Apple is being told to pay 13 billion euros in tax, Deutsche Bank is being fined $14 billion, there seems to be perfectly legitimate reasons behind the big demands, but is there something else going on? Are we seeing a back door trade war?
When Barack Obama referred to BP as British Petroleum it didn’t go down well with UK investors. BP is one of the most popular firms with UK pension funds, so when the Deepwater Horizon oil disaster occurred, many people in the UK weren’t sure how to react. BP has been negligent, it deserved to be fined, and it deserved to be fined in a big way. Even so, there was a feeling that the treatment of BP compared to other oil giants was not symmetrical. Exxon Mobil has not always got things so right either, especially in countries where governments have less clout that the US. Furthermore, a number of US companies, such as Haliburton and Transocean were involved in the Deepwater Horizon project but were not subjected to the same level of venom that was aimed at BP. There was a feeling, unproven, that BP was getting the brunt of the blame because it was not, rather conveniently, American.
One might say ditto for Volkswagen, sure it cheated. It fudged tests. But according to this study Volkswagen is the least polluting diesel car brand in Europe, and that includes, of course, US companies.
Then there is Toyota, cars are recalled all the time, is it any worse than its rivals? But for a while, after a tragic accident involving a Toyota, the company was barely out of the US media, with every fault seized upon.
In the case of BP, Volkswagen and Toyota, the US media were perhaps the main problem – and maybe the US government was simply following edicts laid down by the highest court in the land, the court of public opinion.
Maybe it is a cultural thing, in the US there is an assumption that if it isn’t American then maybe there is something wrong with it, whereas in the UK, if it is British, cynical Brits may assume there is something wrong with it.
As for the EU, its wrath tends to be aimed at the US tech giants, from anti-trust cases against Microsoft in particular, the right to be forgotten on Google, new legislation under consideration to force Google/Alphabet and Facebook to pay publishers when it includes extracts from their articles when it provides search results, and now the tax case against Apple.
In the case of Apple, the EU and corporation tax payable to Ireland, the US government has reacted in fury, while many US companies have warned that the EU slant may make it less likely that they will invest in Europe in the future.
They say this, yet for some time European companies have been talking about the risks associated with setting up in the US, especially regulatory risks.
And that brings us to Deutsche Bank and its potential $14 billion fine for its practice during the peak of the US subprime period.
Some might say it is a bit rich. Just like Bruce Springsteen, the subprime debacle was born in the USA – a US made problem created a crisis in Europe and now European banks are being fined to such an extent that some fear it may trigger off another European banking crisis.
Nothing is proven, maybe all a parties involved from BP to Deutsche Bank from Microsoft to Apple deserved their penalties, they had it coming. Maybe.
But it does not feel entirely right.