Vodafone May Invoke Arbitration For Fresh Tax Demands By India

The Vodafone taxation controversy in India has again resurfaced. Vodafone has been served with tax due notice by Indian tax authorities. Vodafone reacted in the much anticipated manner and denied any tax due on its part. Vodafone is also feeling confident due to the ruling of Supreme Court of India in its favour.

Meanwhile, the Parliament of India amended the tax law of India with retrospective effect. At Perry4Law, we believe that legally there are few options still available to both Indian government and Vodafone. It is not the situation that either party to the dispute has absolute case.

While the Indian government has the backing of a retrospective law yet Vodafone can invoke arbitration proceedings before international tribunals under the concerned Bilateral Investment Protection Agreement.

In fact, Vodafone has already served an arbitration notice to the Indian government regarding the proposed tax. However, Indian government declared such notice to be premature and ignored it. Now that Indian government has raised fresh tax liability claims, Vodafone may serve a fresh notice to initiate the international arbitration proceedings.

Vodafone has already acknowledged the receipt of fresh demand notice by Indian tax authorities. However, Vodafone told Indian government that it is not liable to any tax on the deal in question. The reminder does not include a deadline for payment and it pertains to the alleged capital gains tax arising from the sale of assets by Hutchison Whampoa to Vodafone in 2007.

Now that a fresh tax demand has been raised, it is for the Vodafone to challenge the same either in Indian courts or at an international arbitration forum. It seems Vodafone would prefer the arbitration mode as against the litigation in India but only time would tell what would be Vodafone’s choice.

Vodafone Again Served With Tax Due Notice By Indian Tax Authorities

Vodafone taxation controversy in India is not willing to die. Vodafone has claimed that on Saturday it has received a reminder notice from Indian tax authorities on disputed tax dues. The dues pertain to the acquisitions made by Vodafone in the year 2007 of Indian mobile assets. However, no deadline has been prescribed for the payment by the tax authorities of India.

Vodafone has given a standard reply by stating that according to Vodafone’s beliefs no tax is due to be paid by it. Vodafone is of the firm opinion that no tax is payable on the above transaction made in the year 2007. Vodafone’s major relief point is the judgement given by the Supreme Court of India in its favour.

The only option left for India was to formulate and enact a validation law that can cure the defects pointed by the Supreme Court while adjudicating the Vodafone’s case. The government exactly did the same thing by amending 50-year-old tax laws enabling it to make retroactive tax claims on long-concluded corporate deals.

The constitutionality of such retrospective validation law is still to be analysed. However, this retrospective amendment has once again brought to life the dead Vodafone taxation controversy.  

Supreme Court Asked Indian Government To Monitor And Regulate All Clinical Trials Of Experimental Drugs In India

Pharmaceuticals are both boon and bane depending upon its use and misuse. For instance, clinical trials of experimental drugs in India is going more on the side of a bane that is emerging as a potential threat and havoc to human lives in India.

So much so that the Supreme Court of India has directed Health Ministry of India to monitor and regulate all clinical trials of experimental drugs in the country until further notice. The Court has also showed its unhappiness with the growing use of clinical trials of experimental drugs in India without much monitoring and said that this scenario has caused “havoc”.

Supreme Court did not stop here and it revoked the power of the Central Drugs Standard Control Organisation (CDSCO) under the Drugs Controller General of India (DCGI) in this regard as well. CDSCO has been the apex agency for monitoring clinical trials in India so far.

The Court has also directed the health secretary to file an admissible affidavit within four weeks after it refused to accept one filed by deputy drugs controller. The Court refused to admit such affidavit because in October the Court made its intentions clear that it may bar clinical trials in India unless the Health Ministry provides information within a month regarding deaths during such programmes. The Court also sought explanation regarding compensation and general practices when new drugs are tested on Indians.

Surprisingly, no laws were in place between 2005 and 2012 for new chemical entities and yet the government was approving trials very casually. If this is not enough, illegal and unregulated online sales of prescribed medicines in India are happening right under the nose of Indian Government. Online pharmacies in India are violating Indian laws and Indian Government is least interested in curbing this practice.

We have weak health related laws in India, including those pertaining to online sales of prescribed medicines in India. We have no dedicated data protection laws in India and privacy laws in India. Even data exclusivity laws in India need to be formulated. A regulatory framework for data exclusivity In India can be really helpful in this regard.

Google Settles Patents Licensing And Antitrust Claims With FTC

In a much anticipated move, Google settled the patent abuse and antitrust complaints with the federal Trade Commission (FTS) of United States (US). However, the antitrust probe initiated by the European Union (EU) is still pending a resolution.

