Apple. Google. Amazon. EU Competition Commissioner Margrethe Vestager has challenged them all.
One of the two commissioners anchoring the dialogue was Margrethe Vestager, the Danish politician who has found a heated celebrity as head of the EU’s directorate general for competition. Her job as chief sleuth requires her to protect the union’s vision of a fair market, and she’s set about it with gusto. Last August, Vestager announced that Ireland had granted Apple Inc. illegal tax benefits, and she directed the company to pay more than $14 billion in back taxes and interest. It was a rare boulder slung at a Goliath, and it drew cheers in many quarters in the U.S. and overseas.
Vestager’s entire tenure has been laced with an instinctive mistrust of big corporations. She’s driven investigations of Amazon.com, Fiat, Gazprom, Google, McDonald’s, and Starbucks—and she still has two and a half years remaining in her term. Rulings on McDonald’s and Amazon, both under scrutiny for their tax deals with Luxembourg, are imminent. If Vestager levies a multibillion-dollar fine against Google—a distinct possibility because the company is fighting three separate European antitrust cases—she will truly set headlines aflame. Google came under review for allegedly forcing Android phone manufacturers to pre-install its suite of apps, favoring its own comparison-shopping services in its search results, and preventing third-party websites from sourcing ads from its competitors. As with Apple and Amazon, these cases were bequeathed to Vestager by her predecessor, but she’s accelerated them to their finish lines.
Large American multinationals aren’t used to being stymied overseas, and Vestager’s consistent readiness to face off against them has provoked a startled fury. Tim Cook, Apple’s chief executive officer, called the tax decision against his company “total political crap.” And a group of 185 American CEOs appealed directly to European heads of government to reverse the ruling, describing it as “a grievous self-inflicted wound.” Even the U.S. government has felt the need to speak out. A white paper released by the Department of the Treasury last August criticized Vestager’s office for acting like a “supranational tax authority” and setting “an undesirable precedent.” In late March the office of the U.S. Trade Representative reiterated its opinion, as part of a broader report, that Vestager is deviating too far from prior case law. One former Treasury official from the Obama administration said Vestager’s staff resembled “a bunch of plumbers doing electrical work.”