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This is Business Live
from BBC News, with Sally
Bundock and Rachel Horne.
Taxing the tech titans -
the European Commission is set
to make big changes to the loopholes
open to the likes of Amazon,
Google and Apple.
Live from London,
that's our top story
on Wednesday 21st March.
The EU slaps down Silicon Valley -
reports suggest that new measures
will stop the practice of shifting
profits to countries
with the lowest rates of tax.
Also in the programme,
more investor reaction
to the Facebook data row.
The social media giant suffers
another big drop in market value.
Does Mum knows best?
A mixed day emerging markets in
Europe. We will talk you through the
winners and losers.
Does Mum knows best?
We'll be looking at a new social
network designed to help mums
share their experiences.
And #deletefacebook has been
trending on Twitter -
we want to know have
you checked your privacy settings?
Just use the #BBCBizLive.
Hello and welcome to Business Live.
Welcome to the programme.
Let's start with a focus
on the tech world.
The European Commission plans to get
the world's biggest tech companies -
the likes of Google,
Facebook and Amazon -
to pay their fair share of tax.
These firms have been criticised
for booking their profits
in countries with the lowest
corporation tax rate.
Brussels' plan is to tax a companies
digital revenues based
on where users are located,
rather than where their
For example, the French
government collects just
over 33% in corporate taxes.
This compares to a tax rate
of just 12.5% in Ireland.
Under the EU's plans, there will be
a blanket 3% tax on sales,
collected in the country
where sales takes place.
It could include products
such as Google's
or Apple's streaming services,
although the details are unclear.
With me is Oliver Smith,
senior reporter, Forbes Europe.
Oliver, let's start. -- let's start
there, the details are not the
clearest. How will they define these
France have been calling in Europe
to act on this problem for years,
now finally they are. They are
defining these companies as those
that make them money from streaming
services, subscription services and
advertising. Companies like Google,
Apple, Spotify are all potentially
in the limelight.
interesting is 3% may sound like
quite a low tax bracket. But it is
3% on revenue, not profit?
quite unusual. It is quite a blonde
force approach. -- blunt force
approach. Because of countries like
France and Britain, who were coming
up with their own taxes because
Europe has not been active, so now
the EU feels it has to do something
and act quickly. This is the
quickest way of putting down a
blanket tax across Europe.
announcing today. It has to be
ratified by EU members. When should
we see it come into play?
don't know. It could be months, it
could be longer. The EU wants to
come up with a longer term plan to
stop profit shifting around Europe.
These things will take a lot of
time. Not any time soon,
Say I run a company,
and you are my retailer in Germany,
Sally lives in Italy. Where does the
tax get paid?
Sally is the
subscriber to the digital service,
the country she is in is the country
where the tax will be collected.
That is very different to how it
works today, where the tax should be
collected at source where the
company is headquartered. That is
the shift. It is where the consumer
is based rather than the company.
lot of people will look at this and
think, these big companies, deep
pockets of resources, they will get
out of this one?
Yeah, and I'm sure
we will hear about stories just like
that. The good thing about taxing it
where the customer is based, is it
should give the EU more power to
actually see where the money is
moving. When you are trying to
figure out the profits, it becomes
quite complicated, especially with
the system is the companies have. We
have to wait and see but hopefully
it gives them a good tool to use.
Laura Smith, thank you.
-- Oliver Smith.
Let's take a look
at some of the other
stories making the news.
German prosecutors have raided
the headquarters of BMW
as part of an investigation
into the suspected use
of emissions cheating software.
About 100 police and law enforcement
officials searched the luxury
carmaker's Munich headquarters
and a site in Austria.
They opened an investigation last
month over suspected fraud.
Toyota has suspended US tests
of driverless cars on public
roads, following a fatal accident
in Arizona involving one
of Uber Technologies'
Toyota said it was concerned
about the "emotional effect"
the incident might have
on its test drivers.
Facebook is being investigated
by the US Federal Trade Commission
over the alleged misuse of user data
on the network.
It comes after allegations that
50 million Facebook users' private
information was misused by research
firm Cambridge Analytica.
The UK-based firm suspended
its chief executive on Tuesday.
We'll get more on this story
later in the programme.
China's Tencent, the
owner of the popular
we-chat messaging app,
is now about $72 billion more
valuable than Facebook as the US
social networking giant deals
with a string of controversies.
