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Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 t
by elAhmo 2y ago
Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 trillion is around 0.4% of their cap.
Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours.
- darby_nine 2y agoWhy would you compare to market cap? The company is going to sink or swim regardless of what the market pegs it at.
- tbrownaw 2y agoIt provides an excuse to believe the this is an example of the government not taking bad behavior by corporations seriously.
- randmeerkat 2y ago> Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours. Up until recent years the EU didn’t even know if it could take action against U.S. based tech giants. Now that the EU has established wins in fines, usb-c, user replaceable batteries, and alternate app stores, I expect EU regulators to take even bolder action.
- sgu999 2y ago> Up until recent years the EU didn’t even know if it could take action against U.S. based tech giants. What do you mean by that? Due to geopolitics? Or at a technical level of the current law?
- randmeerkat 2y ago> What do you mean by that? Due to geopolitics? Or at a technical level of the current law? Geopolitics, but the technical level of law certainly plays a part. Europe had no idea what the effect of leveling lawsuits against a fortune one company would yield. However the EU has proven rather adept at identifying technological practices harming consumers and a strong capacity for rectifying them. Now that the EU is beginning to find its stride, I expect it to become more assertive in how international commerce is conducted.
- pembrook 2y agoMarket cap is the theoretical value of all the company’s future growth/cash flows brought forward to today. It’s speculative, and fluctuates with the stock price. Tax bills have to be paid in cash, not stock. A better analogy is to simply look at Apple’s net profits, since that’s where the money will come from. $13B is not nothing, even for Apple.
- darby_nine 2y agoNote we also accept stock too if companies want to fork that over instead
- oblio 2y agoIt is nothing. Apple's profits over the period mentioned were probably hundreds of billions.
- Already__Taken 2y agotop ai result just said apple has 47 billion cash so 27% sounds like quite a fine.
- Supernaut 2y agoRead it again. The court has not imposed a fine. The €13 billion represents taxation on many years of corporate profits, that the EU's competition authority asserted Apple should have paid to the Irish exchequer, but did not due to a favourable taxation agreement dating back to 1991.
- igravious 2y agoApple didn't break the law, Ireland did.
- dtech 2y agothey both did, as they made a deal that was illegal under EU law. I assume it's similar to a US state and corporation therein both falling under federal law.
- whiterknight 2y agoThat’s ascribing a lot of power to the EU which I don’t think is politically cut and dry and certainly not a result of elections.
- igravious 2y ago13bn is not meaningless for Ireland – that'd fund several major infrastructure projects – stuff the Irish people missed out because of these illegal tax shenanigans.
- e4325f 2y agoApple would have gone elsewhere if the scheme didn't exist, so it's not accurate to say Ireland has missed out on 13bn.
- igravious 2y ago“The most recent projections for the final cost of Metrolink set a maximum outlay of €12.25billion, excluding VAT, though the rail link is not expected to go live before the middle of the next decade at the earliest.”[1] 13bn would cover the cost of Dublin's first metro system, unlike most European capitals Dublin does not have a metro. This is what this ruling means for the Irish public. shame on the government putting corporate interests ahead of public finances. [1] https://www.irishexaminer.com/news/arid-41386906.html https://www.irishexaminer.com/news/arid-41386906.html
- piltdownman 2y agoIrish Corporation tax receipts for 2023 alone were valued at €23.8 billion. The ruling was for the benefit of the Irish public to indicate our willingness as a good faith and hospitable host for American MNCs now and in the future. Given the propensity for the EU to throw us under the bus when the Teutonic books don't balance, its a lot more important for us to maintain our special cultural, economical and political relationship with the USA. In any case, that money would never end up ringfenced for a Metro that has been in planning hell since the 80s. We're well able to afford white elephants (e.g. the new Children's Hospital).
- e4325f 2y agoThis take makes no sense. The whole reason the 13bn exists is because of the tax arrangement. Apple would have gone elsewhere if not for that.
- hyperpape 2y agoNote that in the case of Apple, the fine is proportional to the benefit Apple gained from Ireland. So if the fine is meaningless, then so was the original value of the ill-gotten gains. (This is in addition to the other commentators, who have correctly pointed out that if you just divide market cap by the fine, you're producing a number that isn't useful for anything but misleading people).
- whiterknight 2y ago> ill-gotten gains We are assigning moral value to this? You don’t think EU is a self interested party looking to interpret the law as favorably as they can?
- astaunton 2y agoJust to clarify, the money has already been deposited to a holding account awaiting this ruling. So Apple will not be paying over any money, they will not be getting the money refunded to them.
- stoobs 2y agoYeah, I think the only impact on Apple now is that they finally have to write it into the financial reporting and close the book on it, which means that this quarter has a slightly higher than normal taxation rate? Might give a slight wobble in the stock price, but that's nothing unusual for AAPL at this time of year anyway.
- deleted 2y ago[deleted]
- interludead 2y agoBig tech companies can absorb these penalties without a major dent in their finances, and as you pointed out, sometimes the market value can rebound quickly, negating the effect of the fine.
- timomaxgalvin 2y agoIt's not a fine is it? They are just paying what they should have.
- Nemo_bis 2y agoThis goes to reduce Ireland's public debt, which was about 140 billion euros as of 2022. 10 % debt reduction overnight (albeit accrued over 20 years) is no small impact for a country. https://fred.stlouisfed.org/series/TDSAMRIAOGGIE https://fred.stlouisfed.org/series/TDSAMRIAOGGIE
- tansan 2y agoMarket caps aren't cash. It's an odd comparison and is dishonest to minimize the payment through a speculative value that the market decided on. If Apple owned 50% of the shares and sold all their shares today, they would not be getting 50% of that $3T because of market forces.