EU Looks to Rein In Alleged Excesses of US Tech Giants
August 31 2016 - 1:18PM
Dow Jones News
By Sam Schechner
PARIS--Apple's tax bill is just the beginning.
The European Union's decision Tuesday that Apple Inc. owes
roughly EUR13 billion ($14.5 billion) in what it calls uncollected
taxes over a decade, represents a new high-water mark in the bloc's
efforts to rein in alleged excesses of American tech giants.
But it is also just the first shot in what is expected to be a
busy autumn for European officials, who are pushing forward a raft
of regulations and investigations aimed at altering the behavior of
a cadre of U.S.-based internet superpowers. The moves are being
taken by a host of players--from EU regulators in Brussels to a
bevy of national authorities across the continent. They are
targeting areas ranging from personal privacy to anti-competition
issues.
In coming weeks, EU bodies plan to debate new telecom rules that
could expand to cover services like WhatsApp, proposed legislation
to push news aggregators to pay newspapers for showing snippets of
content, and potential audiovisual rules that would force companies
like Netflix Inc. to finance European movies.
At the same time, authorities in capitals like Brussels, Paris
and Berlin are pursuing investigations involving big companies like
Alphabet Inc.'s Google, Amazon.com Inc. and Facebook Inc., related
to alleged tax avoidance, anticompetitive behavior and privacy
concerns.
"It's an avalanche coming," said James Waterworth, vice
president for Europe at the U.S.-based Computer &
Communications Industry Association, a lobby group that represents
Amazon, Facebook, Google and Netflix. "There's a political sense
from some camps that these big, extraterritorial companies are
getting away with things that need to be addressed."
Such lobby firms argue that tech companies bring economic
benefits, promote innovation and boost competition. They have been
gearing themselves up in Brussels and across Europe to influence
the rule-making.
Mr. Waterworth says the specific complaints against U.S. tech
firms don't stand up to scrutiny. The companies themselves have all
launched vigorous defenses, underscored by Apple's response Tuesday
to the EU's tax clawback decision. Apple executives denied
vigorously they had avoided paying taxes and condemned Brussels'
decision as a money grab.
The proposals and investigations are the latest broadsides
against big tech firms that some European politicians and consumer
advocates argue squelch competition and take advantage of consumers
dependent on their services. European officials reject the idea
that their enforcement actions, or new rules, are motivated by the
nationality of their targets, saying that their goal is to make
sure European markets remain open to competitors with fair
protections for consumers.
But some U.S. tech executives still say they think they are
being singled out.
"More and more of these battles manifest themselves as the
disrupters meet the disrupted," said John Higgins, head of Digital
Europe, a Brussels-based lobby group representing companies
including Google and Apple.
Privacy is a particularly intense battlefield. Less than a year
after voting in strict new privacy law, the EU plans this autumn to
propose updates to its communications-privacy directive. The update
could potentially extend rules now covering phone companies--like
anonymizing location data once no longer needed for billing--to
online-communications providers.
At the national level, France's privacy watchdog is locked in a
fight with Google over how broadly the search engine must apply
Europe's "right to be forgotten." Several privacy regulators across
Europe say they are looking into WhatsApp's announcement that it
will start sharing some user data with parent-company Facebook
--just one of several probes the social network faces.
Competition law will also be a hot topic. Google is set as early
as next month to respond to the EU's formal charges that it has
abused the market power of its Android mobile operating system to
promote its own search engine and browser, one of several charges
it is fighting.
Other probes are ongoing: the EU is investigating Amazon's
conduct in the e-book business, and France's Autorite de la
Concurrence is investigating the online ad industry.
On the tax front, apart from Apple, the EU is looking at an
alleged sweetheart tax deal for Amazon in Luxembourg, a charge it
denies. And Google is facing tax probes in Spain, Italy and France
over claims--which it denies--that it should have declared more
profit and paid more taxes in those countries.
Write to Sam Schechner at sam.schechner@wsj.com
(END) Dow Jones Newswires
August 31, 2016 13:03 ET (17:03 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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