There is a lot going on in financial
markets at the moment.
Tencent is due to
reports its latest set
of financial results later today.
Sarah Toms is in our Asia
business hub in Singapore.
Sarah, this is interesting, how
things are changing. As Facebook
Foals, Tencent is seen as more
That's right. Tencent is
often known as China's Facebook. It
seems very appropriate at the
moment. The two social media giants
have been neck and neck in value for
quite some time. But now the gap has
widened after the crisis. Billions,
tens of billions of dollars in fact
have been wiped off the value of
Facebook. And of course as Facebook
is dealing with this crisis, China's
largest corporation is riding on a
huge wave of success. It has got
some new hip games, a growing ad
business, and the momentum is still
growing for a wee chat, the all in
one messaging service that drives
it. Tencent is just about to release
its earnings. This is a very
important timing. Investors
expecting some strong results.
Tencent is projected to report a 56%
growth for the last quarter of last
year. This is bound to be a positive
impact on the Tencent stocks
tomorrow. As a result, we could even
be seeing a bigger gap between
Tencent and Facebook.
Yes, we will
watch this space closely. Let's look
at marketing General. We had a day
of no action at all in Japan. That
is actually Tuesday's close.
Elsewhere in Asia we saw a mixed
day. Monday and Tuesday were days of
is quite significant declines for
Asian share markets. Today wasn't
too bad. Emma Gees shares were in
favour. -- energy shares. Opec is
accelerating plans for curbing a
worldwide supplied last. The oil
price has been going up, energy
stocks in favour. Lots of corporate
news out today. Take a look at the
Business Live page, which keeps you
up-to-date. B&Q shares down 7% in
London. Disappointing results. Moss
brass -- moss brass shares down as
well. A disappointing trading
statement. I Street retailers really
struggling. News of -- news of an
emergency loan from Carpetright. It
has got emergency funding. That
gives you a sense of what is going
on. Very busy. Add to that the
Federal reserve. It will wrap up
it's two-day meeting.
And with more details
on the Federal Reserve
meeting later today,
Kim Gittleson has this
report from Washington.
He has the wisdom and leadership to
lead our economy through any
challenges are great economy may
On Tuesday, Jerome Powell got to
live the dream. He began his first
meeting of the head of America's
The Federal reserve is
one of the most important
institutions in our government.
people expected -- expect the
Federal Reserve to impress interest
rates. -- increase. But the problem
is who will be impacted by an
increase. There are three main
groups. Savers have not been able to
learn anything on their savings for
nearly a decade now. But slowly,
very slowly, savings are starting to
increase in the United States. The
second group are American workers,
who may have to pay a little bit
more for a mortgage or a car loan.
American workers are taking on
bigger paycheques. They should be
able to weather a rate increase. The
group that should be worried is US
corporations. Today one in ten of
them are zombies. Instead of gorging
on brains, they have been gorging on
cheap debt. Now they are not making
enough in profits to cover the
interest on that borrowed money. So
when the Fed starts raising interest
rates, well, the walking dead could
be headed for the unemployment line.
It is not often you see zombies on
Business Live! We are open to
Joining us is Ben Kumar,
investment manager at
Seven Investment Management.
Let's talk about the Federal reserve
decision. Everybody is expecting a
rate rise, aren't they?
Everybody has talked a lot about the
new governor coming in. He is part
of the establishment. He has been on
the Fed for years, he has been on
the Treasury. He is not some random
guy. He is embedded in the policy in
the US. People are not expecting any
different process than we have seen
already. A rate rise today and a
couple more in the next six to nine
Rates could go up four
times. What you just said about
Jerome Powell, business as usual,
that is a help right now, isn't it?
Absolutely. The Fed has done a
fantastic job of getting interest
rates up. That has kept markets
calm. It is important the
continuation of that is his policy.
You will see him struggle a little
bit with the first communication he
has to make. But that is OK.
talk about a story Sally has been
excited about. Amazon and alphabet
have overtaken Amazon in terms of
market share. Other way round,
It's just kind of showing us about
sentiment and perception at the
moment about Facebook shares, Google
Your thoughts? Alphabet
makes most of its revenue from
advertising. It is Google ads. They
are targeted, they do involve data.
Amazon is a bit different. It makes
money from lots of different places
and not so much the advertising. It
does get a sentiment kick when we
see companies like Facebook and
Google being pressured by people
asking, are they doing nasty things
with my data?
