Emmanuel Macron hit out at “Anglo-Saxon” technology giants for distorting competition and acting against the common good as he pushed European leaders to adopt a radical approach to taxing digital companies.
Speaking after a summit of EU leaders in Estonia, the French president said “the dominant actors, the Anglo-Saxon ones especially, do not respect the rules of the game”, citing complex schemes of tax avoidance and tactics to thwart rival start-ups offering innovative services.
France is spearheading a European push to tax digital companies such as Google, Facebook and Amazon based on the revenues, rather than the profits, they generate in EU countries. Germany, Italy and Spain back this “turnover tax” which has the potential to wreak havoc with tech groups’ business models.
The French president pinpointed Google as destroying 90 per cent of the market share of “of all independent European operators” offering online price comparison services when the US company decided to enter that market.
The search engine was slapped with a record €2.4bn fine by Brussels this year for manipulating a dominant position in the sector by giving preference to its own shopping service at the expense of smaller competitors.
Mr Macron called on Brussels to create a “name and shame” platform where smaller online companies could report competition-distorting behaviour at the hands of larger rivals, saying it was a joint proposal of Germany, France, Italy and Spain.
The French president said that the plan, which should be a “European initiative”, would “allow anyone, any economic actor who thinks they are a victim of excessive behaviour, or of an abuse of dominant position . . . to make known their difficulties”.
Europe needs “whistleblowers on these matters of economic aggression”, he said.
Mr Macron praised the European Commission’s decision to force the Irish government to claw back billions of euros in taxes from Apple last year.
Plans for a European “turnover tax” are fiercely opposed by low-tax countries, such as Ireland and Luxembourg. Speaking ahead of the Tallinn summit on Friday, Leo Varadkar, Ireland’s prime minister, called on the EU to reduce rather than ramp up the tax burden on Silicon Valley groups.
“If we want Europe to become a digital leader and we want faster innovation then the solution is not more taxes and more regulation but the opposite,” said Mr Varadkar. He added that Ireland had the support of the Netherlands, Luxembourg and the Nordic countries against any EU tax offensive.
The EU’s Tallinn summit was dedicated to digital topics, from cyber security to artificial intelligence, but was overshadowed by the issue of tax which requires unanimous backing from the EU’s 28 countries.
After the summit, Jean-Claude Juncker, commission president, said Brussels would put forward its own plans to revamp the taxation of digital companies next year. Brussels has not taken up the French idea of a turnover tax, preferring to keep its options open over ways to widen levies for online companies.
“Tax has to be paid where it is due, be it online or be it offline,” said Mr Juncker.