Tech giants back Trump over European plans to tax Silicon Valley
By James Titcomb in San Francisco
AMAZON and Facebook have thrown
their weight behind Donald Trump’s
counter-attack on France’s tax on tech
giants, which threatens to open a new
front in global trade wars.
In evidence submitted to Trump ad-
ministration officials, the two tech
firms said that proposals for a levy on
revenues earned in France would be
unworkable, damage local businesses
and unfairly hit American companies.
Britain is working on its own digital
tax, amid criticism of the amount that
the biggest internet companies pay in
the UK, but France has been the first to
sign such a tax into law, saying it will
hit digital companies with global reve-
nues of more than €750m (£685m)with a 3pc tax on French revenues.
Today, American trade officials will
open a hearing on whether the French
tax discriminates against US compa-
nies. Its “Section 301” investigation
could result in the US applying tariffs
on French wine and cheese if it finds
that the digital tax unfairly affects
American companies.
“Facebook appreciates and stronglysupports the administration’s decision
to investigate the French DST under
Section 301,” Alan Lee, the social net-
work’s head of global tax policy, said.
Mr Lee said that the tax will be based
on revenue on adverts seen by French
users, something Facebook is currently
unable to calculate.
Amazon claimed the tax would dam-
ages thousands of small businesses thatuse the website to sell to French con-
sumers, and said it had appeared de-
signed to hit American firms. “Its
revenue thresholds were set high so
that it would apply only to a small num-
ber of almost entirely non-French com-
panies,” wrote Peter Hiltz, director of
international tax policy and planning.
The companies are likely to make
similar arguments against British plans.California
gleaming
The 1958
Ferrari NV
250 GT LWB
California
Spider
draws some
admiring
stares at the
Gooding and
Co auction
during the
2019 Pebble
Beach
Concours
d’Elegance
in California.
It’s predicted
that $378m
will be spent
at the auction
next week.BLOOMBERGMobile operator Three aiming to conquer the home
By Christopher Williams
THE mobile operator Three has begun
a bid to use its dominance of the 5G air-
waves to attack traditional broadband
providers such as BT and Sky.
Three, owned by the Hong Kong
conglomerate CK Hutchison, is from
today appealing to consumers to ditch
their fixed line in favour of a single 5G
bill of £35 per month, covering con-
nectivity at home and on the move.
The plans are built on the operator’s
strength in 5G radio spectrum. Follow-
ing a 2017 deal between CK Hutchison,
which is controlled by the billionaire Li
Ka-shing and his eldest son Victor, and
UK Broadband, a heavily loss-making
wireless internet venture controlled by
younger sibling Richard, Three has a
greater share of the airwaves than all
its rivals.
The £250m takeover of UK Broad-
band, which under the Relish brand
failed to make inroads into the home
broadband market with 4G technol-ogy, means that Three can now offer
faster 5G services and more capacity
than its traditionally bigger competi-
tion.
The operator has been seeking to ex-
pand its customer base in an attempt to
make better returns on the billions it
has invested as a latecomer to Britain’s
mobile market.
The Li family, who also control UK
electricity infrastructure and ports, as
well as the retailer Superdrug, were an-
gered when Three’s bid to merge withrival O2 was blocked in 2017. An
aggressive move into the domestic
broadband market via low prices,
unlimited data allowances and a “plug
and play” router that converts a 5G into
a Wi-Fi signal, is viewed by executives
as an alternative, if more speculative,
way to attract more customers and
enjoy the economies of scale.
Such “fixed wireless” services
are commercially unproven and
technically untested in a market with
Britain’s topology and thick-walledhousing, which may limit speeds and
coverage. Even radiators under
windows could prove an obstacle to 5G
signals.
However BT is expected to introduce
its own 5G “fixed wireless” services
later this year.
If successful, they could bring better
broadband to millions at a significantly
lower cost than replacing its copper
telephone lines with “full-fibre”
networks.
Three’s 5G network is due to cover25 cities by the end of the year. Rural
areas, where customer densities and
returns are lower, are being treated as a
lower priority.
Rivals, including the network O2,
have warned the industry regulator
Ofcom that Three’s current dominance
of the relevant airwaves poses a threat
to forthcoming auctions.
They have claimed that the industry’s
smallest player could seek to delay
and disrupt sales to maintain its
advantage.By Margi Murphy in San FranciscoA GOOGLE bid to demonstrate it is
open to competition following a £4bn
fine for monopoly abuse has backfired,
with rivals alleging it is potentially
“misleading” consumers with a system
of fees that limits choice.
After the EU found Google had used
its Android smartphone software to
tighten the stranglehold of its domi-
nant web search engine, it offered chal-
lengers the chance to pay to promote
themselves to users.
