California
08 July 2016
Reporter: Barney Dixon
Facebook IP transfer raises questions
The US Department of Justice (DOJ) has flagged up Facebook’s transfer of intellectual property rights as key to an investigation into the social media platform’s 2010 tax return.

In a petition filed on 6 July, the DOJ asked the US District Court for the Northern District of California to enforce Internal Revenue Service (IRS) summons that were issued in 2013.

The investigation aims to understand a transfer of a large portion of Facebook’s IP rights to a subsidiary in Ireland, along with “certain agreements between Facebook Inc and Facebook Ireland Holdings Limited”.

IRS revenue agent Nina Wu Stone requested that Facebook personnel attend a hearing on 17 June and provide records, papers and other requested data.

But Facebook personnel neglected to attend, spurring the IRS to launch a petition requesting that a court order attendance.

Stone stated in support of the petition that so far, the information gathered, “suggested that the approach to valuing Facebook’s transferred intangibles on a standalone basis was problematic”.

The IRS believes that Facebook US formed Facebook Ireland and transferred IP rights to it to develop the online platform as a social networking website, maximise the number of users, advertisers and developers, as well as the volume and amount of advertising sold, and to maximise profit—”all in countries outside the US and Canada”.

On 27 May 2015, Facebook responded to the IRS examination, rejecting its preliminary position and arguing that “Facebook Ireland had developed its own user-based intangibles”.

In a statement, Facebook said it “complies with all applicable rules and regulations in the countries” in which it operates.

More social media news
The latest news from IPPro The Internet
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
UK cracks down on misleading social media posts
12 August 2016 | London | Reporter: Barney Dixon
The UK Competition and Markets Authority (CMA) has secured undertakings against social media marketing company Social Chain over mislead advertising...
Facebook IP transfer raises questions
08 July 2016 | California | Reporter: Barney Dixon
The US Department of Justice has flagged up Facebook’s transfer of intellectual property rights as key to an investigation into the social media platform’s 2010 tax return...
Photo bomb campaign 'misled' consumers
31 March 2016 | Washington DC | Reporter: Mark Dugdale
The FTC is seeking feedback on its proposed consent order with Lord & Taylor that attempts to settle allegations the department store chain broke native advertising rules and misled consumers with a ‘photo bomb’ campaign on Instagram...
Beware fake LinkedIn profiles, says Symantec
04 December 2015 | Los Angeles | Reporter: Mark Dugdale
Online scammers are using fake LinkedIn profiles to map professionals’ networks and steal contact information, according to Symantec...
Operation Jasper targets social media
26 June 2015 | London | Reporter: Tammy Facey
Criminals selling dangerous and counterfeit goods on social media have been targeted in the largest ever national crackdown on piracy across England, Wales and Northern Ireland...
Spotify doesn’t add up, says Swift’s label
14 November 2014 | Sweden | Reporter: Tammy Facey
Taylor Swift’s record label, Big Machine, has rubbished Spotify’s claims that the artist would have earned $6 million this year if she had...
Swift: I knew Spotify was trouble when it walked in
12 November 2014 | Sweden | Reporter: Tammy Facey
Spotify has come out fighting following music artist Taylor Swift removing her entire catalogue of music from the streaming service...