For quite a while, the European Commission has been rather tough in regulating large American companies doing business in Europe and penalizing them when their practices are deemed unacceptable — sometimes, billions of dollars in fines as well as changes in business activities.
As Kelly Couturier recently noted for the New York Times: ” The biggest American tech companies face intensifying scrutiny by European regulators — pressure that could potentially curb their sizable profits in the region and affect how they operate around the world.”
Here are some examples from Couturier:
Amazon — Antitrust: “The European Commission opened an investigation in June 2015 into whether the company used its dominant position in the region’s E-books market to make it harder for rivals to offer lower prices.” Taxation: “The European Union released a preliminary finding in January 2015 that a tax deal between Amazon and Luxembourg appears to amount to unfair state aid that may have enabled the company to underpay its taxes.”
Apple — Antitrust: “European competition officials confirmed in April 2015 that they had sent questionnaires to music labels and rival music streaming companies to gather evidence and decide whether to open an antitrust investigation into Apple’s new music service.” Taxation: “Officials opened an investigation in June 2014 into whether Ireland gave preferential tax treatment to Apple.
- Facebook — Data privacy: “French, Italian, and Spanish privacy officials announced in early April 2015 they had opened investigations into the social network’s privacy policies; similar inquiries have already been started by Dutch, Belgian, and German officials. The regulators are asking whether Facebook gained sufficient approval from users when the company gained access to their online data.”
- Google — Antitrust: “In April, the European Union’s antitrust chief, Margrethe Vestager, formally charged the company of abusing its dominance in Web searches, accusing it of diverting traffic from its rivals to favor its own products and services, particularly Web sites for shopping.” Right to Be Forgotten: “Europe’s highest court ruled in May 2014 that citizens have a so-called right to be forgotten, and that search engines, including Google, must honor some requests from users to delete links to personal information.”
Microsoft — Antitrust: “In a long-running antitrust case involving Microsoft’s software and interoperability, the company paid almost €2 billion in European fines over a decade, including a penalty in 2013 for failing to adhere to an earlier settlement.”Right to Be Forgotten: Microsoft, which operates the Bing search service, signaled in July 2014 that it planned to follow the lead of Google, by creating an online form that lets individuals request removal of links to material they say violates their online privacy.”
Click the image to read Couturier’s full article.
Shown here: An Apple store in Berlin. Credit Adam Berry/Getty Images for Apple
3 Replies to “Regulatory Issues In Europe for U.S. Tech Companies”
This article shows that business practices abroad may be very complex and different from where the company originated. Antitrust laws vary in different countries, and in this case, the European regulators came together to sort of prevent a possible monopoly from companies with such as Apple who are competing internationally overseas. So it’s important to know the specific antitrust laws and “don’ts” in the country before the possibility of being fined.