Your Weekly Commercial Awareness Update – w/c 18th March

Your round-up of the stories that you should discuss at interview this week:

Lorraine Kelly wins tax case against HMRC

Reported by Laura Clarke

Television personality Lorraine Kelly has won a disguised employment case against HM Revenue and Customs and the UK tax tribunal. The judge ruled she was not employed by ITV, but rather performs as her chatty TV persona.

Kelly received the income tax bill back in 2016 which totalled £1.2 million.

HMRC claimed the presenter was an employee of ITV, but Kelly and her lawyers argued she was instead a freelance worker. Judge Jennifer Dean found in Kelly’s favour, ruling she was a self-employed star as opposed to employee of the media giant.

The tribunal found Kelly did not receive benefits such as holiday or sick pay and was allowed to carry out other work.

Managing director Joe Tully has commented that Kelly won this case as HMRC were unable to prove ITV was controlling her in the same manner that they would an employee. Tully said “the question of control is key to determining if a person is employed or self-employed and clearly HMRC has struggled with interpreting this.”

The decision presents a significant setback for HMRC, who in recent years have launched several cases against high profile broadcasters. A spokesperson for HMRC has said:

“We will carefully consider the outcome of the tribunal before deciding whether to appeal.”

Find out more here.

May to ask for Brexit delay time

Reported by Sarah Mullane 

Prime Minister Theresa May is set to write to the EU asking for a delay in Brexit following the recent defeat of her withdrawal deal.

Last week Mrs May’s second withdrawal deal was rejected by MPs by 149 votes, leading to strong uncertainty as to the future of the UK’s relationship with the European Union. MPs decision to reject the deal for a second time resulted in Speaker John Berkow ruling out a third vote unless MPs are given a new motion, producing even more uncertainty for the already undetermined Brexit plans. However, one thing that was for certain was the disdain for a no deal Brexit, with a clear majority voting in favour of extending the Brexit process rather than leaving without a deal.

Despite the plan to formally ask for a Brexit delay, it has been established by EU’s chief negotiator, Michel Barnier, that a Brexit extension will not be granted without a “new event or new political process.” In order to delay Brexit beyond the planned leaving date, all other 27 member states will have to approve the proposal during a summit on Thursday.

Under current law, the UK is set to leave the EU on the 29^th March, whether a deal is in place or not.

For more information see here and here.

EU fines Google for the third time

Reported by Rui Ci Lee

Google was fined €1.49bn by the EU for abusing its market dominance on 20 March 2019 (Wednesday). This is the third time the internet giant is fined by the European regulator. The company was fined €2.4bn for favouring its own shopping service over rivals in 2017, and €4.3bn for requiring Google Chrome to be pre-installed in Android OS phones in 2018.

According to European Commissioner Margrethe Vestager, ‘Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites’. The service in issue is Google’s “AdSense for search” product, an embedded search function found on websites. When a consumer uses the AdSense embedded search function that is used by a third-party website, the tool will deliver text advertisements alongside the search results.

Google has abused its dominant position in the market by including onerous contractual terms in its AdSense contracts with third-party websites. In 2008, ‘exclusivity clauses’ were found in these contracts, whereby website publishers were not allowed to place advertisements from Google’s rivals (Microsoft, Yahoo, etc) on the search pages. This was changed to ‘premium placement clauses’ in 2009. The new clauses required website publishers to keep the most profitable space on the search results page for Google’s advertisements. Additionally, Google had the final say in the display of its rival’s advertisements.

Ms Vestager said that these restrictive clauses ‘led to a vicious circle’. This is because Google’s rivals were unable to compete against the internet giant which dominated 70% of the search intermediation market in the EU between 2006 and 2016. Google has responded by tweaking the way its advertisements are presented.

Read more at BBC.

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