Apple Facing European Commission's Tax Ruling Without a Lobbying Presence in Brussels

Following the European Commission's ruling that Apple must pay 13 billion euros ($14.5 billion) in back taxes because of its "undue tax benefits" in Ireland, The Wall Street Journal reported over the weekend that Apple is facing the EC "without the army of lobbyists and public relations campaigners typical in such fights."

The company's lack of a lobbying presence in Europe isn't new, however, as it spent less than €900,000 lobbying European institutions in 2015. According to public filings, in total Apple "doesn't employ any full-time lobbyists" in Brussels, and only five people work part-time. In contrast, Google spent "at least" €4.25 million in 2015, and employs more than ten people in lobbying positions in the European capital.

Apple's retail location in Brussels
Sources familiar with the matter stated that Apple's "lack of a presence in the EU capital" led to it being unsuccessful in gathering information over the past few years about the impending tax evasion ruling from the European Commission. Still, a source close to the commission's competition office theorized that a heavier lobbying presence might not have been all that helpful for Apple in the end, since the lobbying tactics of a company like Google have not gotten it out of "many antitrust investigations" over the past few years.

Google’s experience with the commission’s many antitrust investigations over the years may suggest a bigger Apple lobbying presence in Brussels wouldn’t have had a meaningful impact on the regulator’s decision.

People familiar with the directorate say there is limited leeway for influencing the outcome of any competition investigation. The regulator can’t stray too far from previous case law in its decisions to ensure the ruling is upheld in court when the companies inevitably appeal it.

Still, “I don’t know what [Apple] would have done differently,” said a person close to the commission’s competition office. “It’s not a question of behavior; it’s a question of what’s in the numbers and what’s on the table.”

Many other America-based companies have a large presence in Europe, including Alphabet and Amazon, "which have built a European lobbying presence to try to sway investigations and potential legislation." The two companies have also tried to advertise the benefits that Europe gains from their presence, with Google launching a digital journalism initiative and Amazon highlighting its storefronts that facilitate the livelihood of small European businesses.

On the Apple side of things, Tim Cook has called the EC's ruling "total political crap" and described the lower end 0.005% tax rate as a "false number." Ultimately, the Apple CEO believes that the decision will be reversed, and most recently Ireland's coalition government agreed to appeal the ruling. Cook has stated that he has "faith in humanity" and "faith in what is just and right will occur."

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