Tony Blair calls for transatlantic crackdown on giants like Facebook

Tony Blair calls for a ‘transatlantic alliance for technology’ with the US to force giants like Facebook and Google to obey ‘ethical standards’

  • Mr Blair said EU and US should make tech giant pay fairer tax and protect data 
  • The ex Labour leader said the rules need to be rewritten for the digital age
  • It comes amid growing anger at the amounts of tax paid by digital companies
  • Chancellor said UK will be one of the first countries to impose new digital tax 

Tony Blair has called for a ‘transatlantic alliance’ with the US to force tech giants like Facebook and Google to obey ‘ethical standards’.

The ex Prime Minister said the EU and America should set up new regulators to force the companies to pay fairer tax rates and do more to protect people’s data.

His intervention comes amid growing alarm that Silicon Valley giants are paying paltry amounts of tax in countries where they rake in huge revenues.

While the Facebook data harvesting scandal, which saw the profiles of 87 million people improperly shared, sparked calls for stronger privacy laws.

Philip Hammond announced on Monday that Britain is set to become one of the first countries in the world to impose a new ‘digital tax’ on tech giants.

And in an article, Mr Blair has called for the two Western blocs to go further and fundamentally rewrite ‘the rules for the internet age’.

Tony Blair (pictured in London earlier this month ) has called for a ‘transatlantic alliance’ with the US to force tech giants like Facebook and Google to obey ‘ethical standards’


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But his comments could spark a backlash with Donald Trump’s administration which is protectionist of American business interests.

Mr Blair said the regulators should focus on making the big tech giants stick to a new ethical code which places a ‘new responsibility on these firms, with standards built in unison with the communities they serve’.

He said that big firms should also be prevented from quickly buying out smaller start-ups – using heir immense economic power to squeeze out any up and coming competition.

UK LEADS THE WAY WITH DIGITAL TAX 

The UK Digital Services Tax will make the UK the firm developed country to impose such a levy.

The announcement comes as dozens of countries are contemplating taxes on digital services sold by companies such as Google and Facebook. 

Companies typically pay their taxes where they are based. 

But while local governments can impose a sales tax on physical goods in shops and restaurants, that has not been the case with online service providers.

And in the European Union, foreign companies like Amazon, Google and Facebook pay what tax they owe in the country where they have their regional base – usually a low tax haven like Ireland. 

So their business generates little to no tax revenue in countries, like the U.K., where they have significant operations. 

 

 

While firms should have to pay tax to a country according to how many users and customers it has there, rather than being allowed to funnel their profits around the world to cut their tax bills. 

He wrote: ‘I would focus on the rights and well-being of consumers, with more powers handed to the individual to understand how their data is being used and by whom.

‘It would also renew competition policy to be relevant for the economies of today.

‘Practically, this means a stronger process to stop large companies buying out potentially competitive start-ups.

‘With international tax reform unlikely to be forthcoming in the near future, it would also be given powers to place companies temporarily in a corporate-tax regime which allocates profits geographically in proportion to active users.

‘Together the reforms would place the US and the EU at the forefront of setting ethical standards for tech worldwide. But importantly, they would encourage, not stifle innovation.’

He made the comments in an article called ‘Introducing A New Deal for Big Tech: Next-Generation Regulation Fit for the Internet Age’.

He said that the growing influence of tech giants means that ‘now, more than ever, the private incentives of firms need to align with the public interest’.

The ex Labour leader added: ‘Many parts of the developing world have begun to converge economically with Europe, while China is vying with the US.

‘This should not be a zero-sum game; it is simply the new reality.’

He said that politicians have been ‘complicit’ in allowing the Silicon Valley giants to run rampant.

And he said: ‘Today, the internet is not just another sector: it has escaped into and disrupted all of them.

The Facebook data harvesting scandal, which saw the profiles of 87 million people improperly shared, sparked calls for stronger privacy laws (pictured, Facebook founder and CEO Mark Zuckerberg at a conference in May in California)

‘To find a sustainable solution, policymakers need to understand how the world has changed. Instead of quick-fixes or knee-jerk reactions, we need regulation fit for the internet age.’

His call for global reform comes after the Chancellor announced in Monday’s Budget the UK would impose a new 2 per cent digital tax on big tech giants. 

Mr Hammond  said he would have preferred a ‘global agreement’ but has decided to ‘go it alone’ in taxing companies like Google on their advertising revenue.

But the plan was blasted by the digital industry, with industry leaders warning that firms could pull their investment just when Britain’s economy is already facing Brexit uncertainty.

Julian David, said, chief executive of techUK, which represents digital companies, said it ‘risks undermining the UK’s reputation as the best place to start a tech business or to invest’. 

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