Wednesday, 26 December 2012

Amazon and Google, the tarnished brands: Their popularity plummets after row over tax payments

  • Amazon slips from first place to third over last year in YouGov list
  • Google dropped out of the top ten in the BrandIndex table
  • Both companies have been accused of avoiding millions in tax
  • The BBC's iPlayer service tops the list with John Lewis second


  • Amazon and Google have seen their popularity plunge after being accused of avoiding paying millions in tax.
    An annual list of the country’s favourite brands has seen Amazon slip from first to third, while Google has dropped out of the top ten.
    The BrandIndex table is calculated by YouGov, which polls a different set of 2,000 people every day about whether they have heard anything good or bad about brands, be it via advertising, the media or word of mouth.
    top 10 brands of the year

    The BBC’s iPlayer catch-up service came first in the 2012 rankings, with a score of 30. John Lewis was second with 24.6, and Amazon third with 24.1.
    BrandIndex director Sarah Murphy said: ‘Amazon had a score of 32.1 last year, so a fall of eight points is a statistically significant drop for them.’
     

    She attributed the fall to ‘the recent tax avoidance debate’. This year a devastating report by MPs attacked Amazon and Google for paying extremely low tax rates by basing themselves abroad.
    The techniques, branded ‘immoral’ by the public accounts committee, were laid bare in Parliament after executives were called in to explain themselves.
    Drop: Amazon dropped from first place in 2011 to third place this year in an annual list of the country's favourite brands
    Drop: Amazon dropped from first place in 2011 to third place this year in an annual list of the country's favourite brands
    Controversy: Amazon has been accused of avoiding paying millions of pounds in tax
    Controversy: Online retailer Amazon has been accused of avoiding paying millions of pounds in tax
    Amazon admitted basing its European operations in Luxembourg because of the country’s low tax. It paid no UK tax in 2010 on revenues of £3.3billion.
    Similarly, Google paid only £6million to the Treasury last year on UK sales of £2.6billion. The technology firm, which was accused of avoiding more than £200millon in tax by basing its operations in Ireland, admitted structuring its affairs to minimise its liability.
    Google finished fourth in last year’s BrandIndex list with a score of 26.7, but this year failed to make the top ten after dropping 15 points.
    The BBC received two entries in the top ten, despite a difficult year dominated by the Jimmy Savile scandal. In addition to iPlayer taking the top spot, the corporation’s website, bbc.co.uk, came eighth.
    Controversy: Google finished fourth in last year¿s BrandIndex list with a score of 26.7, but this year failed to make the top ten after dropping 15 points
    Controversy: Google finished fourth in last year¿s BrandIndex list with a score of 26.7, but this year failed to make the top ten after dropping 15 points
    Google chairman Eric Schmidt said he was 'very proud' of the elaborate structure that helped the search giant slash more than £200million from its UK tax bill last year
    Denial: Google chairman Eric Schmidt previously said he was 'very proud' of the elaborate structure that helped the search giant slash more than £200million from its UK tax bill last year
    The BrandIndex director said: ‘With all the dreadful things that have happened, the BBC brand is still very strong.
    While the BBC umbrella brand is definitely being hit and is at the lowest levels ever seen, there has been no knock-on effect for products like the iPlayer and its website.’
    London Underground received  its first ever positive scores during the Olympics, thanks to the transport network’s unexpectedly smooth performance during the Games.
    Surprisingly, energy companies recorded big rises, with British Gas and Scottish Power gaining 8.1 and 7.1 points respectively – but this is probably due to their abysmal performances in 2011.

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