Europe not investigating Google tax deals

The European Commission has said it is not looking into Google's European tax arrangements as part of its probe into whether the tech giant is abusing its market position.
Written by Chris Duckett, Contributor

The European Union regulator investigating whether Alphabet unit Google is abusing its market power has not extended its scrutiny to the tech giant's tax deals with national authorities across Europe, the bloc's antitrust chief has said.

Margrethe Vestager, who in recent months ordered Apple to pay up to €13 billion in back taxes to Ireland, and Starbucks up to €30 million to the Dutch tax office, said Google is not on her radar for now.

"So far, no, we have nothing formal on that one," Vestager told reporters.

She said she had not received any formal complaint from the Scottish National Party, which in January sent a letter to the European Commission concerning Google's £130 million back tax deal with British tax authorities which some British politicians criticised as a derisory amount.

Vestager also defended the slow pace of the commission's antitrust cases against Google, saying she wanted the shopping case to be water-tight.

This first case has dragged on since 2010, when her predecessor kicked off the investigation.

"I am as sorry as you and everyone else that antitrust work is taking a lot of time," she told European lawmakers earlier on Monday.

"But it is also a sign that this is a case that is building in its strength as well as a case which is of course strictly following our procedures to make sure that also here we build up the rule of law."

Vestager said she does not know when she will issue a decision, but said the case is a very high priority for her.

In the shopping case, Google has been accused of favouring its shopping service over those of rivals in internet search results. In May, reports suggested Google faced a fine in the order of €3 billion from the European Commission following three failed attempts to compromise with the tech giant over the six-year period of the investigation.

The commission can fine firms up to 10 percent of their annual sales, which in Google's case would be a maximum possible sanction of more than €6 billion. The biggest antitrust fine to date was a €1.1 billion fine imposed on chip-maker Intel in 2009.

Google has also been charged with blocking rivals in online search advertising and doing the same with dominant Android mobile operating system.

In April, the commission delivered its preliminary view on the matter, stating that Google has abused its dominant position by imposing restrictions on Android device manufacturers and network operators.

"Based on our investigation thus far, we believe that Google's behaviour denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules," Vestager said at the time.

This follows the Russian Federal Antimonopoly Service (FAS) making a similar ruling in March against a Google appeal.

Russia has stepped up its rhetoric against US software firms, drafting a new law requiring Russian government agencies to give preference to open source and to block US software from computer systems, citing security concerns.

Google's Paris office was raided in May as part of the French government seeking €1.6 billion in back taxes.

"The investigation aims to verify whether Google Ireland Ltd has a permanent base in France and if, by not declaring parts of its activities carried out in France, it failed its fiscal obligations, including on corporate tax and value added tax," the prosecutor's office said at the time.

Google has based its regional headquarters in Dublin, where corporate tax rates are lower than elsewhere in Europe.

With AAP

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