Taming the tech titans

FACeBOOK’S one-time mantra to move fast and break things has been unofficially adopted by every Silicon Valley start-up to trail in its wake.

Centuries-old corporations have raced to infuse the same spirit of experimentation into their business activities as the tech giants, with mixed results.

What sets apart these companies that now drive our daily lives – Google, Amazon, Facebook and Apple – is their less-than-genteel approach to rules and regulation.

They have proved to be sublime stock market investments but headache-inducing for governments. Testing the boundaries of what is acceptable explains the frequent clashes with authority, such as Uber’s loss of its licence in london.

Other pressure points include how tech companies collect and use personal data, and the knotty issue of tax.

There are signs of maturity as this industry spreads its wings, but they usually bubble up when the force of popular opinion is against them.

Stung by the criticism over fake news, Facebook founder Mark Zuckerberg is helping US investigators with their inquiries into Russia-linked political advertising that may have swung the US presidential election. Once, he might have just shrugged off such requests. Apple and Google are being less accommodating in their battles over billion-euro fines with europe.

Where least progress has been made is in tax. Capturing an appropriate level is like nailing jelly to the wall.

efforts by the Organisation for economic Co-operation and Development to clamp down on profits moving from country to country are going slowly.

No wonder the european Commission, brandishing data that shows digital firms pay less than half the tax of traditional bricks-and-mortar businesses, is sketching out tougher rules if there is no international accord. A levy on video-streaming services or goods traded online looks ambitious. None of it sounds encouraging to consumers used to low prices and convenience.

Sitting in Philip hammond’s chair casts light on why an overhaul is necessary.

The so-called Google tax, introduced by former Chancellor George Osborne to crack down on firms that divert revenues abroad to lessen their contribution to the exchequer, is helping at the margin. In the last financial year it captured £281m and drove many companies to restructure operations so they paid more corporation tax.

But the overall rise of the tech giants means tax from traditional sources is harder to come by.

It explains hammond’s botched attempt before the last election to increase the tax paid by self-employed workers who might once have been on the payroll before Uber and others reimagined the workforce.

The Chancellor will be forced to explore other avenues. Too few consumers realise the price of cheap online goods and services is a lower tax take. This has to be made up elsewhere, unless the tech giants can be tamed.

HACed off

SAGA is fond of reminding investors of its growing market. The 22.8m over-50s in the UK in 2013 are forecast to swell to 29.1m by 2033. Given this expansion it is curious that the mature brand is focused on selling more services to fewer people.

A year ago Saga talked about the potential for the 11.3m contactable people on its database and its 2.7m active customers.

Now lance Batchelor, the chief executive, has narrowed his gaze. The ex-marketer has christened as high Affinity Customers (hACs) the band of 477,000 he believes are more likely to buy anything with the Saga name on it. Those qualifying should stand by for a blizzard of junk mail.

Holiday fever

The weak pound has helped, but Britain’s booming tourism industry is no flash in the pan. Unrivalled infrastructure – the nation’s castles and gardens – were invested in centuries ago and remain a top draw.

In the search for industries that can withstand automation and low-cost competition, it is worth remembering that Buckingham Palace cannot be sent to Poland, like a factory assembly line. That’s why tourism deserves its place in the Government’s upcoming industrial strategy.