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

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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.

brussels_hero

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."

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

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48 months ago
I have a large investment in Apple shares so I'm clearly disappointed with any news that adversely affects Apple.

However as a European I am dismayed at the way that Luxembourg, Netherlands and Ireland have cheated their fellow EU members by offering low tax regimes. These have encouraged US companies such as Apple, HP, Dell, Starbucks, eBay, Amazon, Google (and the list goes on and on) to dishonestly book their sales not in the country where they were made, but in the low-tax haven.

The UK has lost billions in lost tax over the last decade or more.

A sign in a local independent bookstore proudly states that it has paid more tax in the UK than the whole of Amazon.
Score: 12 Votes (Like | Disagree)
Avatar
48 months ago
Come over to the UK, we're getting out of this EU mess.
Score: 7 Votes (Like | Disagree)
Avatar
48 months ago

Why is Ireland (and Apple) being punished for such an arrangement?

Because it is clearly stated in the EU common rules, and Ireland has agreed to follow them. Rules that state for example that giving any enterprise a special tax regime is illegal state aid. Ireland is abusing the system and driving profits from other states. You cannot join to 500 million people common market without rules.
Score: 6 Votes (Like | Disagree)
Avatar
48 months ago
Lobbying? Just pay your taxes!

I love Apple but their shady tax dealings are shady tax dealings.

Exxon previously the most profitable company world wide has incredibly shady tax dealings and even gets subsidies from the US via lobbyists.
Legal?
Yeah!
Because of lobbyists?
Yeah!
Shady corrupt politicians?
Hell yeah!!

Does that make it right?
**** no!
Score: 5 Votes (Like | Disagree)
Avatar
48 months ago

I would like to avoid using them all. The government enforced monopoly makes that difficult. People should pay for things that they use. Not have their money stolen and reappropriated by a government who thinks they know how to spend money better. They don't.
[doublepost=1474923602][/doublepost]

Private markets.

^

I'd hate to live in your world.. if you can't afford it, you don't get educated, die prematurely etc, where absolutely everything is about profits.

Fortunately.. there's "society" where we all contribute - to schools, healthcare, infrastructure and the rest for the benefits of everyone.
Score: 5 Votes (Like | Disagree)
Avatar
48 months ago

I don't see how what happened in Ireland is any different from what legally happens all the time in the US. For instance, I live in a town that wanted to bring in a Target distribution facility. Target is worth billions, but in order to get them to choose our town, the Mayor and City Council offered Target a 20-year tax abatement. So a corporation with billions to spend wouldn't have to pay any taxes to the town for the first decade, and then pay minimal taxes for the next ten years. Meanwhile, property taxes for residents continued to increase. (Target eventually decided not to build there.) This seems to be a common practice with big businesses. In order to attract them, cities hold a carrot in the form of lower taxes. Why is Ireland (and Apple) being punished for such an arrangement?

1. When you steal something and have to return it, that is not punishment. Apple or Ireland has not been fined yet. Having to pay taxes owed is not punishment.

2. What is legal in the States might not be legal in the EU.
Score: 5 Votes (Like | Disagree)

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