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The US and EU Continue Clashes Over Big Tech Business Practices

Published by IDSA on

European leaders appear to be standing firm against threats of retaliatory tariffs from Donald Trump, over plans to impose new taxes targeting US tech giants such as Facebook, Google, and Amazon.

Since 2017, the EU has been involved in three antitrust investigations involving Google for violating the Union’s competition laws. Following the third and final case in March 2019, the EU fined the company 1.5billion euros for the imposition of anticompetitive contractual restrictions in regards to third-party companies use of their search engine. This third (but likely not last) fine brings Google’s outstanding total to a whopping 8.2 billion euros. Donald Trump had heavy criticisms towards the EU, specifically to antitrust watchdog and EU Commission member Margrethe Vestager claiming “She hates the United States perhaps worse than any person I’ve ever met…”

Last month, prominent European politicians have continued their crack-down on the American tech companies, with a 3% tax plan introduced by French Finance Minister Bruno Le Maire targeting the income revenue of tech firms. Italy also announced a similar tax of 3% on all internet transactions, as well as the UK with an imposition of a 2% tax on the revenues of search engines. All parties have agreed, however, that the issue of monopolization in the digital sector must be tackled globally – with Italian Finance Minister underlining that such levies are operating strictly with a “sunset clause”, implying that said measures are only until the OECD can come up with more permanent solutions.

Despite President Trump’s hardline approach to punishing American allies for the wariness of American tech giants, the taxes and fines imposed by the EU have been postponed until at least the end of 2020 – after an agreement by the US to suspend sanctions to France. His rhetoric, however, has not changed. Mr. Trump is still toying with the idea of taxing European goods such as fine wine and automobiles, despite the opening of a new inquiry by the IRS against Facebook regarding their shift in profits to offshore companies in Ireland. This case, set to last about three to four weeks, could see Facebook being hit with a federal tax liability up to 9 billion USD, accentuating the malpractices and negligence of these firms on a global scale.

-Kalman Gyecsek-


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