off the debt racked up by politicians unwilling to tax the most profitable companies in the world.
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| Source: S&P Global Market Intelligence |
Sources:
(0:20) S&P Global Market Intelligence.
(1:21) “Google’s EU Fine Is a Small Price to Pay for Scale,” The Wall Street Journal, June 2017.
http://on.wsj.com/2wakRWL
(1:48) “Case No COMP/M.7217 - Facebook/ WhatsApp,” Office for Publications of the European Union, March 2014.
http://bit.ly/2cxoGyC
(2:08) “E.U. Fines Facebook $122 Million Over Disclosures in WhatsApp Deal,” The New York Times, May 2017.
http://nyti.ms/2pZh1ex
(2:33) “This Analysis Shows How Viral Fake Election News Stories Outperformed Real News On Facebook,” Buzzfeed, November 2016.
http://bzfd.it/2vm5htp
Transcript (via YouTube.com):
0:02 A
loser,
future generations, who will have to pay off the
debt racked up by
0:05 politicians
unwilling to tax the most profitable companies in the world. For
0:10 economies to thrive, companies need to hand over about a quarter of their
0:14 profits. The S&P average tax rate is in fact 27 percent but
who pays less than
0:20 this? Who plays by different rules? You guessed it, the most successful companies
0:24 in the world:
Apple, Amazon, Facebook and Google. The Four Horsemen are treated
0:29 differently, they
play by a different set of rules, because our leaders, supported
0:34 by our society, has decided to engage in a gross idolatry of tech innovators that
0:39 is just plain gross. Think about it. The terrorists in San Bernardino last year--
0:44 if they were using a Blackberry and if Blackberry or RIM had refused to provide
0:49 access to the FBI we would have shut down the Canadian border but not the
0:53 iPhone. It's sacred. We have our Jesus Christ, we have our cross, and we decided
0:58 that
our iPhone is more sacred than our home or our computers or our persons
1:02 that can be searched ... politicians in the US are worshipping
1:07 at the altar of these tech geniuses.
Margrethe Vestager and the
EU is
1:11 slapping
Google with a 2.7 billion dollar fine over comparative shopping
1:16 search results but with 18 billion in cash and cash equivalents on its books
1:20 at the end of March, Google's not going to feel much pain in fact the penalty
1:24 amounts to one month of parent companies Alphabet's operating cash flows The
1:29 Four Horsemen are taking a calculated risk, they've done the math and realize the
1:32 best decision for shareholder value is to wave their finger in the face of
1:36 governments and lie. When
Facebook sought approval of the acquisition of
Whatsapp
1:40 they assured
EU regulators that it would be impossible for the two entities
1:45 to share data in the short term. This calmed regulators concerns over privacy
1:49 and the acquisition was approved Well spoiler alert, Facebook figured it out
1:54 and they figured it out fast. So ... the EU fined Facebook 122 million
1:59 dollars. Facebook felt Whatsapp was worth 19 billion dollars so a point six
2:04 percent premium for increasing the likelihood the acquisition goes through
2:08 is chump change This is the equivalent of getting a $10 parking ticket
2:12 for a meter that charges $100 every 15 minutes It's just better to break the
2:17 law What is the algebra for an effective
2:19 penalty? The fine times the probability of getting caught equals serious shit
2:24 It's time for regulators to grow a pair and begin ... serious penalties
2:29 against the Four Horsemen. For example when 80% of our news on Google and Facebook the
2:34 week before the election is fake and Google and Facebook have not put in place the
2:38 processes and technology the way other media firms seem to have figured
2:43 out, what should the penalty for that be? Facebook's defense we're not a media
2:47 company but a platform. What if the week before the election McDonald's was
2:52 serving beef and we discovered that 80% of that beef was fake and we came down
2:57 with encephalitis that clouded our judgment and we began making terrible
3:01 decisions. Would an appropriate defense be we're not a fast-food restaurant we're a
3:06 fast-food platform? We'll see you next week
