The Circuit: Facebook joins human rights group
Facebook joins the Global Network Initiative: Facebook announced Wednesday that it is joining the Global Network Initiative, which asks companies to commit to certain standards when it comes to protecting the freedom of expression and Internet privacy rights.
In a release, Facebook vice president of communications Elliot Schrage said, “Advancing human rights, including freedom of expression and the right to communicate freely, is core to our mission of making the world more open and connected.”
Adding Facebook and its large user base to the initiative, GNI executive director Susan Morgan said, “puts GNI in an even better place to press governments to fulfill their obligations to protect rights online.”
Facebook, teens and privacy : The Pew Center for Internet and American Life has found that Facebook’s appeal among young people is dropping, with the report noting that some teen users dislike that “drama” on the site but maintain their profiles to keep in touch with the teenage social scene.
The study also found that while teens are sharing more information about themselves then they have in the past, they’re also taking more steps to protect their online privacy. Sixty percent of teen Facebook users told researchers that they keep their profiles private and feel comfortable that they understand how the settings work.
Apple CEO defends tax strategy: Apple chief executive Tim Cook was defiant in his defense of the firm’s tax strategies before a Senate subcommittee, The Washington Post reported. While Cook said he believes that the U.S. corporate tax code could be reformed, he also was firm in stating that Apple pays the taxes it owes and does not use gimmicks to shift profits to lower-tax territories overseas.
Cook’s appearance on the Hill marked a departure from Apple’s traditionally hands-off approach to Washington, the report noted, something that Cook recognized in his testimony.
“While we have never had a large presence in Washington, we are deeply committed to our country’s welfare,” Cook told members of the Senate’s Permanent Subcommittee on Investigations.
Microsoft rivalries, old and new, come with new Xbox:With the new Xbox One, Microsoft is taking on not only Sony and Nintendo for the gaming sphere, but also Amazon, Netflix, Google and Apple in the race for who will dominate the living-room TV.
As the company unveiled its new console Tuesday, it focused heavily on the multimedia features, such as the ability to stream live television (though the company was light on details about how) or to make calls over Microsoft’s Skype service. The new focus shows that it’s looking to take on set-top box and smart television makers as well as its fellow gaming consoles.
Apple CEO Tim Cook says U.S. should lower corporate tax rate
Apple chief executive Tim Cook told a Senate panel Tuesday that the U.S. tax code needs a dramatic overhaul with the overall corporate tax rate, currently at 35 percent, falling to about 20 percent.
Testifying before the before the Permanent Subcommittee on Investigations, Cook said the high tax rate has prevented companies from repatriating their massive cash holdings overseas. So, he proposed a tax rate of below 10 percent on those offshore funds.
“The rate on bringing back foreign earnings, to incent huge number of companies, would have to be a single-digit number,” Cook said. But he said that wouldn’t mean Apple would get any special treatment. “By doing that, we would wind up in a revenue-neutral area. Some companies would pay more; we would be one of them.”
Cook and two other top Apple officials came to Capitol Hill to face questions about the tech giant’s overseas tax practices. Some lawmakers believe Apple and other multinational corporations’ use of legal loopholes in the tax code may be giving them an unfair advantage over smaller, domestic companies.
Sen. Carl Levin, the chairman of the subcommittee, one of Apple’s toughest critics, challenged Cook and the other executives by asking whether Apple would bring back the cash reserves it holds overseas if the United States lowered the tax rate on repatriation. Apple executives have said the company has no current plans to repatriate the reserves under the current rate.
Levin also said that Apple should not “kid us" about the impact that its decision to set up subsidiaries in Ireland has on U.S. tax revenue, closing by saying that what Apple is doing is “not right.”
Lawmakers grill Apple’s Tim Cook, other executives on taxes
Lawmakers had pointed questions for Apple chief executive Tim Cook and two other top company executives Tuesday at a Senate subcommittee hearing examining the Apple’s tax practices.
As The Washington Post reported, Apple is the latest technology firm to come under fire from Congress over its offshore accounting practices. Apple’s status as a legend in the tech industry — it was the most valuable company in the world as of Monday — makes it one of the highest-profile corporate firms to come under scrutiny for its use of legal loopholes in the tax code, which some lawmakers say is a ruse to avoid paying U.S. taxes.
Cook opened by defending his company against accusations that it uses tax loopholes to shift profits outside the United States and avoid U.S. taxes.
“We pay all the taxes we owe, every single dollar,” Cook told the committee.
But senators on the panel, particularly committee chairman Carl Levin (D-Mich.) and John McCain (R-Ariz.), repeatedly asked for more details about the company’s operations in Ireland. The senators were aiming to illustrate how Apple’s use of foreign subsidiaries could give it an advantage over domestic companies
Cook disagreed with that characterization, saying that the company pays taxes on income it makes in a variety of countries.
“I don’t see it as being unfair,” Cook said, adding that he would not preside over a company that engaged in unfair practices.
