Google’s China Issue an Inside Job?
We have seen and heard so much in the past week about the cyber attacks in mid-December on Google that originated from China that now the story has shifted. Of course assessing the damage and closing the holes that exist at Google are a main priority not to mention that Washington is pretty interested in putting more detail on China’s digital espionage exploits. In the midst of this though is a rumor that is being reported by Reuters that this may have all been an inside job done by Google staff in the China office.
Google is investigating whether one or more employees may have helped facilitate a cyber-attack that the U.S. search giant said it was a victim of in mid-December, two sources told Reuters on Monday.
Google, the world’s most popular search engine, said last week it may pull out of the world’s biggest Internet market by users after reporting it had been hit by a “sophisticated” cyber-attack on its network that resulted in theft of its intellectual property.
The sources, who are familiar with the situation, told Reuters that the attack, which targeted people who have access to specific parts of Google networks, may have been facilitated by people working in Google China’s office.
Google is calling any talk like this speculation and through a spokesperson refused to comment. The rumors include the denial of employees to internal network operations last week as a result of these discoveries. While it all appears to be speculation at this point it looks like this will get more interesting edpecially in light of Washington’s interest.
To review, this is what happened in a very 30,000 ft flyover kind of way.
Security analysts told Reuters the malicious software (malware) used in the Google attack was a modification of a Trojan called Hydraq. A Trojan is malware that, once inside a computer, allows someone unauthorized access. The sophistication in the attack was in knowing whom to attack, not the malware itself, the analysts said.
Espionage is nothing new so the ideas that these attacks took place shouldn’t come as any surprise to anyone. What seems to have most people concerned is that it happened to Google which has a reputation (whether it is perceived or real is not the point) that is does very little wrong. That image helps them stay away from being talked about regarding the amount of data they have on just about everyone and the real creepy stuff they could do with it.
Now, however, that reputation may have taken a shot because no matter how it happened, inside job or not, the search and Internet giant has been exposed as being as vulnerable as the next guy.
While Google wants to do no evil it better be very prepared for those who would love to do evil to them.
Turkey Suing Google for $47M in Back Taxes
Dear World:
Google is advertising in your countries.
Duh.
Turkey has recently determined that Google owes them $47M US (71M Turkish lira) in back taxes on advertising sold in Turkey. The government maintains that because Google sells advertising in Turkey and maintains an office and registered subsidiary in the country.
Google, on the other hand, points out that “it runs its ad network operations from Ireland and thus is not obliged to pay taxes in Turkey merely because it owns a subsidiary there.” The suit recognizes that bills and checks (or should I say cheques?) for such advertising are addressed from/to the company’s European headquarters in Dublin.
Says TechCrunch:
In a statement, Google said it is acting in accordance with the tax laws of every country in which it operates, including Turkish laws, and that its negotiations with the government on this issue are ongoing. . . .
We’ve also been in touch with a Turkish lawyer, who tells us the government is making a valid claim, pointing out that Google has set up a full-fledged company called Google Reklamcılık ve Pazarlama Ltd. Şti. (which means Google Advertising and Marketing Ltd.) in Turkey rather than what he refers to as a ‘liaison’ branch. Had it done the latter, says the lawyer, the company would have had to pay very little or no taxes at all.
Personally, I’m a little skeptical of the Turkish government’s claim, mostly because if Google has really been taxable all this time (and since Google is the #1 online and search ad company in Turkey), they (the government or Google) would have figured this out a lot sooner. Did the Turkish government just figure out they could tax Google? Or is this, as TechCrunch points out, just a bargaining tactic tor force Google’s negotiations to go faster?
(Note: the Turkish government says they’ve determined this after a year of investigating. Again, a year? It doesn’t take a year to figure out that someone should be paying you taxes, especially not if a Turkish lawyer can figure it out in one email. If they really wanted the taxes, they could have indicated that Google should be paying taxes at the beginning of the investigation instead of stalling a year while Google racked up more income that they could penalize. I think being dishonest like that should be reason enough to lose the suit.)
Here’s what I think: if you really want to tax Google, countries of the world, then do it—but pass a new law that they can’t get out of. Don’t try to cobble together a legal argument, backform your present laws that may or may not fit the situation, or stall an entire year to try to squeeze more out of them. Because, after all, taxing Internet companies for selling stuff in your jurisdiction has worked really well in New York, North Carolina, etc.
What do you think? Will Turkey get their cash, will the case get thrown out, or are they really just hoping for Google to settle for any amount? Will this make Google reluctant to operate in that country in the future?
