Simon Brooks (@smnjbrks), Senior Account Director at MSL London, argues that despite high profile criticism, Google has done well in advancing its arguments on tax
In an article in the Observer on Sunday, Google’s executive chairman, Eric Schmidt, responded to – and attempted to advance – the debate about corporate tax payments. Schmidt’s basic point is that companies do not set tax policy; governments do. If companies are taking advantage of differences in international approaches to tax, well, that’s hardly surprising. Don’t hate the playa, hate the game, as Ice-T would have it.
This column isn’t really the place to judge the true merits of his arguments, although for me there did seem to be an element of sophistry in many of the points made (that’s Schmidt, not Ice-T, to be clear). What I do feel better placed to comment on is the PR outcomes Google has derived from their approach to the issue.
Following the Observer article, Ed Milliband weighed in. At a Google-hosted event, no less, the Labour leader called out Google for its behaviour. No-one wants to be told by a man who could be the next Prime Minister that they are “wrong” or that they have “deeply disappointed” him. Especially not when they’ve invited him into their ‘Big Tent’. But does Google actually have anything to worry about?
From a PR perspective, Google should actually be feeling fairly pleased with how things have panned out. The Prime Minister has been far more measured about passing judgement on Google’s tax affairs than he was about Jimmy Carr’s. Even more significantly, he’s addressed one of Google’s main suggestions, helping to marshal a Europe wide agreement to work together to deliver greater transparency in tax. So, Google has been seen to shift the leader of a G8 economy. Perhaps Schmidt’s slip that Google was a “country” when speaking on Wednesday was not that Freudian after all?
The other point to consider is that widespread public disgust with tax avoidance does not necessarily translate into disgust with tax avoiders. Yahoo is not about to become anyone’s favourite search engine just because Google is ‘closing’ its sales from its Dublin office. Most consumers are already aware that Amazon might not be paying the same percentage of tax on their profits as Waterstones – and are still using their Kindles.
Although Starbucks suffered some poor headlines - and a small drop in profits – after UK Uncut and the Public Accounts Committee turned their attention on them, there haven’t been any boarded up coffee shops on the High Streets I’ve been walking down.
Poor business practices, or a failure to take sufficient heed of public opinion, can have a devastating effect on the reputation and profitability of a company. However, Google appears to have taken an informed decision that that it can withstand the heat, that people will continue to use its services and it will continue to be profitable, regardless how much tax it pays and the jurisdictions it pays it in. Given the sophisticated, coordinated way it advanced its points, it is clear that its communications function has been fully involved in developing and delivering their strategy – and it appears to be an approach that is working.
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The B2B PR Blog is a resource for both PR professionals and people working in B2B industries on how to devise and implement successful B2B PR campaigns. The blog is managed by B2B PR specialist Heather Baker, founder TopLine Comms, an inbound marketing, B2B content marketing agency and proud HubSpot partner agency and takes contribution from anyone sensible in the industry with something intelligent to say. Follow Heather on Twitter @TopLineFounder or contact the B2B PR Blog editorial team via email on [email protected].
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