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> Starbucks, Apple, Amazon, McDonald's...do you notice a pattern? The suggestion that the Commission is not targeting big US companies is comical, as is their i
by rbehrends 9y ago
> Starbucks, Apple, Amazon, McDonald's...do you notice a pattern? The suggestion that the Commission is not targeting big US companies is comical, as is their interpretation of both tax law and illegal state aid.
If you selectively only pick the cases against US companies because that's what you hear about in the US media, but ignore the cases against EU companies, then I can see how you can get that impression. But it's not really the full picture.
More importantly, and regardless of what you think of the merits, the EU is not the beneficiary, since those tax breaks are to be paid to the respective member state. The benefit for the EU – one way or another – is a more competitive environment, not the money it does not even get. So, "plundered" is an inaccurate term either way.
And you hear a lot about big US companies, because (1) smaller US companies are less likely to operate in the EU and (2) US antitrust law has been watered down since the late 1970s (starting with Bork's "Antitrust Paradox"), leading to a concentration of corporate power that's simply not present in Europe [1]. As a result, antitrust cases against EU companies tend to be more about collusion, while antitrust cases against US companies in the EU tend to be more about abuse of a dominant market position.
[1] See, for example, OECD self-employment rates and how America is near the bottom: https://data.oecd.org/emp/self-employment-rate.htm https://data.oecd.org/emp/self-employment-rate.htm
- asr 9y agoDo you have any idea of a good data source showing the total amount of state aid fines imposed by the EC? One source I've found [0] suggests that total state aid fines by the Commission from 2005-2015 were somewhere on the order of 2.5 billion euro, which is dwarfed by the 13-15 billion euro fine Apple is facing. But I may be misreading the report I found/missing some better data. [0] rlegutko.pl/download/en-nieuczciwa-konkurencja-polityka-insight-270320171.pdf, see Chart 8 on page 18.
- rbehrends 9y agoThere is no such thing as a fine for state aid. Member states are required to recover illegal state aid from the beneficiaries, with interest. Recovery of state aid is uncommon, since most governments simply seek approval for exemptions beforehand (such as the UK for Hinkley Point) and so there are relatively few large incidents of illegal state aid. Especially as it's rare for a government to throw that much money at a single company without great need, illegal or not.
- asr 9y agoThanks, that's helpful. Although, from your answer I take it that U.S. companies are, in fact, the major subjects of these high-profile EC enforcement actions and there are not actions of similar magnitude against EU companies that I've missed. (That could be entirely just and appropriate, of course.)
- rbehrends 9y agoIt's mostly Apple that's an outlier here, with €13 billion owed (contingent upon the ECJ not overturning that), and that's over a period of 12 years. Amazon has to pay back €250 million, which is a pittance compared to their annual EU revenue of over €20 billion, and that was originally triggered by the LuxLeaks revelations, which are also hitting (say) IKEA, which is reportedly being investigated for over €1 billions in illegal tax breaks [1]. One interesting aspect of the Apple case is that the American federal government may not actually mind Apple getting slapped around a bit; Apple not repatriating its foreign profits has been an issue for quite some time, and that only works out for Apple because Apple can park those in tax havens abroad. [1] http://www.reuters.com/article/us-eu-ikea-taxavoidance/eu-regulators-to-examine-lawmakers-report-on-ikea-taxes-idUSKCN0VO19C http://www.reuters.com/article/us-eu-ikea-taxavoidance/eu-re...
- Oletros 9y agoNo, all states have been found guilty of those ilegal aids, but they were not so high as Apple in Ireland