Apple, Google Defeats to Fuel EU Big Tech Crackdown

Published: Sep 09, 2024 Duration: 00:04:04 Category: News & Politics

Tags : Ed Ludlow antitrust big tech Katherine Greifeld European Union apple inc. Tim Stenovec Google Inc.

Trending searches: apple intelligence eu

You know, joining you guys to talk about how shiny the new iPhone is is a lot easier than this but we'll get there. Don't want to let in 2016, a European court ruled that basically Ireland is a country, but a member state of the European Union had given Apple preferential tax incentives that were illegal under EU law and Margherita Vestager, the competition chief, instead of landing this decision today has come out on the right side of an argument she's made for a long time, which is that any member state of the EU cannot have an ad hoc, beneficial or preferential tax arrangement with the country. What we're talking about is like where a country says to a tech company, Come, come, build with us to build offices, bring people, and in return you get these things, but the things you get a different what everyone else gets. And so the money is eyewatering. But just really simply it's been sat in an escrow account gathering interest since that initial 2016 decision. All that happened was Apple had a rights of repeal appeal under EU law, which ultimately today they have lost. Wow. So, I mean, there's this is interesting, of course, this tax case. There's also a lot of U.S. antitrust news that's going on, especially when it comes to Alphabet, the Google ad empire, etc.. But with all of these things, I always wonder how much does it actually matter for the company? I know the time you were getting at that a little bit, but we talk about these fines for these companies that have more money than a lot of countries proper. And then these antitrust trials, which just take years and years to play out. I mean, do investors really care about this? I've always found it difficult to track the performance of the stock of a Megacap tech company against a headline about market competition or antitrust. You know, it's always been difficult to tell how sanguine or concerned investors are that a real antitrust action will result in a material impact to that business. Just today, D.A. Davidson I think, put out or initiated coverage actually on Alphabet, the parent of Google with a neutral recommendation. And a big part of that was we feel that antitrust is a headwind to the core search business. And so you've always got to take it into account. And I think you guys have had great conversations with generally of Bloomberg Intelligence that in each jurisdiction what we're increasingly seeing is not just the action of a fine. So in this case, in Google today, they had to pay a fine, which then is small amounts of money in the grand scheme of things. But it's whether or not a regulator requires them to make a fundamental change to that business practice. And therefore whether it will change the fate of whatever that business is. That's why it seems to me, Ed, if we read between the lines, the case about Google, which has a smaller fine than the, you know, how much Apple has to pay, is a bigger deal because yeah, okay, it means Apple's got to pay more taxes. But for for Google, this could be like a fundamental threat to the way it does business, at least with this product. Right. Well, I'd make one distinction, which is that that mechanically Apple is paying back taxes or it's paying taxes that it didn't pay in the first place, whereas this is an actual fine. And one interesting distinction, I guess, under EU law is that when an action is brought by the commission and a fine is issued and then paid, often it goes into a pot of money that's then redistributed across the European Union member states based on complex formulas. So, you know, they're both slap slaps on the wrist. But, you know, again, the biggest question that the street and markets are going to have for Google is, is EU a regulator on behalf of 440 million people. So an important market for Google going to require them to change the practices that they currently use. And I don't know that we quite have the answer on many facets of of Google's business, which you guys will know will also now include AI because regulators are looking closely at the investments made by a number of tech companies in other companies.

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