Politician: Tech Firms Should Fight Terror or Pay Tax

John Lister's picture

A politician says online companies that don't do enough to help fight terrorism should be punished through the tax system. Ben Wallace's argument is based on the idea that one-off fines don't make enough difference to hugely profitable companies.

Ben Wallace, a British government politician responsible for security issues, called technology companies "ruthless profiteers" in an interview with the Sunday Times. He complained about some companies refusing to hand over details of users alleged to have encouraged or incited terrorism, saying the companies "will ruthlessly sell our details to loans and soft-porn companies but will not give it to our democratically elected government." (Source: bbc.com)

Tech Firms Inaction 'Costs Governments'

Wallace argues that financial penalties wouldn't be punitive but rather would compensate the government and country for the costs that result from sites being too slow to take down material aimed at radicalizing would-be terrorists. Wallace says the lack of action means the country has to spend more money on programs to prevent people turning to extremism and on increased surveillance and law enforcement.

It's a controversial proposal as normally the tax system isn't used as a form of punishment. Instead companies are usually fined for breaching specific regulations. Such fines are normally for a fixed amount but this can often make very little difference to the overall profits of giant businesses, even when the amount sounds large on the surface.

Tax Loopholes Could Scupper Plans

Critics point to a couple of drawbacks to the idea, beyond whether it's right in principle. One is that it could encourage companies to err on the side of caution and make more use of automated systems that sometimes falsely flag up content as inciting terror.

Another is that it's questionable whether tax measures would be effective. Because they operate in multiple countries (and can afford top tax lawyers), many large tech companies already use controversial measures to avoid paying taxes. That means they could find loopholes around any 'punishment' tax that's imposed. (Source: theregister.co.uk)

What's Your Opinion?

Should tech companies face penalties if they don't do more to remove inciteful content? If so, is the tax system an appropriate route to doing this? Would such measures make any difference to how companies act?

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Dennis Faas's picture

First I have to say, I had a good chuckle when I came across this statement: "It's a controversial proposal as normally the tax system isn't used as a form of punishment." I wholeheartedly disagree! If you are a small business, taxes (especially in Ontario) can easily cripple your business.

All jokes aside, this "tax" proposal simply won't take off. Even if it does, tech giants will find a way to worm out of it as a way to measure a "balance" between their earnings and losses. It's easier to slap them with simple, black-and-white, one-off punitive fines (repeatedly) than to "tax" their earnings especially if the earnings amount to zero due to supposed "write-offs".

russoule's picture

this is so out there that it isn't even funny.

what if the same thing were applied to bus lines that allowed terrorists to travel between cities? or airlines who didn't verify that Ahmed was a citizen and couldn't be a terrorist? or the company that sells gasoline would be taxed for not verifying that the gas is to be used in an automobile? or an information site that didn't let the government know of anti-government types like myself? everyone will be taxed for NOT doing the governments job?

let's take it to the extreme and tax restaurants for not determining if their customer has allergies. or the gas station who fails to determine if the car requires premium gas. or the street worker who doesn't notify the police that he/she saw something suspicious in the alleys.


bern's picture

In the UK satellite and terrestrial TV broadcasters (both the BBC and commercial) are regulated by Ofcom (The Office of Communications). They are responsible for ensuring that broadcasters meet required standards of quality, probity, decency, respect for minorities, the ban on extreme content and fairness and accuracy in factual programmes etc. During elections, all programmes must also be accurate, fair and balanced. Ofcom responds to complaints and has the power the power to censure, fine and revoke the broadcasting license for persistent offenses.

e.g.Russia Today has been censured more than once over misleading (fake news) reports re the BBC and events in Ukraine. They were "Breach of Rule 2.2 of the Broadcasting Code: factual programmes or portrayals of factual matters must not materially mislead the audience." Ofcom threatened to revoke its license if they persisted.

At the moment it does not cover internet broadcasters. Partly because legislation has not kept up with technology and partly because the likes of Netflix and Amazon have not caused problems. Soon 50% or more of viewing will be with non-traditional broadcasters and there is growing pressure to extend Ofcom's remit to cover all broadcasters including the likes of Facebook and Google. A first step could be fines (like the Germans are introducing) or GCHQ has the ability to block them from the UK if they ignore rulings.

However, there is a simpler and more effective measure. During the 60's commercial pirate pop radio stations sprung up around the UK. They broadcast from cheap old trawlers that were registered abroad and were anchored just outside the 12-mile limit in international waters and were thus untouchable. The government of the day simply introduced legislation to slap heavy fines (non-tax deductible ) on any company that advertised on them. This immediately cut off their revenues and they folded. They came onshore and complied with broadcasting legislation.

Hitting internet business models hard and in the pocket would also work wonders remarkably quickly. Large multi-nationals are already unhappy about their ads appearing next to questionable content. Heavy public fines and castigation would be the last straw.

bern's picture

It might not happen overnight but the regulators already have the social media companies in their sights and are targeting their advertisers already.

Snapchat supposedly has a minimum age limit of 13 but does nothing to check users ages. Many are much younger.

According to this week's The Sunday Times Business News, the British Advertising Watchdog rapped Diego (the multinational spirits group) over the knuckles for failing to take sufficient care to ensure that its Captain Morgan Rum adverts were not being regularly shown to minors (under 18).

Diago immediately pulled its advertising from Snapchat.