Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Google fined in India for search bias

telegraphindia.com

Post reply on HN
Print view View original

11–20 of 23 posts

Re: Google fined in India for search bias

#11

Post by gtirloni »

ipsum2 wrote: post #7

It's very absurd that Google is being fined for what it puts on its own website. > The DG also recorded that Google was not required to pay any monetary consideration for its house ads which gave it an additional competitive edge. Yes, it doesn't make sense to give money to yourself. > Google shows two types of commercial units in India: shopping units which display ads for product offers of merchants; and flight uni…

*> Yes, it doesn't make sense to give money to yourself.

At Google's size, there are extra accounting processes that you should follow.

You might be looking at Google like a single giant thing while in fact it's a complex arrangement of companies and departments underneath.

Re: Google fined in India for search bias

#12

Post by wtfstatists »

sundarurfriend wrote: post #10
ipsum2 wrote: post #7

It's very absurd that Google is being fined for what it puts on its own website. > The DG also recorded that Google was not required to pay any monetary consideration for its house ads which gave it an additional competitive edge. Yes, it doesn't make sense to give money to yourself. > Google shows two types of commercial units in India: shopping units which display ads for product offers of merchants; and flight uni…

You should take some time to educate yourself before calling things "very absurd" and making comments that are poorly informed and barely make sense. This is how anti-monopoly laws work; Google can be fined for what it puts on "its own website" much like Microsoft was fined for bundling Internet Explorer with "its own OS" - your actual product or service must be distinct from your advertising and marketing, because d…

Your explaination is incomplete. Its based on anti-monopoly laws being reasonable which you have yet to prove.

Re: Google fined in India for search bias

#13

Post by sundarurfriend »

tpaschalis wrote: post #3

One important part for people that might not have read the article is the percentage-of-revenue nature of the fine, something that is also being used in the EU "for breaking EU Competition Law". (I don't know how cases like these are handled in the US). I think that such policies are more likely to make giant corporations think twice about abusing their market position. > "The penalty was calculated at the rate of 5…

Yeah, I too like that aspect of the fine.

And while the particular amount is tiny considering the whole of Google, it is apparently 5% of what Google earned in those years from its "Indian operations" - and that revenue drop and profit/loss implications will matter in internal decisions, and will be significant when the profitability of this arm of operations is considered internally. And that will in turn have direct and indirect implications for internal management and decision-making. Nothing dramatic of course, given they can still get away with a lot, but this is not a trivial fine or ruling like many seem to be assuming.

Re: Google fined in India for search bias

#14

Post by mcny »

gtirloni wrote: post #11
ipsum2 wrote: post #7

It's very absurd that Google is being fined for what it puts on its own website. > The DG also recorded that Google was not required to pay any monetary consideration for its house ads which gave it an additional competitive edge. Yes, it doesn't make sense to give money to yourself. > Google shows two types of commercial units in India: shopping units which display ads for product offers of merchants; and flight uni…

*> Yes, it doesn't make sense to give money to yourself. At Google's size, there are extra accounting processes that you should follow. You might be looking at Google like a single giant thing while in fact it's a complex arrangement of companies and departments underneath.

> At Google's size, there are extra accounting processes that you should follow.

I've always assumed when I see an ad for Google Chrome in the sponsored section in Google web search that it is money coming out of Google Chrome's marketing budget. So, it should technically count as revenue for Google web search.

Which is why I think corporate taxes on profit is silly. Taxes should be based on revenue, not on profit. That you choose to reinvest all of your profits back into the company should be immaterial. If a corporation has 1% of its revenue as profit vs another corporation has 25% of revenue as profit is not our problem.

Re: Google fined in India for search bias

#15

Post by adanto6840 »

mcny wrote: post #14
gtirloni wrote: post #11

Earlier quoted context omitted.

*> Yes, it doesn't make sense to give money to yourself. At Google's size, there are extra accounting processes that you should follow. You might be looking at Google like a single giant thing while in fact it's a complex arrangement of companies and departments underneath.

> At Google's size, there are extra accounting processes that you should follow. I've always assumed when I see an ad for Google Chrome in the sponsored section in Google web search that it is money coming out of Google Chrome's marketing budget. So, it should technically count as revenue for Google web search. Which is why I think corporate taxes on profit is silly. Taxes should be based on revenue, not on profit. T…

One arm of Google paying another arm of Google money should end up being a zero sum game when it comes to profits.

For a global corporation, it may (and likely does, potentially advantaged even) have tax implications -- but from a general profit/loss perspective it's still basically zero sum (though may actually cost them money in lost revenues/inventory in practice, which presumably gets booked as a liability if it's without compensation).

Re: Google fined in India for search bias

#16

Post by [deleted] »

mcny wrote: post #14
gtirloni wrote: post #11

Earlier quoted context omitted.

