Alphabet Inc. Incoming Letter Dated February 5, 2019
Total Page：16
File Type：pdf, Size：1020Kb
April 19, 2019 Pamela L. Marcogliese Cleary Gottlieb Steen & Hamilton LLP [email protected] Re: Alphabet Inc. Incoming letter dated February 5, 2019 Dear Ms. Marcogliese: This letter is in response to your correspondence dated February 5, 2019 and March 25, 2019 concerning the shareholder proposal (the “Proposal”) submitted to Alphabet Inc. (the “Company”) by the New York State Common Retirement Fund et al. (the “Proponents”) for inclusion in the Company’s proxy materials for its upcoming annual meeting of security holders. We also have received correspondence on the Proponents’ behalf dated March 11, 2019 and April 1, 2019. Copies of all of the correspondence on which this response is based will be made available on our website at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8.shtml. For your reference, a brief discussion of the Division’s informal procedures regarding shareholder proposals is also available at the same website address. Sincerely, M. Hughes Bates Special Counsel Enclosure cc: Sanford J. Lewis [email protected] April 19, 2019 Response of the Office of Chief Counsel Division of Corporation Finance Re: Alphabet Inc. Incoming letter dated February 5, 2019 The Proposal requests that the Company issue a report reviewing the efficacy of its enforcement of Google’s terms of service related to content policies and assessing the risks posed by content management controversies related to election interference, freedom of expression and the spread of hate speech to the Company’s finances, operations and reputation. We are unable to concur in your view that the Company may exclude the Proposal under rule 14a-8(i)(3). We are unable to conclude that the Proposal, taken as a whole, is so vague or indefinite that it is rendered materially misleading. Accordingly, we do not believe that the Company may omit the Proposal from its proxy materials in reliance on rule 14a-8(i)(3). We are also unable to concur in your view that the Company may exclude the Proposal under rule 14a-8(i)(10). Based on the information you have presented, it does not appear that the Company’s public disclosures substantially implement the Proposal because, among other things, the disclosures do not address how the Company reviews the efficacy of the enforcement of Google’s content policies across all its platforms or assesses the risks to the Company posed by the identified content management controversies. Accordingly, we do not believe that the Company may omit the Proposal from its proxy materials in reliance on rule 14a-8(i)(10). Sincerely, Courtney Haseley Special Counsel DIVISION OF CORPORATION FINANCE INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS The Division of Corporation Finance believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division’s staff considers the information furnished to it by the company in support of its intention to exclude the proposal from the company’s proxy materials, as well as any information furnished by the proponent or the proponent’s representative. Although Rule 14a-8(k) does not require any communications from shareholders to the Commission’s staff, the staff will always consider information concerning alleged violations of the statutes and rules administered by the Commission, including arguments as to whether or not activities proposed to be taken would violate the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff’s informal procedures and proxy review into a formal or adversarial procedure. It is important to note that the staff’s no-action responses to Rule 14a-8(j) submissions reflect only informal views. The determinations reached in these no-action letters do not and cannot adjudicate the merits of a company’s position with respect to the proposal. Only a court such as a U.S. District Court can decide whether a company is obligated to include shareholder proposals in its proxy materials. Accordingly, a discretionary determination not to recommend or take Commission enforcement action does not preclude a proponent, or any shareholder of a company, from pursuing any rights he or she may have against the company in court, should the company’s management omit the proposal from the company’s proxy materials. SANFORD J. LEWIS, ATTORNEY Via electronic mail April 1, 2019 Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Re: Shareholder Proposal to Alphabet on Behalf of The New York State Common Retirement Fund and Others – Supplemental Reply Ladies and Gentlemen: The New York State Common Retirement Fund (the “Proponent”) is beneficial owner of common stock of Alphabet Inc. (the “Company”) and has submitted a shareholder proposal (the “Proposal”) to the Company together with co-lead-filer Natasha Lamb, of Arjuna Capital, on behalf of Lisa Stephanie Myrkalo and Andrea Louise Dixon. We previously responded to the Company’s February 5, 2019 no action request on March 11, 2019. I have been asked by the Proponent to respond to the Company’s supplemental letter dated March 25, 2019 (“Company Letter”) sent to the Securities and Exchange Commission by Pamela L. Marcogliese, of Cleary Gottlieb Steen & Hamilton LLP. A copy of this Supplemental Reply is being emailed concurrently to Ms. Marcogliese. The record submitted by the Company and in our prior correspondence demonstrates that, regardless of whether email service of the Proposal was misdirected, the Company had received a hard copy of the amended Proposal on a timely basis, from both the Proponent and the co-lead- filer. The vagueness arguments made in the Company Letter are of little weight or merit. The terms hate speech, freedom of expression, content management, content policies, etc. are all clear in the context used. Google has itself defined hate speech, free expression, deceptive behavior, etc. in its postings online. The Proposal requests a report to shareholders reviewing the efficacy of the Company’s enforcement of Google’s terms of service related to content policies and assessing the risks posed by content management controversies related to election interference, freedom of expression, and the spread of hate speech, to the company’s finances, operations, and reputation. Reading the Proposal in its entirety the language is clear and would not be difficult for board, management or shareholders to understand. The Company Letter also attempts to demonstrate that the Company has substantially ______________________________________________________________________________ PO Box 231 Amherst, MA 01004-0231 • [email protected] • (413) 549-7333 Office of Chief Counsel April 1, 2019 Page 2 implemented the Proposal. However, the Company’s existing reporting meets neither the essential purpose nor the guidelines of the Proposal. Missing is an assessment of the efficacy of implementation of policies to control and prevent hate speech and protect free expression. While the Company Letter points to helpful published information on methods used for attempting to intercept hate speech and misinformation, the reported actions by which the Company notes it is “beginning to” address various issues do not provide an assessment of the efficacy of those actions. Raw statistics on removals of postings and videos are not, by themselves, a dispositive indicator of efficacy. Assessing the timing and impact of removals may be more relevant to efficacy. The recent events surrounding the Christchurch mosque shooting in which hate speech was rapidly disseminated through internet channels (including Google’s own YouTube) demonstrate the urgency of understanding whether and how the Company has the capacity to effectively intercept inappropriate speech. Moreover, some removals may raise issues relating to freedom of speech. Detailing how many videos have been taken down or comment opportunities foreclosed on an incidental basis does not adequately assess risks to freedom of expression posed by content management controversies. An assessment of the efficacy of enforcement of the terms of service related to content management controversies on election interference, freedom of expression and hate speech requires, at a minimum, an examination of the scope of the problem and whether existing tools used by the company are an effective means of control. The Company’s reported actions fall far short of providing an assessment of the efficacy of current efforts and resulting vulnerabilities “assessing the risks posed by content management controversies related to election interference, freedom of expression, and the spread of hate speech, to the company’s finances, operations, and reputation.” Accordingly, we believe there is no basis for the Company’s claims that the Proposal is excludable pursuant to Rule 14a-8 and we urge the Staff to notify the Company that its request for a no action letter is denied. Sincerely, Sanford Lewis Cc: Pamela L. Marcogliese D: +1 (212) 225 2556 [email protected] MARCH 25, 2019 VIA E-MAIL ([email protected]) U.S. Securities and Exchange Commission Division