Various projections have revealed that Google, Facebook, Samsung etc may face more scrutiny from EU and US Regulators. As per Global Taxation And Anti Competition Regulatory Issues In 2012 And Projections Report For 2013 By Perry4Law,  the year 2013 would see an enhanced regulatory scrutiny by various regulatory bodies and authorities throughout the world. Countries are also entering into bilateral treaties to make the respective companies liable for their acts or omissions.

The report further states that as on date many multinational companies and technology giants are avoiding tax liabilities and are avoiding compliance with various regulatory requirements. This would not be an easy task in the year 2013.

These predictions and projections seem very accurate as many cases were settled in the year 2012. These include cases and settlements pertaining to Walmart probe, UK tax avoidance case, unauthorised sale of e-book in China, e-book price escalation lawsuit, EU-publishers e-books price fixing settlement,  regulatory scrutiny by EU and US, etc.

In the present case, FTC investigators were of the opinion that they didn't find enough evidence to support complaints that Google unfairly favors its own services in search results. Google has also agreed to license certain patents to mobile phone rivals and stop a practice of including snippets from other websites in its search results.

To give effect to this settlement, Google will sign an agreement requiring the company to charge reasonable prices to license hundreds of patents deemed to be essential for rival mobile devices such as Apple Inc's iPhone, BlackBerry and smartphones running on a Microsoft Corp's Windows software.

Under the FTC resolution, Google's rivals will now be able to request that their excerpts are left out of Google's search results without having to fear that links to their sites will be penalised in Google's search rankings. Google has further agreed to adjust the online advertising system that generates most of its revenue so marketing campaigns can be more easily managed on rival networks.

Google, Facebook, Samsung Etc May Face More Scrutiny From EU And US Regulators

By Geeta Dalal

Multinational companies have been trying new policies and strategies to maximise their profits. Sometimes these policies are legally sustainable whereas at other times they violate laws and regulations of one or more nations.

Recently it was reported that Indian government would ascertain beneficiary in Walmart probe to ascertain possible violation of Indian laws. Similarly allegations of tax avoidance have been labeled against Amazon, Google and Starbucks regarding UK Tax Laws. Apple has been fined by Beijing Court for unauthorised sale of e-book. An e-book price escalation lawsuit has been settled by Penguin Group. The European Commission and publishers’ settlement for e-book price fixing is also known to public.

These developments took place in the year 2012. The year 2013 may see more regulatory actions against big multinational companies and technology companies. The Ireland route of tax management may also be closely monitored. In fact, on 21 December 2012, an Agreement to Improve International Tax Compliance and to implement the Foreign Account Tax Compliance Act (FATCA) was entered into between Ireland and United States.

Not only taxation issues but even anti trust issues may see more focus. For instance, Google is already facing an antitrust investigation relating to its search services in the hand of European Union (EU) and Federal Trade Commission (FTC). Google has already settled $22.5 million settlement with FTC over charges that it bypassed Safari browser privacy settings that blocked cookies. Samsung Electronics will be facing charges from the European Commission for breaking antitrust rules in its refusal to provide competitors like Apple access to its technology. The European Commission believes that Samsung abused its dominant position in the market by filing patent lawsuits against its rival Apple

 Meanwhile, the FTC is investigating Google over possible antitrust violations and will subject Facebook to audits of its privacy policy for the next 20 years. FTC would ascertain whether Google's search engine results favour Google products over its rivals'. Although FTC was ready to settle that case before the holidays, without harsh remedies, late last month it shelved the inquiry and put stronger penalties back in play. A resolution is expected in January.

Regarding Facebook, FTC negotiated a consent order with Facebook to settle charges that it had engaged in “unfair and deceptive practices” when changes in its settings revealed personal information that Facebook users had regarded to be private. As part of the settlement, Facebook agreed to audits of its privacy policies for 20 years.

Facebook was also in controversy recently when its subsidiary, Instagram, proposed to deploy users' pictures to serve targeted advertisements. Facebook had to change that plan due to public protests. This is a good sign for privacy protections of the users/consumers of these companies.

Unfortunately, public awareness about privacy protection and data protection is still very poor in India. Even we have no dedicated privacy protection laws in India and data protection laws in India. However, this does not mean that multinational companies and technology companies can take Indian users and consumers lightly.

Source: Legal Enablement Of ICT Systems In India.

Google’s Antitrust Suit For Search Abuses Before FTC May Be Settled Very Soon

Antitrust or anti competition issues are very frequently agitated these days. Not only rival are very particular in bringing their competitors to books who are indulging in antitrust activities but even the regulatory bodies have become very vigilant in launching investigations against defaulting companies.