Questioned by Levin, Phillip Bullock, the head of the company’s tax operations, confirmed that Apple Operations International has not paid U.S. corporate taxes in five years. Apple Sales International and Apple Operations Europe have paid the Irish earned income tax rate in full, he said. Bullock reiterated that Apple Inc. has paid U.S. taxes.
In his opening remarks, Cook also recommended tax reforms that are revenue neutral, such as eliminating all corporate tax expenditures, lowering tax rates and setting what he called a reasonable tax on foreign earnings.
“We make this recommendation with our eyes wide open, fully recognizing that this would likely result in an increase in Apple’s U.S. taxes,” Cook said, adding that he believes the changes would help the Unites States compete on a global level.
Apple CEO Tim Cook defends tax practices at Hill hearing
Apple chief executive Tim Cook went to Capitol Hill on Tuesday to defend the tech giant against accusations that it is using gimmicks to pay less than its fair share of taxes.
In prepared testimony before the Senate’s Permanent Subcommittee on Investigations, which Apple released Monday night, Cook strongly denied that the company uses any improper methods to reduce its taxes, saying that the subsidiaries that Apple has set up in Ireland help the U.S. economy by improving its position in Asia and Europe.
Cook was joined at the hearing by Apple chief financial officer Peter Oppenheimer and Phillip Bullock, head of tax operations, as the three responded to senators complaints that the company is using a “complex web” of offshore entities to exploit loopholes in tax law and shelter overseas profits from U.S. taxes.
Though Apple was the subject of Tuesday’s hearing, several companies use similar offshore tax strategies, The Washington Post reported, and it’s particularly easy for technology companies to shift assets, including intellectual property, to other territories with lower taxes. In Apple’s case, the firm set up two subsidiaries in Ireland to hold foreign earnings, The Post reported, despite the fact those Apple units have no employees in the country.
Ahead of Cook’s testimony, lawmakers were divided on Apple’s actions. Committee chairman Sen. Carl Levin (D-Mich.) accused the company of shifting $36 billion in taxable sales income out of the United States in 2012. Sen. John McCain (R-Ariz.) called Apple one of the “biggest tax avoiders” in the country.
But Sen. Rand Paul (R-Ky.) opened the hearing with a fiery speech, saying that the committee owes Apple an apology for “dragging” Cook and other Apple executives to Washington when they haven’t done anything illegal. Rand proposed lowering the corporate tax rate to 5 percent to encourage companies to bring operations back to the United States.
More on Apple’s taxes:
The Circuit: Yahoo buys Tumblr
Yahoo buys Tumblr: Yahoo announced Monday that it has paid $1.1 billion for the blogging site, confirming reports that first broke on All Things Digital. The blogging platform, which hosts approximately 100 million blogs, will be maintained as a separate company, Yahoo said, and Tumblr founder Dave Karp will remain as the head of the blogging platform.
The site skews toward a younger audience — an asset that’s clearly very attractive Yahoo chief executive Marissa Mayer.
Mayer acknowledged that the companies are different, but said that she thinks they fit well together.
“On many levels, Tumblr and Yahoo! couldn’t be more different, but, at the same time, they couldn’t be more complementary,” Mayer said in a release. “Both companies are homes for brands — established and emerging. And, fundamentally, Tumblr and Yahoo! are both all about users, design, and finding surprise and inspiration amidst the everyday.”
Corporate taxes: Apple chief executive Tim Cook is coming to the Hill for a hearing on corporate taxes Tuesday, and will be armed with his own proposal about how the U.S. can simplify its tax code.
Meanwhile, Google and Amazon are facing criticism from British prime minister David Cameron for their own tax affairs, as the Guardian reported. and a committee in the House of Commons criticized Google for being “unethical” about the way it handles its taxes. In response, Google chairman Eric Schmidt wrote an op-ed in the British paper, the Observer over the weekend, noting that Google pays most of its taxes in the U.S. because that’s where it generates the most profits. In a three-point response, he said that companies should pay tax on profit, not revenue; that politicians set the tax rules, and finally that he agrees there needs to be debate about corporate taxes..
“[Given] the intensity of the debate, not just in the UK but also in America and elsewhere, international tax law could almost certainly benefit from reform.” Schmidt said.
Acting FCC chair sends note to staff: Acting Federal Communications Chairman Mignon Clyburn sent a note to the agency’s staff Monday in order to get everyone “on the same page.” Clyburn is in charge of the FCC while nominee Tom Wheeler waits for Senate confirmation.
In her note, Clyburn said that she will focus on giving the agency ”forward momentum” so that it will not miss a beat throughout the transition.
“[If] asked about my goals as I take this new position, I would answer without hesitation – its hallmarks will be continuity and progress,” Clyburn said.
YouTube turns eight: Google’s YouTube video site celebrated its eighth birthday Sunday, saying that over 100 hours of video are uploaded to its site per minute.
The company also said that more than 1 billion people come to YouTube each month — “almost one out of every two people on the Internet.”
YouTube has recently taken steps to bump up its revenue, allowing users to pay for subscriptions to certain channels — a move that makes Google a more serious player in the growing online video space.