War for tech companies
2017 is proving to be a difficult year for US tech companies. They’re involved in disputes with the EU and are threatened by large fines. He limitation of their activities in the European territory
The 510 million residents of the EU of 28 Member States are a vital market for US tech multinationals. The European governments and the Commission’s supervisory authorities have targeted the practices of Silicon Valley companies. As well as some other US-based firms. Tax avoidance and the restriction of competition are largely controversial issues. Especially in Europe where citizens are often required to supply personal data if they wish to use a product.
Apple was ordered to pay €13 billion to the Irish government last year. Google faced accusations of unfair business practices and Uber hasn’t been banned in Europe yet. A lot of these American companies are denying that they did anything wrong while their workers are trying to fight for a living wage or complaining about management.
According to the New York Times, next year (2017) is going to be a huge one for business. We’ll be waiting for important decisions that will have big consequences. If US companies – and their well-known lawyers – lose these cases, they’ll need to find a new way of doing things in Europe.
Here is what is at stake for each of the tech companies:
Amazon
The e-commerce giant is awaiting the verdict of a long-running European investigation into whether it’s been receiving illegally preferential tax treatment in Luxembourg. They follow this up such as McDonald’s and Starbucks.
Amazon is starting to pay taxes in some European countries to improve their image with Europeans. They want to show that they are willing to invest and support the European market. Even if it’s not their biggest revenue generator.
Apple
The first issue for the company is the EU’s decision that calls for it to pay €13 billion in taxes. Ireland was the one who intervened, claiming that the European Commission exceeded their jurisdiction and that Apple did not
Appeals from both Apple and Ireland will finish being heard by the European Courts by the end of 2017. This case could take on a political dimension. US President-elect Donald Trump has called on US companies to bring their capital back to America in order to be taxed at a reduced rate. However, this may not go down well with Europ
France, Spain, Germany and the Netherlands are expected to make a decision this year on how they will track the use of its services. Services like visiting other websites through embedded “like” buttons. This is not the first time that Facebook’s policy needs approval – in a similar case in Belgium, the company had won.
They still have until the end of January to respond to the accusation that they misled Europe’s regulatory board for approving its $19 billion acquisition of WhatsApp.
In the last couple of months, there’s been a lot of discontent in the social media community stemming. People believe that Facebook isn’t doing enough to stop things like ‘fake news’ or content with inflammatory political content. There are rumours that Germany is going to make a new law that will force social networks to take the issue of hate speech more seriously. A German commission is due to present their report in March and it could be then when this legislation gets passed.
Uber
The company is facing a lot of resistance from European taxi drivers and governments. These folks think that it’s violating safety regulations and tearing down their industry while they’re at it.
Uber is currently being judged by the European Court of Justice and it’s not clear yet which status should apply. It’s possible this decision could have major consequences for Uber in the EU. If the company operates as a transport company, it will have to comply with European regulations governing the operation of taxis. Therefore, their prices will likely rise. However, if it is considered a digital platform, then they will just offer access to their supplier-app and be able to keep prices low.
Google is facing three charges from the EU for monopolizing certain search services and Android OS. The EU believes that Google has artificially promoted its own products at a cost to other companies.
The EU’s first verdict is expected in the spring and it may lead to a €7.5 billion fine against Google. The risk is that the company will appeal, delaying the final adjudication for years and running a “charm campaig in Europe.
On the flip side, France may decide to charge Google more than a billion euros in past taxes from their operations in France this year. Google expects to win the appeal. The French Data Protection Authority has called for the “right to be forgotten” globally, which means it would also have an effect in America – a decision Google disagrees with. The case will be heard next year.
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Author: PC-GR
