Ethical Standards of Major Internet Companies: A Critical Analysis

This report critically examines the ethical standards and practices of four major internet companies: Google, Dell, Apple, and Facebook. It analyzes their ethical codes of conduct, investigates instances of ethical behavior and misconduct, and explores their tax practices in Australia. The report aims to provide a comprehensive understanding of the ethical landscape within the internet industry and assess the extent to which these companies uphold ethical principles in their operations.

Formative Submission 1
‘How Ethical are Major Internet Companies?’
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Contents
Introduction......................................................................................................................................3
What do people think?.....................................................................................................................4
Ethical code of conduct...................................................................................................................5
Ethical behaviour.............................................................................................................................6
Australian tax...................................................................................................................................7
Summary..........................................................................................................................................8
References........................................................................................................................................9
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Introduction
Ethical standards are the principles that promote values, beliefs, behaviour and kindness. There is
not any consistent set of ethical standards that are followed by the companies but the company
develops the ethical standards which are meaningful to their organization. It is important for the
companies to maintain the ethical standards at the workplaces that involve setting the
expectations, providing guidance to the employees and implementing right things for the
organizational benefit. The report aims to focus on the ethical standards and behaviour at the four
major internet and networking companies namely Google, Dell, Apple and Facebook. There will
be a critical investigation of the ethical standards followed by the respective companies. It is seen
that as per the responses of the people, the ethical policies of Google are best with high ethical
ratings followed by Apple, Dell and Facebook. Facebook has the lowest rating in terms of the
following of the ethical standards and actions.
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What do people think?
1) Is Google committed to offer quality products and services to its customers?
It can be said from the responses that people believe that Google develops its products and
services in compliance with the ethical standards and policies.
2) Is the corporate governance of Dell ethical?
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People found the corporate governance of dell is ethical.
3) Is the supplier code of conduct at Apple ethical or unethical?
As per the responses, it is found that the supplier code of conduct at Apple is ethical.
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4) Are the Facebook HRM policies ethical or unethical?
It is found from the responses that the HRM policies at Facebook are ethical.
Average responses
Companies Average result (in %)
Apple 2.70
Google 2.20
Dell 2.80
Facebook 2.80
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Ethical code of conduct
The ethical code of conduct is a document that states the mission, vision and values of an
organization, ethical procedures followed by the organization and how the organizations will
respond to the ethical challenges and situation. The below discussion will focus on the ethical
code of conduct of the respective internet companies.
Google
Google is committed to follow the highest ethical standards by hiring great people, developing
great products and attract loyal customers. They respect the users as well as opportunities which
is the foundation of their success. The Google ethical code of conduct is built in accordance with
the highest standards of ethical business conduct (Google code of conduct, 2018). The company
preserves the trust of the customers by protecting and respecting their privacy and security in a
confidential manner. The Google ethical code of conduct is precise and easy to understand that
shortly explains the wide ethical standards of the organization. These ethical standards are easiest
to read as compared with the ethical policies of Dell.
Dell
Dell believes in honesty, integrity and highest level of ethical conduct by following the seven
key components; trust, integrity, honesty, judgement, respect, courage and responsibility. The
ethical code of conduct at Dell reflects on the efforts for the maintenance of higher standard for
the personal and business integrity (Dell, 2018). All the employees have to follow the ethical
key components of the organization irrespective of their grade or position. The ethical policies or
code of conduct of Dell are lengthy comparatively with the same of Google, Apple.
Apple
In order to follow and maintain the ethical standards, Apple values the ethical standards of social
and environmental responsibility and inspires their suppliers to work in accordance with the
Apple supplier code of conduct. The company ensure that all the workers and employees must be
treated with utmost dignity and respect. The Apple ethical code of conduct lays emphasis on
major ethical concerns such as Anti-discrimination, Anti-Harassment and abuse, Prevention of
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Involuntary Labour and Human Trafficking. The ethical code of conduct of Apple offers a
detailed description of the ethical actions in a systematic and structured view than that of other
companies.
Facebook
Social networking company Facebook offers ethical guidelines for business conduct which is
applied to all the Facebook Personnel, Board of Directors, employees and its corporate affiliates.
The Facebook ethical code of conduct also focuses on conflicts of interest, harassment,
communications, public disclosures, financial integrity and responsibility, confidential
information, protection of user data etc. (Hoffman, 2016). The Facebook ethical code of conduct
is not clear and effective as compared with the ethical policies of the companies like Google,
Apple and Dell. Also, the code of conduct of Facebook is not easy to understand for some users.
Ethical behaviour
As per the report by Drinkwater (2015), Facebook has been criticised for tracking visitors that
have questioned the privacy of Facebook. It is found in the report that Facebook place cookies on
the visitors to Facebbok.com websites that also includes the fan pages and other pages. Although
the tracking is done for the purpose of advertising but as per the EU privacy law, prior consent
must be given before tracking. As per the law, the practice of tracking with prior consent is
unethical and illegal. The unethical code of Facebook opposes its ethical policy of confidential
information.