The concern is more
tighter regulations, and companies
like Facebook having less scope to
make money out of our information?
Absolutely. The digital world has
undergone some scrutiny. The EU tax
we talked about. The idea of data
and privacy, regulators are starting
to get up to speed.
Nobody knows how far this could go.
You will be back to talk about the
papers at the end of the programme.
It is not often he has more to do.
Still to come - mum's the word!
Later in the programme we'll take
a look at the new smartphone app
which is helping mums meet up.
You're with Business
Live from BBC News.
Insurer Lloyd's of London has
reported a £2 billion
loss for last year,
describing it as "one
of the costliest years for natural
catastrophe in the past decade".
It was the insurer's
first loss in six years.
That compares with a £2.1
billion profit in 2016.
Earlier we spoke to Inga Beale,
the chief executive
of Lloyd's of London.
This really shows Lloyds,
I would have said,
to its full strength.
We have been around for 330 years
now supporting businesses and people
get their lives back together
when disaster strikes.
We saw some very tragic
scenes last year.
We had hurricanes
sweeping through the US -
Hurricanes Harvey, Irma and Maria.
There was also an earthquake
in Mexico, there was flooding
in South Asia, wildfires
in California, I mean there were
so many tragic events happening.
But then Lloyds stepped
in and we paid out last year
about £18.3 billion in claims,
basically putting people
back on their feet.
And despite that, Lloyds
is in a really strong position.
At the end of the year
no syndicate failed,
every syndicate is still in business
and was recapitalised,
meaning that Lloyds is in a really,
really strong position.
When it comes to something
that we can model, we do a lot
of statistical modelling around
the risks that we take on,
all of those exposures,
and in fact the whole insurance
sector has spent billions
trying to understand this.
When something like climate change
is impacting these events,
we have to build that
into our modelling and our
forecasting of how much
these events can cost.
But while we can quantify
what they cost, we don't know
when they will happen
and that is one of the difficult
things nobody can assess.
But we make sure, therefore,
that we have enough capital
in the market to support those
potential disasters and that is how
we run our business model.
And of course we have to make sure
that we collect premiums in,
that we look after those premiums
and invest those premiums
because on the other side we pay out
claims but we also make
some investment income.
That was the chief executive of
Lloyd's of London. There was a story
we mentioned, copyright clinching an
emergency loan from looking at a
voluntary agreement to help it
reduce the property issue joining
the likes of Biron and Jamie's
Italian, all struggling on the high
You're watching Business Live.
Our top story -
the European Commission is set
to announce new measures to prevent
tax avoidance by the world's
biggest tech companies.
The new rules are expected
to force the likes of Apple,
Amazon and Google to pay taxes
in the country where sales
are made, as opposed to the current
system where companies pay taxes
where they book their profits.
More detail on that on our website.
Let's get the inside track
on a new social network
which is hoping to provide parents
with friendship and support.
Mush was born when Katie met
co-founder, Sarah Hesz,
in a playground on a rainy day.
The pair struck up
a chance friendship,
but realised that technology
could provide a far easier way
for like-minded mums
to meet one another.
With us is Katie Massie-Taylor,
co-founder of mum's
networking app, Mush.
Thank you for coming in. This was an
invention born of necessity, you
were feeling a bit lonely and
overwhelmed and you met up with
Sarah and it went from there?
came and chatted me up in the
playground! That was three and a
half years ago and three months
after we had spent every day
together doing average stuff, we
realised the lifeline the friendship
had been and there was not
technology there to make it easy for
local mums to meet other mums in the
We have heard from other
social media website, even Peanut
which is a similar app, but what is
unique about your app?
We were the
first ones to come out with an app,
websites had existed and done a
wonderful job of giving online
support but what we wanted to do was
facilitate off-line meet ups. Mums
can find other mums nearby and
message and meet up together and
meet in a group as well. That is
what we stick by now. We have group
meet ups through the app which sets
it apart from anything else which
maybe looks at 121 friendship.
are you making money?
We have been
fortunate to get VC funding, people
who spot the opportunity for social
network to come from this. By happy
consequence it has been something
that mums really love and are asking
us for features and functionality
that we can add as a premium
So basically it is free but
if you want more you have to pay for
that? And a monthly fee?
