Read this: Facebook's Steve Hatch on paying tax and political ads
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BBC sounds music Radio podcasts from BBC Radio 4 for you subscribers to the media show is Facebook's boss for northern Europe you know that his company has been under pressure from governments all over the world about how it deals with foreign interference and disinformation Twitter causing this General Election that it was banning all political advertising so too did TiK ToK but Facebook course says it won't that was when I took my interview with him.
We started with that other big hot potato for Facebook tax is legal tax avoidance morally justified.
The question of tax and taxation technology companies and global companies has come up free.
Can we come up already in this election and what is probably less known is the total tax at Facebook plays globally so a global level for the last five years our effective tax rate has been 26% which is a comparable number of other large organisations the question whether this is less around the level of taxation in the distribution of taxation now right now the vast majority of that tax is paid within the US that's the way that the rules are set up personally.
I'm good weekend and across place.
What would we like to see that these read more geographically around the company to the countries that you're putting the answer to that is yes, see you personally like Facebook pay more tax in the UK we would want to see a fairer distribution of y distribution of the tax that we pay across a geography that we operate in.
Work by the OECD they were bringing government together and looking at this and see what the system should be how the system might evolve in order for that to happen last time.
It will minimise in the UK you minimise profit margin here in order to reduce the amount of taxes paid perfectly legal so in America the profit margin for Facebook is about 45% of every dollar you make America 56 billion dollars of global revenue 2018 UK 45 cents in the UK for every pound you make your pre-tax profit margin is just 8.5% that artificially diminished isn't it in order to avoid paying more tax based on the rules in which we operate and every company.
That's like ours is a taxation set at the moment.
So where are the things been built and made and generate it and where are they being using the that's why the taxation level that you see in the UK is going to lower than you might.
Taxation levels in the US where the majority of those products and therefore the value which HMRC and everybody is like this and agreed is created the would say though is the revenue cos often is a question around all revenues saying how is revenue being created is it the right kind of Revenue and revenue represents within the UK is the Investment by hundreds thousands of businesses up and down the country investing in Facebook in order to grow their business most of those by far the majority of small businesses and what we've seen is for every small business using Facebook to export so they sell British products outside of the UK into other countries more than half of those have been able to employ new people so I think the at the additive effect that enabling small businesses to grow and having them to to employ more people and strengthening Communities and our economy for that is a positive one just because you shot me in the implication what you're saying.
Halo party say we need a tech tax on tech Giants like Facebook in order to fund various proposals.
They have the same bring it on if the rules were changed so you have to pay more tax in the UK you be willing to do so absolutely incumbent on her than any any company that operates within any country to ensure that there are boring by the taxation laws of that country wide is that people out there my Facebook is a company that makes billions globally and it's legally avoid huge amount of tax.
Why did it fulfill the Mission of being a social network? I just pay more to set the rules around taxation and companies to follow those laws.
Are we followed them to the to the letter of the law what we've done is invested.
Heavily here and back now.
This is the largest engineering centre outside of our headquarters in MPK filled with brilliant men and women creating great products for everyone and that's because of the special position that the UK has a centre of.
Shape of Engineering excellence and technical capability that's why it's become a great home for us and that's why I'm investing now going to continue to invest about political ads Twitter is banned political ads that you have why?
In this country We've made the decision that advertising is part of the political process and is part of the election process whether that's on posters and facts often someone iconic part of a campaign of in the the outdoor.
That's run historical.
That's in pamphlets.
That's in emails as a country we decided that that's ok part of the process and we're ok with that if that's the case of a kind of two reasons why you wouldn't ban the first off actually is a defining what is political advertising is hard something you really have to work now.
It's a political party or a candidate.
That's a bit easier but adds that are inherently political that that challenge social norms that look to create change through government that's much wider are much harder to define and I just got something hard doesn't mean to say that you shouldn't go and do it particular company as well resources as Facebook is but
An advertising to ban political advertising actually has an inherent bias in it that it helps entrenched the positions of the incumbents at the cost of those that are less represented have a quieter voice today and are less well resource.
Ok, if you're allowed while clearly label contains factual errors.
Will you remove it so the decision that we've made us is that we don't regulate political speech and political advertising there isn't an equivalency in the UK for Political advertising as we have the commercial advertising as well self regulated by the FSA rules that are established for what can and cannot be said to be set by a private company and in our beliefs to ring of a
False identity and disinformation in a tight election this same people seeing that because Facebook is this why you take that stuff down? We thought long and hard to really try and get this right and be consistent with the approach that we've chosen to take in the UK that elected officials and parliament and the Electoral Commission of chosen the way that the we are praying in the UK now is a politician or political party share something that's not from another political organisation that previously proven to be misleading or false we put it right to the bottom of the new speak so that people don't see it.
We put an eye on it saying this is proven to be misleading or patching incorrect and we have a link to the fact that describes why that's proven to be the case of the reason for being that is wishing that rather than the wake of censorship by a private company that I think people be quite uncomfortable with may be particularly Facebook taking the rollers arbitro political truth.
Apparently these decisions have been made by California Company is absolutely absurd that whether or not people see millions of true or false claims online.
It's something you as a private company decide on and a duplicate on rather regulators and lawmakers and we were we have can we have been very clear about this that we think there is a for many years now that we can I was a clear role, Reform and regulation in the political advertising space the model that we set for transparency of an ad library is the right way forward, so that's a place right now a website that We Created last year what every single political issue based, ad that runs on Facebook can be seen by anyone and everyone shows all of the Alice in one place.
