Chrystia Freeland

Business, taxes and responsibility

Chrystia Freeland
May 3, 2013 16:13 UTC

In recent months, people and their politicians around the world have been astonished to learn that big companies and billionaires will go to extraordinary lengths to pay lower taxes.

Thanks to the work of the International Consortium of Investigative Journalists, based in Washington, we have discovered that some of the most prominent public figures in the world have banked their fortunes in international tax havens, beyond the scrutiny of their national treasuries.

Meanwhile, Tom Bergin, my Reuters colleague, has become the scourge of the top U.S. multinationals by revealing their low effective tax rate in Britain. Mr. Bergin has found that between 1998 and 2012, Starbucks paid less than 9 million pounds, or about $14 million, in British taxes while registering sales of more than 3 billion pounds. According to statutory filings, Google made $18 billion in revenue in Britain from 2006 to 2011, and paid just $16 million in taxes.

Open the door to the top executives’ suite and you will hear howls of rage over the backlash these revelations have provoked. There is, from the corporate point of view, something a little disingenuous happening here. After all, countries, states and cities have spent the past several decades openly competing to set the lowest corporate tax rates in an effort to attract business. The fact that multinationals would respond to these incentives and turbocharge them with some international tax arbitrage is about as shocking as the discovery of gambling in Casablanca.

After all, as Lord Clyde observed, in a 1929 British tax case: “No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores.”

When the hacker ethos meets capitalism

Chrystia Freeland
Feb 11, 2011 14:25 UTC

The uprising in Egypt has provoked the familiar “realism-versus-idealism” foreign policy debate in many Western capitals, as diplomats and politicians struggle to balance their ideological sympathy for the protesters against fears of chaos and the threat of a future anti-Western and anti-Israel policy from Cairo if the people do win.

What we have paid less attention to is that the demonstrations have forced some of the world’s hottest technology companies to engage in a very similar debate. The conclusions these technorati end up drawing may be as significant as the verdicts of Western governments. This new intellectual battleground is a further sign that in the age of the Internet and the global economy, foreign policy doesn’t belong just to professionals or to states any more.

The quandary Egypt poses for technology companies – particularly the power troika of Google, Facebook and Twitter – goes far beyond the classic corporate social responsibility concerns that have become standard operating practice at big multinationals.

America’s culture of no

Chrystia Freeland
Nov 26, 2010 14:49 UTC

Saying ‘yes’ is one of the dominant tropes of American life. America’s favorite politicians are the sunny optimists: think Ronald Reagan and “Morning in America.” In fact, the culture is so insistent on looking on the bright side that, as Barbara Ehrenreich complained in a recent book, injunction can be heard on the cancer ward. You might even say — and some historians have — that Americans themselves have been pre-selected for their optimism: you or your ancestors had to have a powerful faith in the New World and the opportunities here to make the trek over in the first place.

That’s why when I interviewed Nikesh Arora, Google’s head of sales, operations and business development at a media conference last week, one of his comments had particular resonance with the live midtown Manhattan audience and in the blogosphere shortly afterwards. Google, Arora said, works hard to create “a culture of yes.”

Arora described the Google approach as an “inversion” of the attitude in more traditional companies, where “everybody in management is trying to look at where the flaw is when somebody is presenting. Everybody is trying to figure out what’s wrong with their plan.” At the Googleplex, by contrast, “we’re going to say what’s right with it, let’s find a way to say yes.”

Google’s culture of yes

Chrystia Freeland
Nov 19, 2010 16:25 UTC

Nikesh Arora, Google’s President of Global Sales Operations and Business Development, spoke to Chrystia yesterday at a panel during the Paley Center for Media’s November International Council meeting. Arora explained how Google is able to keep its garage-workshop spirit of innovation even as the company swelled to 20,000 employees. The key, he said, was to establish a “culture of yes” where the default option is for management to approve employees’ new ideas andprojects rather than trying to nitpick and say no. Several of Google’s most recent initiatives, from driverless cars to a new offshore power grid to promote wind power, were the byproduct of this bottom-up process.

In response to Chrystia’s question about whether Facebook’s new e-mail service will steal users away from Google, Arora said the “internet is not a zero-sum game.” He predicted that in five to eight years, 80 to 90 percent of people’s time will be spent on internet-enabled devices, and in such a world, it would be impossible for any one company to dominate all online behavior.  Arora foresaw a future in which there are 15 to 20 players that provide the most popular online services, and that he would include Google and Facebook in that list.

Finally Arora shared his outlook for what areas Google is investing in most heavily.  He said the company’s focus on advertising, while sizable, is aimed only at the 10% of the $600 – $700 billion ad market that is online.  In five to eight years, he predicted 30 to 50 percent of the ad market will shift to online.  Google will be poised to take advantage of that shift, as well as the shift to personalization and interactivity in ads that will occur in the near term.

Exclusive: Google CEO unleashed

Chrystia Freeland
Sep 17, 2010 13:42 UTC

Earlier this week at the Google Zeitgeist conference, the company’s chairman and CEO Eric Schmidt said there was a divergence between his sector and the rest of the economy. While high-tech firms are currently receiving new investments, rolling out new products, and hiring new workers, the broader economy is at a standstill. “The damage that was done by the recession was much more severe than people acknowledge,” Schmidt said.

As the head of one of Silicon Valley’s most profitable companies and an ally of President Obama, Schmidt defended the White House from the charge that it is anti-business. He said recent events like the financial crisis and the BP oil spill showcased the need for government regulation of the private sector.

That said, the Google chief argued his own industry “should be as unregulated as possible,” given the pace of change and the plurality of options available to consumers.