The Eurocrat striking fear into corporate America

Margrethe Vestager © Getty images
Margrethe Vestager: no anti-American agenda

Margrethe Vestager has acquired a “heated celebrity” since becoming European commissioner for competition in 2014,  says Samanth Subramanian in Bloomberg Businessweek. She has tried to protect the European Union’s vision of a fair market by driving investigations into the tax affairs of multinationals such as Amazon, Google, McDonald’s and Starbucks. Last August, Vestager ruled that Apple had received unfair tax benefits from Ireland and ordered the US tech giant to pay over $14bn in back taxes and interest. If she also levies a multibillion-dollar fine against Google, “she will truly set headlines aflame”.

Vestager’s readiness to face off against multinationals has drawn cheers from her supporters, and provoked “a startled fury” from her opponents. Apple boss Tim Cook called the tax decision against them “total political crap”. A white paper from the US Treasury criticised Vestager’s office for acting like a “supranational tax authority”.

None of this has discouraged Vestager, who, as “one of the most visible, vocal champions” of the European Union, continues to defend its founding philosophies in decisions related to cartelisation, mergers, and state aid (the latter is considered legitimate in America, but not in Europe). “If you want to do business in Europe, you play by the European rule book,” she once said.

Yet the accusation that she has pursued a vendetta against American companies is unfounded. Of the 81 companies on which Vestager has opened antitrust investigations, only 11 have been American. And it was her Spanish predecessor, Joaquín Almunia, who opened all the “splashiest cases” of her tenure, involving Amazon, Apple and Starbucks.

The decision against Apple has been appealed and the money will be placed in escrow until European courts deliver a final decision. Vestager says the case “flared brightly” because it’s a firm everybody knows and the fine is a big number. That’s putting it lightly, says Subramanian. “No state aid ruling has ever resulted in a recovery so enormous.”

Merryn

Claim 12 issues of MoneyWeek (plus much more) for just £12!

Let MoneyWeek show you how to profit, whatever the outcome of the upcoming general election.

Start your no-obligation trial today and get up to speed on:

  • The latest shifts in the economy…
  • The ongoing Brexit negotiations…
  • The new tax rules…
  • Trump’s protectionist policies…

Plus lots more.

We’ll show you what it all means for your money.

Plus, the moment you begin your trial, we’ll rush you over THREE free investment reports:

‘How to escape the most hated tax in Britain’: Inheritance tax hits many unsuspecting families. Our report tells how to pass on up to £2m of your money to your family without the taxman getting a look in.

‘How to profit from a Trump presidency’: The election of Donald Trump was a watershed moment for the US economy. This report details the sectors our analysts think will boom from Trump’s premiership, and gives specific investments you can buy to profit.

‘Best shares to watch in 2017’: Includes the transcript from our roundtable panel of investment professionals – and 12 tips they’re currently tipping. The report also analyses key assets, including property, oil and the countries whose stock markets currently offer the most value.