On the heels of the European Commission's announcement of a $5.1 billion antitrust fine against Google in connection with search and browser apps for the Android operating system, the National Taxpayers Union (NTU), which has long expressed concerns over the impact of European Union tax and competition policies on taxpayers around the world, voiced serious concerns over the decision. NTU President Pete Sepp, who has authored a Policy Paper on the dangers of EU-style antitrust policy and has offered several comments and analyses on the EU's digital services tax framework, offered the following statement in reaction.
"Once again the European Commission (EC) has decided to continue its reckless campaign against American businesses with its massive fine against Google, undermining the very principles of competition and innovation the EC claims it wants to protect. Without demonstrating a shred of consumer harm on which prudent antitrust actions are normally based, the EC is betraying a radical agenda that falls back on discredited bromides such as protectionism and industrial policy. The EC willfully ignores the fact that aside from requiring manufacturers who want to feature the Play Store app on their devices to also include Chrome and Search, those same manufacturers are free to include other, competing apps on their devices as well. By classifying handsets and operating systems as different markets, the EC's rules rigged the game in favor of its regulators. Yet, consumers are the real losers here, since the Android system is nowhere close to market dominance and as a result of this decision end-users could have even fewer choices. Besides, the Android system, currently offered to phone makers at no charge, could become impossible to provide for free thanks to the EC's new fine and crackdown. That could result in higher phone prices for European consumers as well as higher purchase barriers for those living in underserved areas of the world.
Equally important, in its quest to promote European-based businesses, the EC's action will have precisely the opposite effect. Numerous small- and micro-enterprises in Europe have been able to do everything from managing their supply to chains to promoting their goods and services through American-developed platforms, ironically giving them the worldwide competitive boost that the EC claims it wants to provide but is now undermining.
Whether by conscious design or confluence of policies, this latest decision, combined with EU "privacy" directives that stifle innovation and a digital services tax scheme that flagrantly violates sound tax policy, should be a wake-up call to U.S. policymakers. As NTU has noted before in extensive commentaries, the tax plan is not only punitive toward U.S. job creators, it erodes long-held principles such as physical presence and non-discrimination toward all industries. The U.S. Treasury, along with Members of Congress, must weigh options in responding to the EC's tax challenges as well as this latest antitrust power-play. As far as tax policy is concerned, even Section 891 of the Tax Code, which allows the President to protect U.S. taxpayers who are being unfairly targeted by other countries, must be on the table. But make no mistake, this is not just about defending American interests -- the entire global movement toward economic liberty and prosperity, from which taxpayers everywhere can benefit, will be endangered unless the EC's edicts are challenged with common sense."