Friend or foe? EU risks Donald Trump Twitter storm with Google fine

Brussels: US President Donald Trump’s European Union (EU) “foes” are at it again—attacking one of America’s biggest technology companies with a second painful antitrust decision.

EU antitrust commissioner Margrethe Vestager has levied a record 4.3 billion euro ($5 billion) fine on the company, a year after slapping Google with a 2.4 billion euro penalty for thwarting online shopping rivals. It’s the latest in a series of EU strikes on Silicon Valley giants that also included hefty back tax bills for Apple Inc. and Amazon.com Inc., accused of receiving unfair fiscal deals from EU nations.

Wednesday’s Google fine—this time concerning alleged abuse of its market-dominating Android operating system—could end up provoking a “tweet storm” by Trump and more measured criticism from American officials, said Spencer Waller, a law professor at Loyola University Chicago.

“Most major EU competition decisions against US firms have produced pushback from both Democratic and Republican administrations dating back to the Clinton administration,” Waller said. “Usually much of the criticism comes from the antitrust agencies who respond to the EU imposing liability or blocking a transaction on theories not currently being applied in the US.”

Precarious time

The decision couldn’t come at a more precarious time in EU-US relations. Faced with the risk of being caught in the middle of an escalating global trade war, the EU already retaliated against US levies on steel and aluminium imports and earlier this month warned of “worst-case scenarios” in international commerce as Trump is weighing tariffs on imported cars from Europe.

It comes days after Trump told CBS Evening News in an interview that the EU “is a foe, what they do to us in trade” and following a contentious meeting with Nato allies in which he badgered them over their military spending levels. He attacked German Chancellor Angela Merkel over a pipeline deal with Russia and chastised British Prime Minister Theresa May for not pursuing a “hard” enough break with the EU in Brexit talks.

The US in March deployed a seldom-used national-security law to impose levies on steel and aluminium imports, drawing a tit-for-tat tariff response from the EU that targets companies in sensitive political locations for Trump, such as motorcycle maker Harley-Davidson Inc. in Wisconsin, and Kentucky whiskey distiller Jack Daniel’s.

Increasingly hostile

Amid the increasingly hostile trade climate, European Commission president Jean-Claude Juncker will travel to Washington 25 July for a meeting with Trump in a last-ditch attempt to avert a new round of tariffs on European car imports.

American criticism has so far failed to stem the EU’s attacks on big US companies. Almost two years ago, the EU hit Apple with a record bill of 13 billion euros plus interest in tax it hadn’t paid in Ireland. Both Apple and Ireland have EU court appeals pending.

Vestager has also ordered Starbucks Corp. and Amazon to repay tens of millions of euros in back taxes to the Netherlands and Luxembourg.

A self-proclaimed proponent of fairness, Vestager has repeatedly said she doesn’t care what nationality a company is and doesn’t specifically go after well-known American firms.

The EU’s tax probes and payback orders are viewed “with suspicion” from across the Atlantic and “are not well understood in the US because we have no equivalent part of our competition law dealing with state aids,” said Waller. “In addition, our states often view with each other in granting concessions, tax breaks and other advantages to lure business from other countries and other states within the US.”

Justice chief

Makan Delrahim, the US Department of Justice chief, said in June he’d plan to take a look at the EU’s findings on Android. Earlier this year he warned about the EU approach, saying imposing special duties on digital platforms “might stifle the very innovation that has created dynamic competition for the benefit of consumers.”

Delrahim’s comments were a veiled critique of the EU’s investigation into Google’s shopping search. He said the US favours “an evidence-based approach.” Google has criticized the EU’s enforcement action for failing to prove consumers were harmed.

While the EU has aggressively gone after technology companies like Google and Apple, US enforcers have been largely hands-off despite growing calls for the firms to get more antitrust scrutiny because of their dominance in many markets. The US closed a nearly two-year investigation of Google in 2013 without taking any action.

“The US Federal Trade Commission or Department of Justice should also act to end Google’s monopolistic abuses, instead of letting the Europeans be the only cop on the antitrust beat,” said John M. Simpson, director in charge of privacy and technology projects at American non-profit organization Consumer Watchdog.