• Wednesday, January 02nd, 2013

By Geeta Dalal

Multinational companies have been trying new policies and strategies to maximise their profits. Sometimes these policies are legally sustainable whereas at other times they violate laws and regulations of one or more nations.

Recently it was reported that Indian government would ascertain beneficiary in Walmart probe to ascertain possible violation of Indian laws. Similarly allegations of tax avoidance have been labeled against Amazon, Google and Starbucks regarding UK Tax Laws. Apple has been fined by Beijing Court for unauthorised sale of e-book. An e-book price escalation lawsuit has been settled by Penguin Group. The European Commission and publishers’ settlement for e-book price fixing is also known to public.

These developments took place in the year 2012. The year 2013 may see more regulatory actions against big multinational companies and technology companies. The Ireland route of tax management may also be closely monitored. In fact, on 21 December 2012, an Agreement to Improve International Tax Compliance and to implement the Foreign Account Tax Compliance Act (FATCA) was entered into between Ireland and United States.

Not only taxation issues but even anti trust issues may see more focus. For instance, Google is already facing an antitrust investigation relating to its search services in the hand of European Union (EU) and Federal Trade Commission (FTC). Google has already settled $22.5 million settlement with FTC over charges that it bypassed Safari browser privacy settings that blocked cookies. Samsung Electronics will be facing charges from the European Commission for breaking antitrust rules in its refusal to provide competitors like Apple access to its technology. The European Commission believes that Samsung abused its dominant position in the market by filing patent lawsuits against its rival Apple

Meanwhile, the FTC is investigating Google over possible antitrust violations and will subject Facebook to audits of its privacy policy for the next 20 years. FTC would ascertain whether Google’s search engine results favour Google products over its rivals’. Although FTC was ready to settle that case before the holidays, without harsh remedies, late last month it shelved the inquiry and put stronger penalties back in play. A resolution is expected in January.

Regarding Facebook, FTC negotiated a consent order with Facebook to settle charges that it had engaged in “unfair and deceptive practices” when changes in its settings revealed personal information that Facebook users had regarded to be private. As part of the settlement, Facebook agreed to audits of its privacy policies for 20 years.

Facebook was also in controversy recently when its subsidiary, Instagram, proposed to deploy users’ pictures to serve targeted advertisements. Facebook had to change that plan due to public protests. This is a good sign for privacy protections of the users/consumers of these companies.

Unfortunately, public awareness about privacy protection and data protection is still very poor in India. Even we have no dedicated privacy protection laws in India and data protection laws in India. However, this does not mean that multinational companies and technology companies can take Indian users and consumers lightly.

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