The EU’s top competition official vowed Thursday to fight on to make big companies pay more tax, after Brussels suffered a major legal defeat in a long-running tussle with Apple.
In a sign that the EU was not dissuaded from its scrutiny of big tech, Margrethe Vestager, the EU’s competition commissioner, also announced a wide-ranging look into possible antitrust violations by connected gadgets like Apple’s Siri or Amazon’s Alexa.
The former Danish minister said the struggle against profit-shifting was a “marathon… on hilly ground” after the EU’s second highest court threw out a landmark 2016 EU order that Apple pay Ireland 13 billion euros ($15 billion) in back taxes.
She said the European Commission, the EU’s executive branch, would analyse the judgement before deciding whether to take the case to the European Court of Justice, but vowed to keep pushing for companies to pay “their fair share of tax”.
“One thing is clear — the fight against aggressive tax planning is a marathon. This is not a sprint. And this marathon, well, it does take place on very hilly ground,” Vestager told reporters in Brussels.
Ireland was accused of allowing the iPhone-maker to park revenue earned in Europe, Africa, the Middle East and India, sparing it almost any tax.
Brussels said this gave Apple an advantage over other companies, allowing it to avoid Irish taxes between 2003 and 2014 totalling around 13 billion euros, and argued it amounted to illegal “state aid” by Ireland.
But the EU’s Luxembourg-based general court said the commission “did not succeed in showing the requisite legal standard that there was an advantage”.
– ‘Tipping point’ –
Vestager said that the coronavirus crisis meant public funds raised through taxation were more important than ever before.
“Our state aid enforcement work continues. If member states give certain multinational companies, tax advantages not available to their rivals, this harms fair competition in the European Union,” she said.
“The goal is very simple: to ensure that all companies pay their fair share of tax. We need to put in place the right legislation to address loopholes to ensure transparency.”
The EU is trying to come up with ways to recover more in taxes from digital giants where they do business, though this has been opposed by some European capitals.
Talks to come up with a new global tax system at the OECD have stalled due to opposition by the US.
Vestager made her comments as she announced that the EU would seek advice from hundreds of companies over whether voice assistants and other gadgets run by big giants pose a challenge to fair business.
The commissioner said she was concerned about the dominance of companies such as Amazon, Apple and Google in “Internet of Things” devices, which is understood to be the next major market for technology.
“The trouble is that competition in digital markets can be fragile,” she said.
“When big companies abuse their power, they can very quickly push markets beyond the tipping point, where competition turns to monopoly,” she warned.
Similar enquiries into other sectors have resulted in thorough investigations over monopolistic practices and led to big fines.