New Fees for Google Ads?
Re: [Important Legal Notice] New fees for Google Ads served in the UK, Turkey, and Austria
As the sun rose this morning, it brought with it news from Google that ad fees will be increasing on November 1st, for ads running in the United Kingdom, Turkey, and Austria.
If you’re running Google Ads in these markets, here’s what you should start preparing for.
Google Ads Served in Turkey
- Google will be adding a % Regulatory Operating Cost to your invoice or statement
Google Ads Served in Austria
- Google will be adding a 5% Austria DST Fee to your invoice or statement
Google Ads Served in the United Kingdom (UK)
- Google will be adding a 2% UK DST Fee to your invoice or statement
Why is Google increasing the cost of Ads in Turkey, Austria, and The UK?
Here’s the official explanation that was delivered to inboxes everywhere earlier today:
“The Regulatory Operating Costs are being added due to significant increases in complexity and cost of complying with regulations in Turkey. In Austria and the United Kingdom, the DST fee is driven by the new digital services tax in these countries.”
Click Here to View the Full Email About New Fees for Google Ads from Google.
The Reason Why Google Ads are More Expensive in Turkey
Earlier this week, Google announced that they were set to open an office in Turkey in order to comply with Turkey’s new regulations on social media; which these new Google Ad fees will presumably pay for.
On July 29, 2020 the Turkish Parliament passed new legislation that not only bans Facebook, Twitter, and YouTube from operating unless they comply with Turkey’s government censorship regulations, but also requires every major social media platform, with more than 1 million daily users, to appoint a legal representative in Turkey. Each platform’s representative will be expected to be available to the Turkish authorities in order to address their concerns over content and tend to their requests for content removal. Under the new regulations, social media platforms will have 48 hours to respond to orders to remove offensive content. Companies who fail to comply can expect to pay a handsome fee, ranging from $1million to $10 million lira; the equivalent of $146,165 – $1.5 million.
Turkey’s Censorship Regulations and Ban on Social Media
It’s common knowledge to most Turks that their media content is censored. According to an article by The Washington Post, a survey of more than 2,500 adults, that was conducted in 2018, revealed that majority of the Turkish population believed the country’s media to be biased and untrustworthy. The discoveries also suggested that many Turks were turning to social media and independent online news sources for a little more information freedom. The statistical analysis showed that those who found the media in Turkey to be unfree were significantly more likely to make social media their primary news source. Hence, the new regulations being imposed by President Recep Tayyin Erdogan, who has been intensely focused on pushing to control the media.
Google Increases Ad Fees in Austria and the United Kingdom
Kind of like being on the ocean puts you on international waters where there are basically no rules, buying and selling on the internet has become somewhat similar. Over the past few years, conversations about digital regulations have intensified. Because businesses who sell on the internet are able to generate income from abroad, many argue that they should be paying taxes to the countries where users reside. Until now, businesses have only paid taxes in the places where they have a physical presence, and have not been subject to taxes in foreign countries.
The European Union Proposes and Passes Digital Services Tax: A De Facto Tariff
As of April 2020, the UK government and others have imposed a Digital Services Tax (DST) that is intended to tax digital revenue earned abroad by Americans and other countries outside of the EU. According to the Peterson Institute for International Economics, these new tax proposals arise in a general European atmosphere of distrust towards highly successful US firms, exemplified by attacks on US digital firms over privacy issues and concerns that tech giants may be defying EU competition policy standards.
During the wee hours of the morning today, Google officially announced a 2% increase of Google Ad fees to cover the imposed DST fees. Those using the Google Ads platform will see the increase on their regular invoice or statement.
While wars over implementing the DST have been waging since 2018, only a handful of countries in the UE have fully implemented a Digital Services Tax.
Check out this heat map from the Tax Foundation showing the current state of Digital Services Tax around Europe:
