On 4th September 2021, Ethical Consumer viewed the entry for Alphabet Inc. on the Opensecrets.org website, which was published in the USA by the Centre for Responsive Politics. This stated that in 2020 the company and its employees had made $27,433,160 in political donations. 93.85% of this went to Democrats and 6.15% was given to Republicans. It also spent $8,850,000 on lobbying in 2020.

NOTE: OpenSecrets states: “The organization itself did not donate, rather the money came from the organization's PACs, their individual members or employees or owners, and those individuals' immediate family members. Organizations themselves cannot contribute to candidates and party committees. Totals include subsidiaries and affiliates.”

81 out of 97 Alphabet Inc lobbyists in 2020 had previously held government jobs.

Alphabet lost a whole mark under Political Activities.

Reference:

Open Secrets generic ref 2021 (5 January 2021)

In May 2020, Ethical Consumer viewed an article on the Guardian website titled 'Revealed: Google made large contributions to climate change deniers' and dated 11 October 2019. It stated:

"Google has made 'substantial' contributions to some of the most notorious climate deniers in Washington despite its insistence that it supports political action on the climate crisis. Among hundreds of groups the company has listed on its website as beneficiaries of its political giving are more than a dozen organisations that have campaigned against climate legislation, questioned the need for action, or actively sought to roll back Obama-era environmental protections.The list includes the Competitive Enterprise Institute (CEI), a conservative policy group"

As a result, the company lost a whole mark in the Political Activities category.

Reference:

Revealed: Google made large contributions to climate change deniers (11 October 2019)

Conservative party leaders, including Chancellor George Osborne, were meeting with Google every three weeks in the run-up to its ‘sweetheart’ deal with the Treasury, the Mirror reported in January 2016.

Chancellor Mr Osborne, policy chief Oliver Letwin and ex-Tory chairman Grant Shapps were among 17 different Tory Ministers to hold face-to-face talks with Google bosses in at least 25 official meetings over the previous two years.

The details come to light as pressure mounts for an investigate into a deal struck between Google and HMRC that sees them paying the equivalent of just 3% in corporation tax on their vast profits in the ten years from 2005.

The Mirror adds that "there is no suggestion any rules were broken, and it is understood the meetings covered a broad range of topics."

However the paper questions the links between the company and the current tax deal as private talks were held every three to four weeks over two year period as the tax deal was being struck.

The paper also lists the following examples of teh closeness between the two organisations

The Tories spent £312,000 on Google adverts in the run-up to the May election. (Labour spent just £371.)

Google chairman Eric Schmidt spent five years as a business adviser to the Prime Minister between 2009 and 2015,

Schmidt also gave the keynote speech at the Tory Party conference last year.

Mr Osborne and Mr Schmidt have penned several joint articles for British newspapers,

Mr Osborne and Mr Schmidt attended the secretive Bilderberg conference together last year.

David Cameron has twice spoken at Google’s own conferences.

Mr Cameron also accepted a £14,000 trip to Google’s HQ in 2007, and met with Google bosses three times after becoming PM.

CCHQ spin doctor Amy Fisher is a former Google press officer, while backbench Tory MP Nigel Huddleston only quit his job with Google last May.

Google lost a whole mark under Political Activities as a result.

Reference:

Labour riven again as ruling committee boycotts G4S over links to Israel (26 November 2015)

On 4th September 2021, Ethical Consumer viewed Alphabet Inc.'s 2021 form DEF14A.

It stated that at least five members of staff received over £1 million in total compensation in 2021. The highest paid, Philipp Schindler, actually received $66.4 million.

Ethical Consumer deemed any annual amount over £1 million to be excessive. The company therefore lost a mark under Anti-Social Finance.

Reference:

SEC Form DEF14A (23 April 2021)

In July 2016, the Guardian online published an article titled 'European Commission files third anti trust charge against Google'. It said "the European commission has filed a third antitrust charge against Google, this time against its AdSense advertising business."

It accused "Alphabet’s Google of abusing its dominance in search to benefit its own advertising business, which has historically been the company’s main revenue stream." It also reinforced its existing charge against Google’s shopping service, which the regulator said received preferential treatment in search results.

European competition commissioner, Margrethe Vestager, said: “Google has come up with many innovative products that have made a difference to our lives. But that doesn’t give Google the right to deny other companies the chance to compete and innovate. We have also raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third-party websites, which stifles consumer choice and innovation.”

The commission said it had sent two “statements of objections” to Google and given its parent company, Alphabet, 10 weeks to respond. Google faces fines up to 10% of its global turnover for each case if found guilty of beaching the bloc’s antitrust rules.

A Google spokesperson said: “We believe that our innovations and product improvements have increased choice for European consumers and promote competition. We’ll examine the commission’s renewed cases and provide a detailed response in the coming weeks.”

The EU’s concerns around Google’s adverts relate to the company’s AdSense for Search platform, in which Google act for Search platform, in which Google acts as an intermediary for websites such as those of online retailers, telecoms operators or newspapers, with searches producing results that include search ads.

Google’s AdWords and AdSense programmes, which formed the bulk of Google’s $75bn (£56bn) in revenue in 2015, had been on the EC’s radar since 2010, after rivals complained about unfair advertising exclusivity clauses and undue restrictions on other advertisers.

The EU’s executive branch is already investigating whether Google gives preferential treatment to its own products, including Google Search and Chrome, in its Android operating system. Device manufacturers are obliged to place Google Search and Chrome on the primary home screen of Android devices, as well as other Google apps, if they want to provide access to the Google Play Store - the single largest source of third-party Android apps.

