Apple will launch a legal challenge in the world’s biggest tax case this week, trying to rein in the European Union’s antitrust chief ahead of a potential new crackdown on internet giants.
EU Competition Commissioner Margrethe Vestager said in a 2016 ruling that Apple’s tax deals with Ireland allowed the company to pay far less than other businesses. The EU General Court in Luxembourg must now weigh whether regulators were right to levy a record 13 billion-euro ($14.4 billion) tax bill.
Apple's legal challenge in 2016 claimed the EU wrongly targeted profits that should be taxed in the U.S. and “retroactively changed the rules” on how global authorities calculate what’s owed to them.
President Donald Trump has also said that Vestager “hates the United States” because “she’s suing all our companies.”
Ireland said it “profoundly” disagreed with the EU’s findings.
Last week, Apple's market valuation hit $1.02 trillion as a result of the company's new aggressive pricing strategy. The company’s huge revenue have attracted close scrutiny in Europe, focusing on complicated company structures for transferring profits.
The court ruling, likely to take months, will be a guide for Vestager’s tax probes, which also include fiscal deals done by Amazon.com Inc. and Alphabet Inc.
Vestager has also fined Google some $9 billion. She’s ordered Amazon to pay 250 million euros back taxes.
The European Union plans to introduce a 'web tax' on digital services by 2020.
“My first task will be to see whether it is possible to introduce a web tax at the OECD/G20 level, that is to say at a global level, because that would be the most effective solution,” the Commissioner-designate for Economic Affairs Paolo Gentiloni told daily La Stampa in an interview on Monday.
“The Commission will seek to reach an accord by 2020 but if that’s not possible my mission will be to propose a European web tax ... we’re not prepared to wait,” he added.
Potential Data Rules
On Friday, the European Union’s antitrust chief also called for more rules to rein in how companies collect and use information, offering the first clues into how she may use new powers to target big technology firms.
In a speach at the CCBE Standing Committee, Copenhagen, 13 September 2019, said that the EU’s data-protection legislation doesn’t cover how data can be used “to draw conclusions about me or to undermine democracy.” “When a few companies control a lot of data about us, that can also help them influence the choices we make.”
Europe “may also need broader rules to make sure that the way companies collect and use data doesn’t harm the fundamental values of our society,” she said.
Vestager is investigating how Amazon.com may handle data on rival sellers on its marketplace. And her team has been asking questions about how Facebook Inc. deals with apps and its planned new cryptocurrency Libra.
Regulators will be keeping “a close eye” on how Internet platforms use their power “as both player and referee” when they host other companies that they also compete against, she said. A 2.4 billion-euro fine on Google for undermining shopping search rivals “isn’t a one-off,” she said, citing an early-stage probe into whether Google used its search platform to help its job search business, Google for Jobs.