*> Yes, it doesn't make sense to give money to yourself. At Google's size, there are extra accounting processes that you should follow. You might be looking at Google like a single giant thing while in fact it's a complex arrangement of companies and departments underneath.

> At Google's size, there are extra accounting processes that you should follow. I've always assumed when I see an ad for Google Chrome in the sponsored section in Google web search that it is money coming out of Google Chrome's marketing budget. So, it should technically count as revenue for Google web search. Which is why I think corporate taxes on profit is silly. Taxes should be based on revenue, not on profit. T…

[deleted]

Re: Google fined in India for search bias

#17

Post by nothrabannosir »

mcny wrote: post #14
gtirloni wrote: post #11

Earlier quoted context omitted.

*> Yes, it doesn't make sense to give money to yourself. At Google's size, there are extra accounting processes that you should follow. You might be looking at Google like a single giant thing while in fact it's a complex arrangement of companies and departments underneath.

> At Google's size, there are extra accounting processes that you should follow. I've always assumed when I see an ad for Google Chrome in the sponsored section in Google web search that it is money coming out of Google Chrome's marketing budget. So, it should technically count as revenue for Google web search. Which is why I think corporate taxes on profit is silly. Taxes should be based on revenue, not on profit. T…

> That you choose to reinvest all of your profits back into the company should be immaterial.

But a guiding principle of taxes is: discouraging unwanted behaviour (or encouraging, through tax cuts / subsidies). We want to encourage corporations to invest, i.e. "putting the money back into the economy". Keep buying those new machines, upgrading your assembly line, upgrading your fleet of cars, for ever increasing efficiency and economic activity.

If you're talking about one company investing buy buying products from itself (like Google is, here), then hopefully the money one branch deducts from its revenue becomes additional profits for the other branch of the same company.

Sure, in theory, practice and theory are equal. In practice, they're not. Tons of loopholes exist around just this aspect of accounting and tax law. But there is at least a theoretical reason to tax profits, over revenue.

Re: Google fined in India for search bias

#18

Post by IanCal »

mcny wrote: post #14
gtirloni wrote: post #11

Earlier quoted context omitted.

*> Yes, it doesn't make sense to give money to yourself. At Google's size, there are extra accounting processes that you should follow. You might be looking at Google like a single giant thing while in fact it's a complex arrangement of companies and departments underneath.

> At Google's size, there are extra accounting processes that you should follow. I've always assumed when I see an ad for Google Chrome in the sponsored section in Google web search that it is money coming out of Google Chrome's marketing budget. So, it should technically count as revenue for Google web search. Which is why I think corporate taxes on profit is silly. Taxes should be based on revenue, not on profit. T…

> Taxes should be based on revenue, not on profit.

This means that every layer in a series of transactions to the customer would add costs. Great for the biggest companies who can do everything in house, terrible for smaller companies acting in a chain.

A massive company who buys raw materials and produces everything in house and sells for £1000 would pay tax on revenue of £1000 per widget.

A series of small companies may have:

Refinery: revenue £100

Part production: revenue £200

Construction: revenue £300

Wholesaler: revenue £400

Brick and mortar store: revenue £500

Now the massive company pays tax on £1000 but this series of companies pays tax on £1500.

Re: Google fined in India for search bias

#19

Post by mijamo »

IanCal wrote: post #18
mcny wrote: post #14

Earlier quoted context omitted.

> At Google's size, there are extra accounting processes that you should follow. I've always assumed when I see an ad for Google Chrome in the sponsored section in Google web search that it is money coming out of Google Chrome's marketing budget. So, it should technically count as revenue for Google web search. Which is why I think corporate taxes on profit is silly. Taxes should be based on revenue, not on profit. T…

> Taxes should be based on revenue, not on profit. This means that every layer in a series of transactions to the customer would add costs. Great for the biggest companies who can do everything in house, terrible for smaller companies acting in a chain. A massive company who buys raw materials and produces everything in house and sells for £1000 would pay tax on revenue of £1000 per widget. A series of small companie…

Now I wonder if we could fix that by taxing only the difference.

And we could call it Value Added Tax!

Re: Google fined in India for search bias

#20

Post by eastWestMath »

ipsum2 wrote: post #7

It's very absurd that Google is being fined for what it puts on its own website. > The DG also recorded that Google was not required to pay any monetary consideration for its house ads which gave it an additional competitive edge. Yes, it doesn't make sense to give money to yourself. > Google shows two types of commercial units in India: shopping units which display ads for product offers of merchants; and flight uni…

Wouldn’t you be paying sales/service tax on Google ads, and by not paying for its own ads Google circumvented those taxes giving itself a competitive advantage?
Post reply on HN