Google CEO Is Open to Paying More Tax, But Question Is Where

(Bloomberg) -- Google is willing to pay more tax globally, Sundar Pichai, the chief executive officer of the largest business unit of Alphabet Inc., said Wednesday at the World Economic Forum in Davos, Switzerland.

"We are happy to pay more tax, whatever the world agrees to," Pichai said, noting that the company’s current blended global tax rate is 20 percent. But he said the question was where Google should pay.

Critics have accused large U.S. technology companies like Google of paying too little tax outside the U.S., despite deriving a large portion of their revenue from these other countries.

Pichai said that as Google hired more engineers globally -- for instance, in France, where Google said this week that it would add more engineering and research staff -- it would equalize the distribution of its tax payments across different countries.

Fines, Extremism

In a wide-ranging question-and-answer session with WEF founder and executive chairman Klaus Schwab, Pichai touched on a number of other hot button subjects, from anti-trust complaints about Google to extremist content on its YouTube service.

In responding to questions about the European Commission’s decision last year to fine Google 2.4 billion euros ($3 billion) for abusing its dominant market position in search, Pichai said the company believed its service had benefited consumers.

"Even when you put the user first there can be winners and losers," he said. "But we are confident the product we have benefits the consumers in Europe and that is what we have tried to emphasize."

Asked about whether social media companies, including Google’s YouTube, should decide what content constitutes extremism or hate speech, Pichai said he did not think internet giants should be turned into the de facto arbiters.

Germany has begun enforcing Europe’s toughest law aimed at reining in hate speech and fake news on social media, threatening to fine tech firms as much as 50 million euros ($61 million) if they refuse to delete illegal posts.

Pichai’s views echo the thought of Elliot Schrage, Facebook Inc.’s vice president of public policy. Speaking at the DLD conference in Munich on Sunday, Schrage said Germany’s new law "places the responsibility for us to be judge and jury and enforcer, determining what is legally required or not, on the private sector, on us as a platform," he said. "And I think that’s a bad idea."

Pichai said Google had tried to avoid this dilemma by relying on non-governmental groups that combat terrorism and extremism to guide its decision-making. But he said it was also helpful when governments had clearer definitions of what is allowed.

Gender Diversity

Klaus pressed Pichai about James Damore, a Google engineer fired after circulating a manifesto questioning women’s engineering abilities, and accusing Google of having too politically-correct a corporate culture. Damore is now suing Google for discrimination.

"The participation of women in tech is very, very low, but technology products affect everyone," Pichai said, defending Google’s emphasis on gender diversity. "The only way to fix that is to involve more women in the development of technology."

Pichai said he was glad that Damore’s manifesto had prompted an open discussion of the issue but that he wanted "an inclusive culture for all Googlers."

AI, Weapons

The CEO repeated his assertion, made earlier this week at a pre-Davos forum, that the advent of artificial intelligence would be more important to humanity than either the mastery of fire or electricity.

He said that while there were legitimate concerns about AI, it was important not to lose sight of its potential benefits.

"The risks are substantial, but the way you solve it is by looking ahead, thinking about it, thinking about AI safety from day one, and to be transparent and open about how we pursue it," he said.

Countries should come together and agree not to use AI for military purposes, Pichai said.

He also said that the militarization of AI was unlikely to give a long-lasting advantage to any nation. "AI is a great equalizer," he said. "It’s tough to weaponize because everyone will have the same ability to get you back."

To contact the reporter on this story: Jeremy Kahn in London at jkahn21@bloomberg.net.

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate Lanxon

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