The EU antitrust regulator that instigated the investigation into Apple’s tax arrangements with the Irish government, resulting in a ruling that the Cupertino firm must pay €13B ($14.4B) in back taxes says she isn’t finished investigating into Apple-related concerns.
Margrethe Vestager told The New York Times that she is also working on policies to make companies pay more taxes in Europe and investigating how the companies use data to “box out” competitors.
Apple had routed almost all of its European profits through Ireland, where they had a “sweetheart deal” with the government allowing them to pay an extremely low tax rate. While the investigation resulted in a ruling that the deal was illegal, both Ireland and Apple have appealed. A ruling on the appeal is expected to take several months, and even then it won’t be over, as the losing side is expected to make an appeal to the European Court of Justice.
While the previous investigation addressed only the rate of the tax Apple paid in Ireland, Vestager is questioning whether the channeling of profits through Ireland is legal in the first place. Ireland has extremely low corporate tax rates, even other than the deal with Apple, giving the iPhone maker what she says is an “unfair advantage” over companies that pay higher taxes in the countries in which they are based.
She is also targeting the App Store:
She remains focused on whether the largest technology companies squeezed out businesses that rely on them to reach customers. Amazon is under investigation for mistreating third-party sellers that offer products similar to what it sells. Apple is being questioned over accusations that it uses the App Store to harm rivals such as Spotify.
“Some of these platforms, they have the role both as player and referee, and how can that be fair?” she asked. “You would never accept a football match where the one team was also being the referee.”
In the above example, Spotify has filed a formal complaint in Europe, alleging that Apple was giving itself an “unfair advantage at every turn,” as Apple not only sells subscriptions to its own Apple Music service, it sets the in-app subscription rules for competitors like Spotify.
While Europe and the United States have in the past had different attitudes on the subject of business regulation, Vestager sees this as changing:
“Market forces are more than welcome, but we do not leave it to market forces to have the final say,” she said. “Markets are not perfect” […]
If anything, American authorities are coming around to share her tech skepticism. Federal, state and congressional investigators are scrutinizing the tech industry over unfair business practices. Ms. Vestager said she saw opportunities to collaborate, but was waiting to see how the inquiries unfolded.
“Obviously it’s very interesting to see what will come of it,” she said.