The European Union’s powerful antitrust and COVID-19 bailout enforcer says the EU will push ahead with its own digital services tax even if the U.S. sticks to its efforts to block a global deal.
European Commission Executive Vice President Margrethe Vestager, from Denmark, is the most senior EU official to speak out in the wake of the U.S. withdrawing from negotiations on the tax.
The EU would “really, really prefer a global consensus” on digital tax, but will push ahead with a regional tax, “if we need to.”
The new tax is necessary, Vestager argued, due to the ease with which many large tech companies minimize their European taxes. Big tech companies are inviting a backlash from both consumers and regulators by repeatedly pushing the limits of EU law. Many of those companies are American, Vestager highlighted, pointing to a long list of antitrust and tax cases against Apple, Amazon and Google as a sign companies are not learning from past EU regulatory tangles.
Despite shared “fundamental values,” the U.S. and EU are allowing themselves to be divided by China, with severe economic and political consequences.
Vestager said some Chinese companies do not compete “fair and square” and said “there is a huge problem of reciprocity” when it comes to market access in China. EU officials are frustrated that Chinese authorities block foreign companies from bidding for Chinese government projects, while suspecting that Chinese companies benefit from government subsidies, giving them an unfair advantage in the EU’s more open public tender systems.
Another possible solution, she said, would be a joint U.S.-EU “Trade and Technology Council," an idea first proposed by the EU Trade Commissioner Phil Hogan to give Western powers a place to coordinate their position vis-a-vis Chinese technology and commerce.
Author: Ryan Heath