Perry4Law has already discussed about the Global Taxation and Antitrust Regulatory Issues In 2012 And Projections Report for 2013.  The same has covered most prominent international taxation and antitrust investigations, cases and settlements of the year 2012. The research report of Perry4Law has further projected the trends for the year 2013.

The chief among these cases and settlements are Walmart probe, UK tax avoidance case, unauthorised sale of e-book in China, e-book price escalation lawsuit, EU-publishers e-books price fixing settlement,  regulatory scrutiny by EU and US, etc.

The latest to add to this list is the allegations by Microsoft against its chief rival Google. Microsoft has alleged that Google executives have blocked a full-featured YouTube app for Windows Phone. These allegations have been labeled by none other than the chief lawyer of Microsoft through his blog post.

Google is already facing antitrust investigation regarding its search services and this allegation of Microsoft may put additional pressure upon Google. The antitrust investigation against Google may result in a settlement most probably within this week.

As far as our own experience with Google’s search is concerned, Perry4Law’s Techno Legal Base (PTLB) has observed that Google censored and demoted many of our blogs simply to serve its own commercial interests. For instance, the following blogs have been demoted and subjected to manual action penalty by Google without any reason and justification:

(1) Cyber Forensics In India

(2) Cyber Security In India

(3) E-Discovery Services In India

(4) E-Commerce Laws And Regulations In India

(5) Perry4Law Techno Legal Base (PTLB)

(6) Corporate Laws In India

(7) Techno Legal Online Dispute Resolution Services.

(8) International ICT Policies And Strategies, etc.

Clearly, there is substance in the allegation of misuse of s almost monopolistic position of Google’s search capabilities. Platforms that do not or are not supporting Google’s own commercial interests are frequently demoted and censored.

With the continuous censorship and SERPs manipulations by Google, we have started dedicated initiatives like websites, blogs and news censorship by Google and India blog and a LinkedIn discussion group titled websites, blogs and news censorship by Google and India.

Google is also deliberately engaging in anti DMCA activities. Google has once again removed the original and copyrighted article instead of removing the copyright infringing material. Our article titled “Cyber Security Capabilities of India Must be Strengthened” has been shifted to draft folder by ignorant employees of Google. Even after republication, the original link is not inactive.

We hope both Federal Trade Commission (FTC) and European Union (EU) would consider all the aspects before reaching any settlement regarding Google’s SERPs manipulations. Interested parties may contact us from their official e-mails ids for more information in this regard.

Global Taxation And Anti Competition Regulatory Issues In 2012 And Projections Report For 2013 By Perry4Law

This article is part of the research work of Perry4Law, India’s exclusive techno legal corporate, IP and ICT law firm.

Taxation and antitrust laws are in limelight these days throughout Europe, United States (US), United Kingdom (UK), China, India and other places of the world. Consider the examples of various technology companies that are in the limelight for the wrong reasons.

For example, recently an e-book price escalation lawsuit has been settled by Penguin Group. Similarly, the European Commission and publishers’ settlement for e-book price fixing is another incidence where regulatory bodies have taken acts of technology companies seriously. Media reports are also projecting that Google, Facebook, Samsung etc may face more scrutiny from EU and US regulators in the year 2013.

In the United Kingdom as well regulatory authorities are not happy with the taxation affairs of various multinational and technology companies. Public outcry erupted when allegations of tax avoidance were labeled against Amazon, Google and Starbucks regarding UK Tax Laws.

Even in China companies are facing punishments for violating local laws. For example, Apple has been fined by Beijing Court for unauthorised sale of e-book. Indian government is also not far behind. After canceling the telecom licenses of many telecom companies, now Indian government would ascertain beneficiary in Walmart probe to ascertain possible violation of Indian laws.

The Competition Commission of India (Procedure in Regard to the Transaction of Business Relating to Combinations) Regulations, 2011 have also been formulated by the Competition Commission of India in 2011 to regulate anti competition combinations. The same may be pressed more frequently in the year 2013.

The year 2013 would see an enhanced regulatory scrutiny by various regulatory bodies and authorities throughout the world. Countries are also entering into bilateral treaties to make the respective companies liable for their acts or omissions. Presently many multinational companies and technology giants are avoiding tax liabilities and are avoiding compliance with various regulatory requirements. This would not be an easy task in the year 2013.

About Perry4Law

Perry4Law is the Exclusive Techno Legal Corporate, IP And ICT Law Firm of India that is providing domain specific services on Corporate, IP and ICT matters such as Banking and Finance, Business Setup, Corporate and Commercial Advisory, etc. See Perry4Law’s Services for more details.