One CEO’s anti-American “political crap” is another regulator’s equal-opportunity enforcement.
Margrethe Vestager, the European Union’s Competition Commissioner, defended a massive tax ruling against Apple Tuesday, swatting away criticism that EU actions against US companies are politically motivated.
“I must admit I know that it is tempting and I register the feelings and the concerns too, but there are no numbers to back up any kind of bias,” Vestager said during an antitrust conference at the Georgetown University Law Center. “We make sure that the market works no matter the ownership, private or public, the size, or the nationalities of the companies.”
Last month the executive arm of the EU ordered the Irish government to collect $14.5 billion in unpaid taxes from Apple. Following a two year investigation, European officials concluded that Apple had received undue tax benefits not offered to other companies, a sweetheart deal it had determined to be illegal under European law. “We have rules to stop governments from giving out favors to a handful of companies at the expense of everyone else,” Vestager said.
Soon after the ruling was made public, Apple CEO Tim Cook slammed the decision as “political crap.” Cook rejected the figures used to generate the dollar amount owed and cited anti-American bias as one reason behind the adverse decision. “[W]hat I feel strongly about is that this decision was politically based, of that I’m very confident. There is no reason for it in fact or in law,” he told the Irish Independent. Apple and Ireland plan to appeal the decision.
In her remarks at Georgetown, Vestager defended the EU’s record as a neutral enforcer of antitrust rules. She said that in the past 15 years, the EU has brought about 150 illegal state aid decisions, but only a fraction of them were made against US companies. “I know that you do not have this concept in the states, that it’s a common thing for companies to negotiate their tax regime in the state that they locate, this is the difference of opinions of looking at what is fair and reasonable,” she said. “But when we are in Europe we have European rules and everyone is to play by European rules.”
Like Cook, government officials and lawmakers in the US have not been persuaded by Vestager’s assurances. The Treasury Department said the decision against Apple could threaten the “important economic partnership between the US and the EU.” The agency has also raised criticism of ongoing investigations into other American companies operating in Europe, including Amazon and Starbucks.
And after meeting with Vestager on Monday, Sen. Orrin Hatch, the chair of the Senate Finance Committee described the European ruling as running “roughshod over an American firm,” in a statement sent to BuzzFeed News. “Though our meetings were cordial, the Commissioner failed to build an effective case for this highly politicized ruling rooted in an erroneous interpretation of law, underscoring the need for additional action in international courts.”