Google used shell companies to negotiate Datacenter deals in the US

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Amazon recently faced backlash over how tight-lipped the e-commerce giant was in negotiating an incentive package with the city and state of New York. After that, the e-commerce giant abandoned its plans to build a big New York City campus. According to the Washington Post, Amazon is not the only company that goes around this way to obtain land for expansion.

US-based tech giant Google recently announced its plans to build massive data centres across the US with an expense of at least $13 billion. Soon after the buzz, a group called Partnership for Working Families acquired secret documents which show that Google has used confidentiality agreements in its bids to secure lands for data centres.

The tech giant has created shell companies for the purpose of negotiation. The US-based social group has sued San Jose, California over non-disclosure agreements the city has signed with Google. Google has used shell companies to negotiate with five cities across the US to build data centres. Moreover, the company has used multiple shell companies and employed code names to negotiate with local officials.

This helped Google avoid revealing it was behind the projects. In an interview with Larry Barnett, the president of an economic development organization in Midlothian, Texas, the Washington Post points out the details about how the whole process works. Know that Google has recently built a data centre in Texas.

Google created a shell company called Sharka to negotiate the tax-abatement and site plans. With another Delaware-based shell company called Jet Steam, Google negotiated the land purchase with a private owner. Moreover, in Iowa, the tech giant created Questa LLC for land sale and Gable Corporation for the development deal.

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Google used a code name (unknown) that was not the same as either of its subsidiaries while approaching Midlothian in 2016. It signed a confidentiality agreement with the Midlothian officials before knowing the developer’s identity. Google revealed its identity a year later. The Washington Post story includes all the links to non-disclosure agreements between Google and cities of Boulder, Colorado, Tennessee, San Jose and Clarksville.

In a short conversation with The Washington Post, Google spokesperson Katherine Williams defended the company’s position saying that it is a common industry practice. She added that the datacenters created by Google added $1.3 billion in economic activity and $750 million in labour income by creating 11,000 jobs across the country.

Companies like Apple and Microsoft have also used code names to negotiate with local officials. Facebook used a shell company called Greater Kudu LLC in 2016 to negotiate for a data centre in New Mexico.

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SW Staffhttps://startupwonders.com/guestpost
Startup Wonders provide startup resources, stories and news to help budding entrepreneurs grow and succeed in their business career.

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