Posts tagged ‘tax’


The fall and rise and fall of Kim Dotcom, and why, according to the US, watching YouTube makes us all criminals

26.12.2015

In response to a friend’s Facebook post applauding the possibility that Kim Dotcom would get extradited, two days ago. It’s unedited, other than the inclusion of a link and a note, and I apologize for the grammatical errors.

Surely this remains the only case in the history of humankind where copyright is a multi-jurisdictional criminal matter? And if getting rich off copyrighted material is a crime, then YouTube has a longer history of letting this happen and rewarding users for it. The principal difference that I can see is that YouTube (through its parent Google) dodges paying New Zealand tax,* which seems to be a position our government is comfortable with. I’m not saying I like Dotcom—who I think is only out for himself and yes, he comes across as a dick—but fair’s fair. Nor am I saying I support copyright infringement, but under New Zealand law that’s a civil matter that should be fought by the infringed, not by governments. (In the US there is a criminal provision but the guy hasn’t ever been there nor was his company based there.)
   When I read the prosecution’s case it falls down at some basic hurdles. They say the defendants infringed. But they don’t say what they infringed. You’ve got to have this, especially if you’re going to prosecute this as a crime. The guy has a right to know exactly what’s at issue. And Megaupload stored stuff, they weren’t the infringers. Even if they knew about it, there’s no crime knowing about criminal copyright infringement. If the US position holds true, then when we go to YouTube to view a full-length movie or TV programme that someone has uploaded in order to make money for themselves, it would actually make us criminals. I’m not comfortable with this.
   I see an appalling double standard when it comes to how this bloke is dealt with, e.g. he is dissed for spending money funding a political party but Colin Craig gets a pass for doing the same thing at exactly the same time. He is dissed for showing us how our government monitors us by bringing in Glenn Greenwald yet we all applaud Greenwald when he does it overseas. I find it interesting how he went from Public Enemy No. 1 when he was first arrested, to admired underdog for quite a lengthy period when Kiwis realized copyright law was on his side, and now he’s back to Public Enemy No. 1 again after exposing the flaws in our security services and trying to do us a favour with the flop that was ‘the moment of truth’. Guess we really hate it when a foreign-born New Zealand resident tells us how things should be, but we love telling foreigners about gun laws, imperialism and inequality.
   If the guy is to go to prison, then let it be for an actual crime.

* PS.: Yes, it’s technically legal to run things through a Bermuda tax haven and pay yourselves back for stuff.

Tags: , , , , , , , , , , , , , ,
Posted in internet, New Zealand, politics, technology, USA | No Comments »


Ikea tries to shut down its biggest fan site, showing us how the company thinks within

17.06.2014

In an age of social media, you would think it was the most stupid thing to try to shut down the biggest online community you have.
   Ikea has done just that, on IP grounds, against Ikea Hackers, by getting their legal department to send Jules Yap, its founder, a cease-and-desist letter after her site had been going for eight years. In that time she had sent customers to Ikea, after they were inspired by the new ideas her community had on doing new things with Ikea furniture.
   There are arguments that Ikea could have been liable for any injuries sustained from the “hacks”, but that’s daft. Are we really that litigious as a society, prepared to blame someone for something we ourselves freely chose to do? Ikea has instructions on how to build their furniture, and it’s your own choice if you are prepared to go against them.
   And eight years is an awfully long time to bring a case against someone for trade mark usage, rendering this claim particularly weak.
   There are other Ikea-hacking websites and Facebook pages as well—so it’s even dumber that Ikea would go after one with such a huge community, a website that has an Alexa ranking currently in the 20,000s (in lay terms: it has a huge audience, potentially bigger than that of Ikea’s corporate site itself in Jules’s country, Malaysia).
   Jules says that she has to take down the ads as part of her settlement for being able to retain the site—ads that simply paid for her hosting, which she might not be able to afford to do any more. (Some fans have offered to host for free or provide new domain names.)
   The Ikea Hackers logo doesn’t look remotely like the Ikea one, which would readily imply there was no endorsement by the Swedish company.
   Therefore, Ikea’s statement, on its Facebook, holds very little water.

