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Eurobites: Kenyan Regulator Drops Safaricom Break-Up Plans

Paul Rainford

Also in today's EMEA regional roundup: Google's massive Dutch Sandwich; Spotify faces lawsuit as streaming takes over.

  • Kenya's telecom regulator has abandoned plans to break up the country's dominant mobile operator, Safaricom Ltd. , into smaller units, according to a Reuters report citing the Business Daily newspaper. An initial draft of a report from the regulator, leaked in February 2017, had recommended the break-up of Safaricom, but the latest, revised version of the report drops the proposal, according to Business Daily. Safaricom, in which South Africa's Vodacom Pty. Ltd. holds a 35% stake, boasts 29.4 million users, equating to more than 70% of Kenya's total mobile user base. For more details of the latest shenanigans, see this story on our Connecting Africa sister site. (See Eurobites: Safaricom Looks Beyond Kenya.)

  • The tax affairs of Google (Nasdaq: GOOG) have been facing scrutiny in Europe for some time -- and the company's filings with the Dutch Chamber of Commerce for 2016 help explain why. According to Bloomberg, the online giant shifted €15.9 billion ($19.2 billion) to a Bermuda shell company in 2016 as part of what is known in the trade as a "Dutch Sandwich," whereby revenue from one Irish subsidiary is moved to a Dutch company with no employees and then on to a Bermuda "mailbox" owned by another Ireland-registered company. The amount shifted in 2015 was 7% higher than the equivalent figure in 2015, and is thought to have saved the company between $2 billion and $4 billion in taxes. The loophole is due to be closed, but not until the end of 2020. (See Eurobites: EU Wants Tax Transparency From Tech Titans.)

  • Sweden's all-conquering Spotify has been sued by a Californian music publisher that says the music-streaming service has infringed the rights of songwriters and publishers. According to the BBC, Wixen Music Publishing -- which represents the estates of big names such as Janis Joplin and Tom Petty -- is claiming at least $1.6 billion in damages. It's a problem that Spotify could do without as it prepares for a potential IPO.

  • On a brighter note for Spotify and its rivals, new industry figures from the BPI reveal that more than half of all music consumption in the UK last year was accounted for by streaming. As the Daily Telegraph reports, streaming revenues rose by 42% last year to £577 million ($782 million).

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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