It shows the broadreach about advertising as well as being in the library.
We set very strict rules that mean you can only advertise political Up Issue base as if you prefer.
A form of national identity that you hear in this country that your labelling who's who's who's paid for it what we have created it.
Is is I think the most transparent of any medium well, that's online or offline there isn't a place where you can see all the posters all the leaflet all the emails were there is a place where you can see all the Facebook app and that enables that the robust free press that we have in this country and interested individuals to whole people account all the time of your platform.
Is it if you want to influence politics can give money to a group and that group without declaring it gets.
It's money from can advertise address of your Facebook include by charging people you don't know do whether or not the Saudis are the Russians or some Milan is usual platform front organisations which it is found in without actually declaring that we do everything that's directly within our power.
I think it's it's it's certainly adding a question for future regulation but how how we as a society how weird colour of part of that Society wants to be added to the Democratic process giving a root and an option to people who want to influence democracy as a way of getting to voters by allowing them to fun people who through front organisations on your phone can reach millions of people with post without their way, they actually get their money from which is why we think the best route forward right now is that transparency is being able to show all about messaging that's so people can scrutinise it and can hold them to account for what they're saying and actually looking at the tool.
That is a report.
I read in a national newspaper last week which describes current campaigning is as dull and I don't think that's the last time.
So you might not be with people that are praying that message out, but it's certainly suggests that transparent approach that show.
Who's playing from a paper from a page perspective? What that messages who's being rich and how they are being targeted is enabling people that operate in the best way most activity.
They were saying is coming from the mainstream parties using very broad and approaches to broadcast in a way using Facebook as a broadcast way of accessing communications by mobile phone so far in this election campaign has there been any foreign influence on Facebook today? We have not seen any of the what I can say is this is an area where we always have to be constantly constantly vigilant with a long way to go in a selection.
We want to make sure that we are going there.
We are additive to be additive to that democratic process and that means safety and integrity.
We've invested tens of millions of pounds an hour tens of thousands of people.
on the cycling integrity across our platform regulation in this country is being so a business lower keeping pace with digital Technology
I don't think that's really a question for us to answer.
We've certainly surprised that we're going into selection without any new electoral laws, basically.
We had all the Paranoid all the talk about 2016 about brexit and amazing we going to the selection with our electoral legal defences relatively weak, that is why I think there is clearly a need for new regulation as we have waited for that regulation to come we think it's the right thing for also taken the proactive steps that we had and I'm glad we took them as early as we did the things that we introduce not this year not on the highest of an election, but back in the back in last year and that had library in particular is now up to 125 book and scrutinize and analyse question that you taking the stuff seriously and you've been proactive but there are a lot of people who think they're all of this flat to let you off to look at Facebook and say you do basically legally.
Syntax you do give liars and millions and millions if they want it all be at the bottom of your news feed and you can't meet absolutely certain you can't tell me today.
That's fine actors aren't interfering in this election front organisations and people say you put those things together what you actually having Facebook is the world's most antisocial network and it people's expectations about our that we live up to the Expectations they have of making sure that things are operating with safety and integrity that we put our money where our mouth is and we made major Investments as we have billions of pounds that mean that things like for example in Terrorist content.
We take down 99% invested in systems.
We've got tens of thousands of people that are in place to make sure that it's got analyse can I contact that's there? It's being too kind of taken away at speed and it's improving nothing expectation people that we continue to improve but I would stress.
People's experience of Facebook most of the time is a really really positive one they see that things from their friends and families if your purse musical.ly and somewhere that's if you're a small biz power in your growth.
Its enabling you to create new jobs so far from being what you described earlier.
I think Facebook is a very positive Force in this is a force recon price.
I think it's a fool third connection.
I think they have been things that we have made massive steps and massive progress on improving am I going to continue to do so but isn't the case that only 10 years old Facebook as a company that has grown phenomenally fast is become extraordinarily powerful and it's in the nature of technology that it always outpaces regulation and the fact is you going so fast that this decision about the Facebook in a democracy is being left to Facebook and a democratic lawmakers haven't kept pace with what you're doing or we certainly haven't waited in a we've certainly make sure that everything that's directly within our power.
Which is what people expected version what can you do Facebook to make sure that democracy is protected? What can you do Facebook to make sure that what we see and hear is is as transparent as possible and what can you do Facebook to make sure what's being done is been done through a process of safety and integrity and expectations having and I think we're living up to that and they continue to invest in the right ways refine our systems and make it better I mean that's what we can do as a private company and we welcome from a changes that the enable all of us to feel better about that know whether that's regulatory changes that come down the line or indeed the important critical role with a free press plays in our country at holding people to account and increasing the level of transparency that we have and that's one thing that we've been able to contribute significantly to in this election so if that's the case and Jeremy Corbyn elected Prime Minister a few weeks from now.
People in this so-called Tic Tacs you would pay it you wouldn't lobby against it and you wouldn't shift your operations elsewhere the cbis today science or all three were all three political leaders spoke and what really struck me words that mean two things and one which is each leader put technology at the heart of the UK and we believe we've got a great additive role.
Do that are proud of what we've done the Investments that we may continue to make in the UK and business growth at the heart of that now will work with whatever government has a privilege to be elected by the people of this country against it and you won't move your operations elsewhere because if that's the case that's a pretty sure.
It will work with every moment that comes in.
We always want to be in at 7 to the UK we've been there for more than 10-years and we certainly envisage after uterine the UK be more than 10-years and Steve thank you very much indeed.
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