Google hopes the likes of Yahoo!,
DuckDuckGo, Ecosia and Qwant will
bid against each other for a place on a
screen offering alternative search en-
gines when Android users in Europe
first turn on their new smartphone.
To rank alongside Google’s own
search engine, rivals would be re-
quired to pay each time a user picks
them – a system similar to Google’s
search services, whereby advertisers
compete to appear at the top of results.
However, challengers are refusing to
pay. Éric Leandri, co-founder of Qwant,
based in France, said his company was
reviewing whether Google’s plans
were legal. The move was not “an ap-
propriate remedy to Google’s abuse of
its dominant position on the Android
mobile platform”, he said.
Gabriel Weinberg, boss of Duck-
DuckGo, said that while such a “ballet
box” screen might be the right solu-
tion, Google’s design “will not mean-
ingfully deliver consumer choice”.
Stephanie Whited, communications
chief at Tor, a browser that promises
anonymity online, warned: “The
screen would definitely limit people’s
options and perhaps mislead them into
thinking those are the only choices.”
In April, following its record anti-
trust fine, Google said it would from
next year offer Android users a choice
of five search apps and five browsers.
Google declined to comment.Rivals refuse to
pay Google to
open up search
engine market
By Jack Torrance
PROFITS at a controversial unit of G4S
that runs immigration centres and
tags criminals collapsed by almost half
last year as the outsourcer took heavy
blow from its contract to run a violent,
drug-riddled prison in Birmingham.
G4S Care & Justice Services UK
made £21m last year, down from £38m
in 2017, according to accounts filed
with Companies House.
The decline included a £9m charge
triggered by trouble at HMP Birming-
ham, a contract that has since been
cancelled by the Government.
With £341m of revenues, the unit
makes up the bulk of G4S’s wider Care
& Justice division, which has become
increasingly sidelined as the FTSE 250
member focuses on more conven-
tional security work.
Earlier this month Ashley Almanza,
its South African chief executive,
hinted that G4S could look to offload
the division in the long-term, saying it
was “not a priority for growth capital
going forward”.
“Any asset has to earn its place in
the portfolio and clearly we would
also consider under the right circum-
stances exiting some of the services
we deliver in Care & Justice.”
A spokesman said profits for the
entire division, which includes clean-
ing and maintenance contracts and
work in Australia, were up in the year.G4S’s cash solutions arm, which
transports money for retailers and
banks, is already on the block.
The company handed back HMP
Birmingham to the state-run prison
service in April after inspectors found
an “institution that was fundamen-
tally unsafe, where many prisoners
and staff lived and worked in fear...drug taking was barely concealed
[and] delinquency was rife.”
It agreed to hand the Government
£9.9m to cover the cost of transfer-
ring control – most of which will be
covered by a £9m provision recorded
in last year’s accounts.
Care & Justice accounts for just 7pc
of G4S’s global revenues but has been
a repeated source of controversy.
It is still being investigated by the
Serious Fraud Office after overcharg-
ing the Home Office to tag criminals,
some of whom were later found to
have been dead or in prison.
In 2017 a BBC investigation accused
G4S staff of mocking and mistreating
detainees at Brook House immigra-
tion centre.
G4S missed out on a shot at retain-
ing its work managing asylum seeker
housing in the Midlands and the
north-east of England in January.
Mr Almanza’s comments came as
the company confirmed plans to
separate out its cash handling
business following pressure from
shareholders.Prison riots hit G4S profits as
Government cancels contract
Lidl tells suppliers
they will bear costs
of a no-deal Brexit
By Laura OnitaLIDL, the German discounter, has told
British suppliers that it wants them to
pay for EU import tariffs to keep
shelves stocked in its Irish stores, in
the event of a no-deal Brexit.
The grocer wrote to suppliers last
week checking they would be “deliv-
ery duty-paid ready”, meaning sellers
would have to foot the bill in a no-deal
scenario.
“Lidl obviously believes we will
reach that situation, and what it is say-
ing is it wants us to pay the duty,” one
supplier told The Sunday Times.
Another said he expected supermar-
kets to “take us to the precipice and
threaten to delist our products” as they
negotiate on costs.
While the Government has said it
does not want to charge a fee on im-
ports if the UK leaves without a deal, it
has no say over tariffs on exports.
Lidl, which has 162 stores in the Re-
public of Ireland, said it was working
with suppliers to tackle any potential
supply issues and said all its contracts
had a clause about delivery duty.iTea Opening day of Robot restaurant in Bangalore in
India. The restaurant has introduced one robotic usher to
greet diners and five serving robots to take food to tables.AFP/GETTY£17m
The loss in profits recorded by G4S Care
and Justice Services UK between 2017 and
2018, down from £38m to £21mBusiness
The Daily Telegraph Monday 19 August 2019 *** 29
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