Vi Àr glada för det engagemang som finns för IKEA och att det finns communities runt om i vÀrlden som Àlskar vÄra produkter lika mycket som vi gör.
   Vi kĂ€nner ett stort ansvar mot vĂ„ra kunder och att de alltid kan lita pĂ„ IKEA. Det Ă€r viktigt för oss att vĂ€rna om hur IKEA namnet och varumĂ€rket anvĂ€nds för att kunna behĂ„lla trovĂ€rdigheten i varumĂ€rket. Vi vill inte skapa förvirring för vĂ„ra kunder om nĂ€r IKEA stĂ„r bakom och nĂ€r vi inte gör det. NĂ€r andra företag anvĂ€nder IKEA namnet i kommersiellt syfte, skapar det förvirring och rĂ€ttigheter gĂ„r förlorade.
   DĂ€rför har Inter IKEA Systems, som Ă€ger rĂ€ttigheterna till IKEA varumĂ€rket, kommit överens med IKEA Hackers om att siten frĂ„n slutet av juni 2014 fortsĂ€tter som en fan-baserad blog utan kommersiella inslag.

Essentially, it uses the standard arguments of confusion, safeguarding its trade mark, and—the Google translation follows—‘When other companies use the IKEA name for commercial purposes, it creates confusion and rights are lost.’
   This can be fought, but Jules elected not to, and her lawyer advised against it. It’s a pity, because I don’t think she received the best advice.
   On Ikea’s Swedish Facebook page, some are on the attack. I wrote:

I would hardly call her activity ‘commercial’ in that the ads merely paid for her web hosting. I doubt very much Jules profited. But I will tell you who did: Ikea. She introduced customers to you.
   While your actions are not unprecedented, it seems to fly in the face of how one builds the social aspects of a modern brand.
   The negative PR you have received from this far outweighs the brand equity she had helped you build. It was a short-sighted decision on the part of your legal department and has sullied the Ikea brand in my mind.

   This won’t blow over. It’s not like politics where people are disinterested enough for all but the most impassioned to retain memory of a misdeed. (For example, does Oravida still mean anything to anyone out there?) Ikea is a strong brand, and mud sticks to them. Some years ago, I met a woman who still had a NestlĂ© boycott in place after the company’s milk powder incidents of the 1960s. And all of a sudden, Ikea’s alleged tax fraud (see here for the SVT article, in Swedish) or the airbrushing of women out of its Saudi Arabian catalogue come to mind. They’re things most people forget, because they go against the generally positive image of an organization or Ingvar Kamprad himself, until there’s some misstep from within that shows that things are rotten in Denmark—or in Sweden, as the case is here. Or is it the Netherlands, where its company registration is?
   Brands are, in particular, fragile. I have maintained for over a decade that brand management is increasingly in the hands of the audience, not the company behind it—something underpinning my most recent academic paper for the Journal of Digital & Social Media Marketing. We all know that there must be as much consistency between the views of the brand held by the organization and those held by the public. The greater the chasm, the weaker the brand equity. Here, Ikea is confirming the worst of its behaviour done in the name of its brand, all for the sake of some euros (I won’t say kronor here)—meaning the consistent messages are not in clever Swedish design, but between what it’s doing in this case and what it allegedly does in Liechtenstein.
   And since the foundation that controls Ikea is technically not for profit, then it’s a bit rich for this company—accused of tax avoidance by calling itself a charity—to be calling Jules’s activities ‘commercial’. It is hypocritical, especially when you bear this in mind:

In 2004, the last year that the INGKA Holding group filed accounts, the company reported profits of €1.4 billion on sales of €12.8 billion, a margin of nearly 11 percent. Because INGKA Holding is owned by the nonprofit INGKA Foundation, none of this profit is taxed. The foundation’s nonprofit status also means that the Kamprad family cannot reap these profits directly, but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems.

   The tax haven secret trust the companies use is legal, says Ikea, which is why it pays 3·5 per cent tax. I have little doubt that the complex structure takes advantage of laws without breaking them, and Kamprad was famous for departing Sweden for Switzerland because of his home country’s high taxes. The cease-and-desist letter probably is legal, too. And they show you what mentality must exist within the organization: forget the Swedishness and the charitable aspects, it’s all about the euros.

Tags: , , , , , , , , , , , , , , , , , , , , , , ,
Posted in branding, business, culture, internet, marketing, Sweden | No Comments »