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Google and Facebook currently control close to two-thirds of global advertising revenue. While dominating the online advertising market, these two companies have thus far avoided paying adequate taxes.
This CAMRI policy brief presents a new policy innovation, the online advertising tax. Considering the key role of user activity and user data for the value of Google and Facebook’s services, it explains how digital advertising companies’ revenues could be taxed based on the respective country in which targeted users are located.
The author reviews existing policy arguments and policy options and sets out practical steps to ensure that tax avoidance by online advertising companies is mitigated. Furthermore, he illustrates how tax revenues could be used to support public service internet platforms.
Book Details
Online advertising will soon form the largest share of global advertisement revenues. Google and Facebook netted profits of US $29 billion in 2016. While these two giants control more than 66% of all online advertising revenues complex legal company structures have minimised their tax liabilities. This extended policy report considers where they should be taxed and where the value of their activities is actually created. It argues that tax paid by those platforms should be levied in the country where platform users are located when they click on or view an advertisement. Furthermore, the report examines the practical steps needed to ensure transparent accounting of taxed transactions in order to avoid long term negative effects for media and democracy.
Considering counter-arguments the author makes the case for an online advertising tax alongside a public service Internet strategy that could support other viable platforms and counter the dangers of duopoly or oligopoly and the high risks of financial bubbles in a world where advertising is the Internet's dominant business model.
Book Details
Will be part of the Critical Digital and Social Media Studies series
Not since Marx identified the manufacturing plants of Manchester as the blueprint for the new capitalist society has there been a deeper transformation of the fundamentals of our social life. As capitalism faces a series of structural crises, a new social, political and economic dynamic is emerging: peer-to-peer. This book asks what is peer-to-peer (P2P)? Why is it so important to building a commons-centric future? And how could this happen? Using a political economy framework this book discusses various cases exemplifying P2P commons-orientated value models. This book aims to critically intervene through proposals for a commons transition strategy. In this way it illustrates how state, market and civil society can build more inclusive and sustainable institutions.
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