That is the
idea, it is a year away but that is
where we will ultimately end up.
are a social network, at a time when
social networks are in the headlines
overprotection of user data so what
are you doing to your users safe and
have you been approached by
companies looking to buy the
Safety is key for the
users, it is something mums feel
passionately about, the data about
themselves and their children
remaining safe and that has always
been at the forefront of our minds.
We don't sell any third party data,
we proudly keep it to ourselves and
partly the reason we are looking to
monetised over premium substituent
is so we're not playing to the
Browns. This is an attractive
audience to them -- Iturbe brands.
We want to make the product
brilliant for the mums rather than
to sell their data.
This is the whole issue of what apps
you are using and the information
you are giving out, you don't know
where it might end up or how it is
being used but I guess you are
saying with your app that you pay
for a service and that it intends up
out we are monetising it, when not
being paid to push clothing wear on
you or health products or whatever.
There is no hidden agenda. Last week
made it clear, there is nothing to
hide, we are here to help and
support mums, there is no other
Thank you very much for your
time. The other co-founder is
She has just had a
Congratulations -- Sarah. Here
is how Tuesday in touch. Stay
up-to-date with all of the business
news as it happens on the BBC
Business Live page weather is
analysis from our team of editors
around the globe. And we want to
hear from you as well also get
involved on our web page. And on
Twitter and you can find us on
Facebook. Business Live come on TV
and online, what you need to know
when you need to know it. Ben is
back. We have the issue of Facebook
which is very much in the press.
Let's talk about some of the
coverage. We were talking about the
share price. One thing I was put
into a low-cost bond and in San
Francisco, in the long-term, how
damaging is this for Facebook? It is
hard to measure at this point?
have seen a few privity scared in
the last decade and has managed to
come back and improve privity
settings but this seems to go wider,
this is selling data with it seems
like Melissa 's outcome and that is
Let's look at what people
have been saying -- malicious
outcome. Luke says he did check his
settings and yet deleted his
account, he will not be using it
again. Andrei said he always update
his proceeds settings but shies away
from some of the more confidential
questions. Another says yes, I have
disabled apps. A lot of people are
looking at everything. And also on
Twitter there was one from Nordea
who have said they have put Facebook
investment on quarantine in their
sustainable funds. When you get big
corporations like that voicing
concerns about what can it mean for
something like Facebook?
It is a
real problem, sustainable funds are
getting larger and larger. When they
avoid an industry or a sector it
damages it. Think of the oil
industry and people moving away from
it. Facebook and companies that
cannot prove they protect their data
could be in trouble.
plastic which is in the news. A new
scientific report is warning us that
in the next decade the amount of
plastic in the sea will treble.
Despite the fact there has been so
much publicity about this problem it
is going to get worse and commercial
organisations are making the most of
the oceans which is interesting.
is the ocean is 70% of the world and
it is not really regulated. Other
than close to shore, corporations
can get away with it, and there is a
lot of press but mainly in the
developed world. In emerging market
company is basically able to dump
stuff in the ocean without
We talked about
harvesting the sea bed for seaweed
or putting up wind farms and some of
this is being done without
regulation and companies are taking
advantage of a free resource is how
many people see it.
So much is
readily do on land, companies are
looking that there is masses of
space and Rhys Oates and nobody is
controlling what they do.
interesting story in the New York
Times, the Saudi Arabian crown
prince is in the US, he met with
Donald Trump yesterday. It is all
over the media. They are talking
about how they get on extremely
well, the White House reinforcing
Trump's commitment to air apparent.
It seems they are on the same page
on many issues.
They seem to have
some sort of camaraderie, there is a
lot of support between them. The
interesting thing when you look at
Saudi Arabia and Aramco, are they
pulling back because the oil price
has gone higher?
That is the market
listing of the state owned Aramco
which is worth a heck of a lot and
the stock markets around the world
want a bit of the action. It has
been a couple of years there has
been talk of this listing in London
and New York both trying for it to
The size of this company,
it will be the first trillion dollar
company, maybe even $2 trillion also
at flotation. It is why people want
to get involved. Saudi Arabia are
saying, maybe we like it being a
state run and not having to tell the
market exactly what we do behind
Interesting. Thank you
for your time.
That's it from Business Live today.
We will keep you up-to-date
throughout the day on our website
and also here on the BBC. Thank you
for joining us, we will see you