How Big Tech Will Be Hit by U.K.’s New Digital Tax

The U.K. has announced a tax targeting the likes of Alphabet Inc. and Facebook Inc. in response to a growing chorus of criticism of cash-rich tech giants. The levy is the first major move by a government to turn disaffection against big tech into policy.

The U.K. Chancellor of the Exchequer Philip Hammond looks to raise 1.5 billion pounds ($1.7 billion) over four years by taxing the largest internet businesses, starting in 2020. The levy will consist of a 2 percent tax on the revenue of business models such as search engines, social-media platforms and online marketplaces. The government plans to tax revenue linked to U.K. users. However, tech companies generally have not been transparent about how much money they make from various regions and business lines.