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Clipping the Social Media Giants’ Wings

Readers may have seen that the first USA case against Facebook on unfair competition failed before a federal court last week. We reported some months ago that FB faced two cases related to its alleged abuse of a dominant position (mainly accused of buying up its competition). The first case was brought be the Federal Trade Commission (FTC) and it’s this case that has failed, but in its judgement the Court set down the conditions for the FTC to re-enter its case (basically telling the FTC what it needs to do to win next time around!). The second case, brought by 49 States Advocates General is still to be heard.

Meanwhile, the OECD is holding a meeting in Vienna on 8-9 July on taxing multinationals. The OECD hopes to reach an agreement that would ensure that corporate tax is set worldwide at a minimum of 15% of turnover. Some EU countries, specifically Ireland, Luxembourg, Hungary and Estonia, are holding out because they have attracted multinationals with generously low taxation packages (FB, Apple, Amazon and Twitter are all HQ’ed in Dublin), but the pressure on these countries to drop their opposition is very strong. Nigeria and Kenya, however, are leading the case for a more equitable sharing of corporate taxation. Developing countries will continue to receive only the crumbs off the table if corporate tax is applied according to the OECD’s plans. Kenya and Nigeria point out that the developing countries should be better remunerated under the OECD’s corporate tax plans. Apart from the social media companies, there are over 600 multinationals worldwide.

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Alastair Tempest

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