By Amir Mizroch, Lisa Fleisher and Sam Schechner
Despite a regulatory crackdown that threatens to curb their
growth in Europe, U.S. tech giants are doubling down on their
operations on the continent.
Google Inc., Apple Inc. and Amazon Inc. have all built or
planned massive new data centers in Europe. Uber Technologies Inc.
and Facebook Inc. have opened engineering centers. And top
executives from the companies have gone on publicity campaigns in
cities across the continent to highlight their companies' roles in
local economies.
The activity comes against a backdrop of increasing scrutiny
from European regulators, who are looking into whether some of the
U.S. companies pay enough taxes, abuse their dominant market
positions, and protect European's privacy rights. Europe's
antitrust regulator has decided to file formal charges against
Google for violating the bloc's antitrust laws, a person familiar
with the matter said Tuesday.
"I don't believe the increased regulatory and political scrutiny
of tech giants will deter them from continuing to invest and expand
in Europe," said Tudor Aw, a partner and technology sector head at
KPMG.
Apple and Google have been especially outspoken in showcasing
their contributions. In February, chief executive Tim Cook visited
Seele, the German manufacturer that makes the facade glass for its
stores and its new office campus in Cupertino, Calif.
Apple also keeps an updated tally online of its economic impact
in Europe: 18,300 people directly employed in Europe, including
11,800 workers in 107 retail stores; and 671,500 jobs in Europe
created or "supported" by Apple. Most of those jobs--530,000--are
linked to the iOS app store, such as developers who work on apps,
and have been created since 2008, Apple says.
Matt Brittin, Google's EMEA chief, has been on a European
roadshow over the past several months, talking about how Google is
helping small businesses grow through Google AdWords, Google Play
and YouTube. His examples include how Google helped an Italian
furniture maker and a German cactus farmer find new customers.
Mr. Brittin has committed the company to training one million
Europeans to learn digital skills by 2016, adding that Google would
invest an additional EUR25 million ($26.3 million) to broaden its
current programs and take them to new markets across Europe. The
company has spent more than $2.1 billion on data centers. It is
expanding the size of its data center in Belgium and building one
in The Netherlands that should come online in the first quarter of
2016. It also has data centers in Finland and Ireland.
The company continues to expand its sites and invest heavily in
its data centers across Europe, a person familiar with the matter
said. The investment in The Netherlands data center comes to EUR600
million. In Belgium it's EUR550 million. In Finland, it's EUR800
million, and Ireland is EUR75 million.
Apple said in February that it would spend nearly $2 billion to
build its first two data centers in Europe. The centers, each
covering 166,000 square meters, will be built in Denmark and
Ireland, the latter serving as Apple's European headquarters. The
data centers will go online in 2017, the company said, and would
run entirely on renewable energy and create hundreds of local
jobs.
The company's message over the past year has sharpened around
its economic benefit to Europe, as scrutiny from European lawmakers
heats up, particularly over the question of whether Apple pays
enough taxes.
EU regulators have said they believe Apple's tax arrangements
with Ireland were illegal. Apple has said it received no selective
treatment from Irish officials and was subject to the same tax laws
as other companies that do business in Ireland.
Amazon.com Inc. has also been investing heavily in Europe,
despite being the subject of a tax battle in France and an
investigation from the European Union into whether its tax
arrangements in Luxembourg constitute illegal state
aid--allegations the company denies.
Last fall, the company opened its data center in Frankfurt, its
first major data center in continental Europe, in part to show it
complies with strict German data-privacy laws. It has also opened
three new logistics hubs in Poland, and signed a lease to move into
a 15-storey tower in London with a capacity for 5,000
employees.
At the same time, the company says it increased its permanent
staffing in Europe by nearly a quarter in 2014, to 32,000
employees--not including seasonal workers.
"Even with all of this hiring, we remain in a phase of heavy
investment and have many positions available which we look forward
to filling in 2015," said Xavier Garambois, head of Amazon's EU
retail business.
Facebook has offices in 10 countries in Europe, including
Ireland, its European headquarters, and recently expanded in London
and Hamburg. A Facebook-funded study published in January by
Deloitte said the company was linked to $51 billion in economic
activity in Europe in 2014 and supported 783,000 jobs.
Access Investor Kit for Amazon.com, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0231351067
Access Investor Kit for Apple, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0378331005
Access Investor Kit for Google, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P5089
Access Investor Kit for Google, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P7069
Subscribe to WSJ: http://online.wsj.com?mod=djnwires