While MPs have been rapping Google for “immoral” behaviour, Mr Schmidt has inflamed the situation by declaring himself “proud” of Google’s complex tax structures, and the overseas subsidiaries which last year helped the company halve its tax bill. “It’s called capitalism,” Mr Schmidt claimed, challenging the government to tighten its tax laws if it wanted his company to pay more.
The government has accepted the challenge to take a tougher stance, with the Prime Minister pledging to drive a co-ordinated international crackdown on tax to ensure that Google and other companies, such as Amazon and Starbucks, “pay their proper share”.
However there does not appear to be any such shift when it comes to copyright law. According to government sources, keeping the search giant onside is seen as key to Britain’s status as a leading light in the technology industry worldwide.
“The PM needs TechCity [the technology development around Old Street roundabout in east London] to succeed and Google is a big anchor tenant of that,” says one senior government figure. “The contribution companies like that can make, to the economy and in terms of employment, is pretty compelling.”
Whether the creative industries can get beyond that – and lobby into the heart of government as Google appears to have done – will shape their future success or otherwise.
Sign up for Computerworld eNewsletters.