An update on the case on the European Commission website showed that on 20th March 2019 the European Commission had fined Google €1.49 billion for breaching EU antitrust rules. A press release dated 22nd June 2021, showed that the European Commission had opened a new investigation into possible anticompetitive conduct by Google in the online advertising technology sector

According to an article in the Washington Post titled 'Europe fined Google nearly $10 billion for antitrust violations, but little has changed' and dated 10th November 2020, the European Union had spent a decade pursuing Google on various antitrust charges, "ultimately fining the company nearly $10 billion for using illegal tactics to abuse its dominant position on the market". The article noted that Google continued to "dominate more than 90 percent of Europe’s search-engine market, just as it did before the E.U. probes began in 2010". It also reported that the US Justice Department had filed its own antitrust case against Google in October 2020.

Google lost half a mark under Anti-Social Finance as a result.

Reference:

European commission files third antitrust charge against Google (14 July 2016)

In May 2016, the Guardian reported online that Google faced a 3 billion Euro fine over its shopping services.

The European Union had accused Google of promoting its shopping service in internet searches at the expense of rival offerings in a case that has dragged on since late 2010. Several people familiar with the matter told Reuters last month they believed that after three failed attempts at a compromise in the past six years Google now had no more plans to try to deal with the allegations unless the EU changed its stance. The Telegraph cited sources close to the situation as saying officials planned to announce the fine as early as next month, but that the bill had not yet been finalised. Google will also be banned from continuing to manipulate search results to favour itself and harm rivals, the newspaper said.

Google lost half a mark under Anti-Social Finance as a result.

Reference:

Google faces €3bn fine over shopping service (15 May 2016)

On 4th September 2021, Ethical Consumer viewed Alphabet's family tree on the corporate information website D&B Hoovers. According to D&B Hoovers the company had holding companies based in Bermuda and Ireland - jursidications which were on Ethical Consumer's tax haven list at the time of writing. The company also had subsidiaries in Taiwan, Hong Kong and Singapore, although these were not considered at high risk of being used for tax avoidance purposes.

According to Alphabet's 10K Sec filing which was downloaded from the Securities and Exchange Commission, the company was registered in Delaware. Delaware was at the time of writing considered by Ethical Consumer to be a tax haven jurisidiction. The form contained no country-by-country reporting.

An internet search using the search terms “Alphabet tax policy statement country” found the company's 'UK Tax Strategy'. The strategy stated "We are committed to compliance with tax laws and practices.We continuously monitor changes to taxlegislation, ensuring that we take advice where appropriatefrom professional advisers." The strategy did not specifically discuss the issue of tax avoidance.

Google had also been heavily criticised by countries around the world for its tax avoidance methods. This included France, which in 2019 agreed to settle a tax fraud case with Google for EUR1 billion, after its tax authorities had raided Google's offices, following an investigation into its tax affairs, in 2016.

As a result, Alphabet Inc. received Ethical Consumer's worst rating for likely use of tax avoidance strategies and lost a full mark under Tax Conduct.

Reference:

Generic Hoovers ref (5 January 2021)

The Silicon Six and their $100 billion global tax gap, is a report published by the Fair Tax Mark which examined the tax conduct of Facebook, Apple, Amazon, Netflix, Google and Microsoft over the last decade.

It concludes that the corporation tax paid by the Silicon Six is much lower than is commonly understood. Over the period 2010 to 2019:
* the gap between the expected headline rates of tax and the cash taxes actually paid was $155.3bn
* the gap between the current tax provisions (the amount the companies were expected to pay) and the taxes actually paid was $100.2bn.

The report suggests that the bulk of the shortfall almost certainly arose outside the United States. Profits continue to be shifted to tax havens, especially Bermuda, Ireland, Luxembourg and the Netherlands.

Amazon has paid just $3.4bn in income taxes this decade, whilst Apple has paid $93.8bn and Microsoft has paid $46.9bn. This is a staggering variance, especially as Amazon’s revenue over this period exceeded that of Microsoft’s by almost $80bn.
Google came third out of six.

In June 2019, Google sought to put the record straight on their tax conduct and asserted that: “Google’s overall global tax rate has been over 23% for the past 10 years, in line with the 23.7% average statutory rate across the member countries of the OECD.” In fact, the cash tax paid as a percentage of profit was just 15.8%.

The trend of low current tax provision in connection with foreign profits continues in 2018, with just $1.25bn booked on $19.1bn of foreign profit, giving a booked current tax rate of just 6.5% - this is less than the company’s already low average for the decade, which is 7.1%.

TaxWatch have estimated that Google has avoided £1.3bn of taxes in the UK over the years 2012-2017
inclusive.

The company lost a whole mark in the Tax Conduct category.

Reference:

The Silicon Six and their $100 billion global tax gap (December 2019)

On 6th September 2021, Ethical Consumer viewed an article on the Guardian website titled 'Google shifted $23bn to tax haven Bermuda in 2017, filing shows' and dated to 3rd January 2019.

It reported that Google's parent company Alphabet had "moved €19.9bn ($22.7bn) through a Dutch shell company to Bermuda in 2017, as part of an arrangement that allows it to reduce its foreign tax bill, according to documents filed at the Dutch chamber of commerce". For more than a decade the arrangement allowed Google’s owner, Alphabet, to "enjoy an effective tax rate in the single digits on its non-US profits, about a quarter of the average tax rate in its overseas markets. The subsidiary in the Netherlands is used to shift revenue from royalties earned outside the US to Google Ireland Holdings, an affiliate based in Bermuda, where companies pay no income tax".

The tax strategy, known as the “double Irish, Dutch sandwich”, was legal but "under pressure from the European Union and the United States, Ireland in 2014 decided to phase out the arrangement, ending Google’s tax advantages in 2020".

Alphabet lost half a mark under Tax Conduct.

Reference:

www.theguardian.com/technology/2019/jan/03/google-tax-haven-bermuda-netherlands (3 January 2019)