In the report presented by Elstrom (2018), it is found that Apple provoked harsh working
environments at its supply partner Foxconn Technology Group where its upscale gadgets were
developed. The harsh working environments led to the rash of suicide cases. After that Apple
developed standards and threatened to pull out the business from those partners and suppliers
that exhibited the labour laws. The company sells more than 200 million iPhones. It outsources
the manufacturing and earns high profitability. Last year also, in order to release two new
models, the company pilled pressure on the suppliers to churn out millions of handsets.
Houlder (2013), in her report published in the Financial Times, reflected on the unethical and
devious behaviour of Google where the company refused to avoid the tax by concealing the
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nature of its business. Margaret Hodge, Chairman of the Public Accounts Committee accused the
group of using smoke and mirrors in order to avoid the tax. It was found in the report that Google
was not following its motto of “Don’t be evil”. The company was going to extraordinary lengths
for the avoidance of the fair sharing of tax.
Australian tax
As per the words of Bagshaw (2017), under the pressure of the Australian Tax Office, Google
and Facebook have started to pay the taxes on the basis of their revenues. It is observed that
Google makes $ 3 billion in sales from the advertising in Australia. Prior this year, its revenue
comes from service arrangements. After the introduction of the multinational anti-avoidance
legislation, Google has found that one-third of its revenue in Australia is Australian. After this
legislation, Facebook has also announced that its Australian revenue has suddenly increased up
to 10 times in a difference of one year. Google in Australia accounted a pre-tax profit of $ 121
million and paid $ 33 million to the corporate income taxes. In case of Apple Group, the
company was not affected by the changes in the Australian legislation that has been introduced
to bring down the multinational tax avoidance (Mather, 2017). Dell Australia has reported the
financial results around AU$11.49 million in after-tax profit, up AU$1.4 million years on year.
The company has paid the tax around AU$5.4 million, including deferred tax amount of
AU$233,000 in the year 2016.
As per the report by Coyne (2015), technology giants like Apple and Google have always been
criticised for their complex tax structures that lead their Australian revenue to lower tax regions
globally. As per the Australian Taxation Office (ATO), in spite of the income of $6.1 billion in
the year 2013-14, Apple taxation amount was only $74 million. Similarly, Google accounted the
Australian income of around $ 358 million; it only paid $9 million in tax. Dell lies in the good
books of the Australian Taxation Office (ATO) that managed to meet their 30% taxation rate
obligation on the basis of their taxable incomes.
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Summary
On the basis of the critical investigation of the ethical standards and code of conduct of the
different internet and technology companies like Apple, Google, Dell and Facebook, it is found
that each company has its own ethical standards and policies as per their requirement. As per the
ethical code of conduct, Apple should be committed and loyal to its suppliers and partners but
the unethical conduct of Apple towards its supply reflected in the ethical issue surrenders its
ethical code of conduct and policies. Also, the company has found in the tax avoidance practice.
Although Google enjoys the sound and ethical position the company has involved in the practice
of tax avoidance that is not up to ethical standards. Facebook has also been engaged in some
tracking issues that are not up to its ethical practices. Dell is found as an organization that
follows the ethical standards and practices effectively. The evidence can be seen from the
systematic payment of the taxes in Australia.
As per the investigation, the final ratings on the ethical conduct and behaviour of the companies
are stated below:
Dell- Highly Ethical
Google- Ethical
Facebook-Highly unethical
Apple-Unethical
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References
1. Bagshaw, E., (2017). Facebook, Google, Apple to appear before Senate tax inquiry. The Sydney
Morning Herald.
2. Coyne, A., (2015). Which tech giants paid no tax in Australia last year?. IT news. Available at
https://www.itnews.com.au/news/which-tech-giants-paid-no-tax-in-australia-last-year-413139.
3. Dell, (2018), Ethics and Compliance. Dell. Available at
http://www1.euro.dell.com/content/topics/global.aspx/about_dell/values/sustainability/
corporate/ethics_compliance?c=eu&l=en.
4. Drinkwater, D., (2015). 'Unethical and illegal' Facebook criticised for tracking visitors. SC
Media. Available at https://www.scmagazineuk.com/unethical-and-illegal-facebook-criticised-
for-tracking-visitors/article/537508/.
5. Elstrom, P., (2018). Apple Supplier Workers Describe Noxious Hazards at China Factory.
Bloomberg. Available at https://www.bloomberg.com/news/articles/2018-01-16/workers-at-apple-
supplier-catcher-describe-harsh-conditions.
6. Google code of conduct, (2018). Google Code of Conduct. Available at
https://abc.xyz/investor/other/google-code-of-conduct.html.
7. Hoffman, A.L., (2016). Facebook has a new process for discussing ethics. But is it ethical?. The
Guardian. Available at https://www.theguardian.com/technology/2016/jun/17/facebook-ethics-but-is-
it-ethical.
8. Houlder, V., (2013). Google accused of devious and unethical tax behaviour. Financial Times.
9. Mather, J., (2017). Apple's taxes given all-clear after five-year audit, Australian chief says.
Financial Review. Available at http://www.afr.com/technology/apples-taxes-given-allclear-after-
fiveyear-audit-australian-chief-says-20170822-gy1chx.
10. Mclean, A., (2017). Dell Australia reports AU$11.49m profit for 2016. ZD Net. Available at
https://www.zdnet.com/article/dell-australia-reports-au11-49m-profit-for-2016/.
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