News You Can Use: Amazon’s split decision, new EU tech tax, FCC takes aim at ‘robocalls’
Here, we review through the hottest happenings in our industry, and provide some informed commentary on what these developments might mean for your business.
If you’re a marketing or technology professional, you should be taking time out of every week to catch up on the latest current events. Because, after all, being an informed consumer of the news isn’t just good civics — it’s great for business.
1) Amazon to split HQ2 locations between NYC and D.C. (NYTimes)
We’ve seen more than a year of will-they-won’t-they speculation over where the Seattle-based e-commerce giant Amazon will build their much-touted second headquarters. Indeed, the competition to be chosen as HQ2 has been equal parts amazing and ridiculous: The mayor of Kansas City, MO, reviewed 1,000 Amazon purchases and filmed an unboxing video, while the Atlanta suburb of Stonecrest promised to change its name to Amazon, GA.
But in a move that’s sure to raise some eyebrows, news has leaked that instead of a single location for HQ2, Amazon is planning to split their second headquarters between New York City’s Long Island and the Alexandria suburb of Washington, D.C. Analysts note that Amazon already has more employees in the D.C. and NYC regions than anywhere else outside of Seattle, which would explain the split decision.
For much of 2017 and 2018, more than 240 municipalities across the U.S. attempted to lure the tech giant with marketing gimmicks, promises of new infrastructure, workforce development programs, and billions upon billions in tax incentives. With the news that HQ2 is being split between two cities, it remains to be seen whether NYC and D.C. will continue to offer Amazon their full incentive packages, or whether they will attempt to renegotiate. (Given that NY Governor Cuomo has pledged to change his name to ‘Amazon Cuomo,’ our money’s on the former.)
After nearly a year of negotiations, the European Union is reportedly close to passing a comprehensive new tax scheme that would impose additional charges upon internet giants like Google, Facebook, and Apple. Dubbed the “Fair Taxation of the Digital Economy Act” by the European Commission, the rules would “ensure that digital business activities are taxed in a fair and growth-friendly way in the EU.”
At issue is the fact that digital firms pay much less tax in the EU for transactions and services compared to their brick-and-mortar counterparts. Under the new plan, EU member-states would impose a 3 percent levy on the digital revenues of large firms that have been accused of dodging tax payments by routing their profits to the low-tax EU nations like Ireland. As a result, massively profitable firms like Amazon pay unusually low tax rates on their earnings.
However, several EU members — including Germany and France, two key players — have held back from fully endorsing the EU’s new plan in a bid to push further reforms of the EU’s minimum corporate tax rates.
While opposition to taxation and regulation are shibboleths in the tech industry, the EU’s plan is largely sound: Bigger tech firms have an unfair advantage over small businesses because of how they’re able to avoid paying taxes on corporate profits. By imposing a small additional tax on these already-massively-profitable companies, the EU is leveling the playing field for smaller businesses, encouraging competition and innovation.
In a surprise move, Amazon and Apple have announced a partnership that will allow Apple to sell devices directly on Amazon’s storefront for the first time ever. Under the new agreement, Amazon will being listing the newest Apple and Beats products as soon as they are released — such as the forthcoming iPhone XS and XR. In return, Amazon will de-list or remove any third-party resellers who sell Apple products on the site.
The move is a serious blow to Apple resellers and refurbishers, who previously were the only way to purchase Apple devices on Amazon. It’s also part of Apple’s increasingly strict crackdown on resellers, refurbishers, and other third parties — the company has come under criticism in recent years for consumer-unfriendly practices like voiding warranties for devices that have been repaired by a third party. (Apple was forced to backtrack following harsh public outcry over the move.)
While this partnership will no doubt pad Apple’s profit margins for this quarter, it also serves as a stark reminder that retailers are more dependent than ever on Amazon, which has become increasingly bold when it comes to leveraging its considerable economic clout to deter rivals and crowd out the competition.
Google has faced a historic backlash after it was revealed that a top executive was paid $90 million to exit the company after being accused of sexual harassment. Workers at Google offices around the world staged mass walkouts over Google’s handling of the dismissal, as well as what protesters allege are similar cases of sexual harassment that went unaddressed.
In a company-wide email, Google CEO Sundar Pichai has announced that the company will end forced arbitration for sexual misconduct claims, improve its process for internal investigations, offer greater transparency about harassment claims and outcomes, and create new support systems for employees who come forward.
While Google’s move can rightly be criticized as reactive rather than proactive, we applaud any and all efforts by tech companies to improve their internal culture. Sexual harassment has no place in any industry, and firms that refuse to recognize this fact will continue to lose the talent that made them so exceptional in the first place.
Ajit Pai, the chair of the U.S. Federal Communications Commission, has sent a letter to the chief executives of 13 major telecoms and service providers demanding that they implement a system by 2019 to combat the billions of ‘robocalls’ and other unwanted calls received by Americans each month.
The letter follows a May demand by the FCC for the industry to adopt a ‘call authentication system’ that would end the use of illegitimate ‘spoofed’ numbers, where the caller disguises their number from caller ID systems. Canada put similar protections in place this year, and any U.S. system would likely mirror that of our neighbors to the north.
“I am calling on those falling behind to catch up,” Pai wrote in the letter. “If it does not appear that this system is on track to get up and running next year, then we will take action to make sure that it does.”
Here at CallRail, we’re doing our part to combat robocalls.