Thursday

17th Jan 2019

EU 'tax lady' hits Google with record fine

  • Margrethe Vestager has been called 'the woman Silicon Valley fears'. Donald Trump called her 'the tax lady' (Photo: European Commission)

She was dismissed by US president Donald Trump as the EU's "tax lady" who "hates the US", but Margrethe Vestager, the bloc's antitrust chief is not backing down amid rising tensions between the EU and the US.

Vestager, the EU's competition commissioner, announced on Wednesday (18 July) that the US tech company Google was to be fined a record €4.34bn for abusing its market dominance in mobile phone operating systems, and breaking EU antitrust rules.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • The commission accused Google of forcing smartphone manufacturers to pre-install Google search and Chrome (Photo: freestocks.org)

The move comes as Trump is increasingly hostile towards the EU - he called it a "foe" at the weekend - because of the bloc's tax and trade practices which he sees as hostile to American interests.

While Vestager's track record of putting pressure on US companies to play by EU rules also irked the previous Obama administration, Trump has elevated the frustration to a new level by telling Vestager's boss, EU Commission president Jean-Claude Juncker at a recent G7 summit that "your tax lady... she really hates the US".

The former Danish finance minister gave a characteristically spirited response on Wednesday.

"I've done my own fact-checking, and I do work with tax and I am a woman, so that is 100 percent correct. This is not correct for the latter part of the sentence though, because I very much like the US, I am from Denmark, that tends to be what we do, we like the US," Vestager told reporters.

"But the fact is this [the case] has nothing to do with how I feel, nothing whatsoever," she added.

No 'good time'

"There would never, ever, be a right timing," Vestager said dismissing that the possible political backlash would impact the EU's decision.

"The mission is very simple, we have to protect consumers and competition, to make sure that consumers get the best of fair competition … This is what we do, it has been done before, and we will continue to do it no matter the political context," she said.

The decision nevertheless could add to the rising transatlantic tension one week before Juncker travels to Washington to negotiate on trade imbalances with Trump.

A looming trade war is only one of the issues between the EU and the US that has emerged as problematic following the Trump administration withdrawal from key EU policy achievements - the Paris climate deal and the Iran nuclear agreement.

While Vestager is disliked by US presidents, she is widely respected by staff and colleagues.

She has been rumoured as a possible successor of Juncker in the next commission, although due to coming from a small social liberal party and not having served as a prime minister, that is an unlikely outcome.

Vestager, who said she would want to stay on as a competition commissioner, has already taken on US giants such as Amazon, Apple, Starbucks and MacDonalds since she took office in 2014.

She had ordered Apple to pay €13bn in back taxes to Ireland in 2016, earning her headlines calling her the 'woman Silicon Valley fears'.

90 days

Vestager said on Wednesday that Google has used its Android operating system "to cement its dominance as a search engine", preventing rivals from innovating and competing, adding that this is illegal under EU antitrust rules.

After a 39-month investigation, EU regulators found that Google forced manufacturers to install Google search and Chrome as the default search engine on Android devices in order to offer the Google Play store. They also found that it had prevented smartphone manufacturers from running competing systems, and gave financial incentives to manufacturers and mobile phone operators to pre-install Google Search.

The commission wants Google to bring its "illegal conduct to an end in an effective manner within 90 days of the decision," or its parent company Alphabet risks being hit with fines amounting to five percent of its daily turnover for each day it fails to comply.

Google said it would appeal the EU's decision. "Android has created more choice for everyone, not less," it argued in a statement.

The commission said that only one percent of users download rival search apps on Android in Europe, and only 10 percent of people download rival mobile browsers, highlighting Google's dominance of the market.

Irish government in moral dilemma on Apple tax

Anti-poverty activists in Ireland say the government's decision to appeal an EU commission order for Apple to pay back €13 billion undermines its moral authority.

News in Brief

  1. Another referendum 'would take a year', Downing St says
  2. 82-year old Berlusconi to run in EU elections
  3. EU parliament votes to triple funds for democracy promotion
  4. EU parliament backs linking budget payments to rule of law
  5. Verhofstadt voted for Draghi amendment 'by mistake'
  6. 'Plan B' Brexit vote in UK parliament set for 29 January
  7. Verhofstadt wanted Draghi out of G30 group
  8. Putin heads to Serbia amid warnings against West

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. Brexit delay 'reasonable', as May tries cross-party talks
  2. MEPs allow Draghi's membership of secretive bank group
  3. EU parliament backs Morocco deal despite row
  4. Barnier open to 'future relations' talks if UK red lines shift
  5. German spies to monitor far-right AfD party
  6. On Morocco, will the EU ignore its own court?
  7. UK parliament rejects May's Brexit deal in historic defeat
  8. EU suggests majority vote on digital tax by 2025

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  2. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  3. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  4. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  5. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  6. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  7. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  8. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  9. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  10. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  11. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  12. Mission of China to the EUChina: Work Together for a Better Globalisation

Join EUobserver

Support quality EU news

Join us