Business

Does the Apple tax case mark a turning point?

  • 3 September 2016
  • From the section Business
Tim Cook Image copyright PA
Image caption Apple boss Tim Cook says the European Commission's tax ruling is "maddening"

Was this week a turning point? It has certainly been expensive for the biggest stock-market listed company on the planet.

Of course, Apple can afford that €13bn (£11bn) tax bill that may be heading for the chief financial officer's in-tray. And who knows whether it will actually have to pay up.

Perhaps the planned appeal will be successful. But it certainly feels like a very important moment in the battle to get multinational businesses to pay what many governments - as well as ordinary people - think would be their fair share of tax.

It is true that this episode has not brought unity among the governments concerned. The United States in particular is livid about the way the European Commission has gone about trying to get Apple to cough up.

But despite the spat, there's still a degree of underlying common purpose. It is driven in part by a recognition that voters, many of them at least, detest what they see as the devious behaviour of many multinationals and some wealthy individuals.

The recent Panama papers scandal demonstrated that.

Then, there are the trade talks between the US and Europe, known as TTIP. There is a strong business lobby supporting the project and its aim of removing barriers to transatlantic trade and investment.

Image copyright Getty Images
Image caption Critics say a TTIP deal could lead to job losses

We can't declare the talks formally over, but the doubts and hostility expressed by senior political figures in France and Germany in the past few days do suggest that TTIP is in precarious territory.

Why did those leaders speak out? In part, because both countries have elections coming up. President Francois Hollande, of France, and the leader of Germany's social democrats, Sigmar Gabriel, are well aware of the hostility to TTIP among many voters.

Some people feel they have been left behind by globalisation and are worried that more of the same will undermine jobs and incomes.

Some think that trade talks are going to weaken standards of environmental and consumer protection, and even impinge on the sovereignty of elected governments - all, they would argue, for the benefit of big business, and not ordinary people.

Similar concerns have affected the US presidential campaign. The Republican candidate Donald Trump has been especially outspoken about international trade deals.

Media captionDonald Trump has accused China of trade "rape"

But his main rival, Hillary Clinton, has also felt obliged to reflect the mood. She had been a keen supporter of trade liberalisation agreements, including TTIP. Now, she seems decidedly lukewarm.

And with another set of talks that have been completed but not yet ratified by the US Congress - involving countries of the Pacific Rim - she said the result didn't live up to her standards.

So we have two developments this week that reflect a popular distaste for international big business.

And haven't we had a lot of that kind of thing in the past few years? Some people think Britain's vote to leave the European Union is part of the same "small-is-beautiful" feeling.

Image copyright Getty Images
Image caption Much of the Vote Leave campaign's rhetoric focused on rejecting big government

Of course, that distaste has always been there, but the financial crisis really brought it out. Certainly, banks were at the centre of that storm, but the sentiment spilled out to undermine popular perception of big business more widely.

None of this is to write the obituary of the giant multinationals. They lobby, they contribute to political campaigns, they send their top staff on secondment to, and recruit from, the top levels of governments.

And let's not forget that the reason they are successful multinationals is that they make and sell stuff and services that the great majority of us want.

But this may have been the week when they were told, by some at least: thus far, and no further.

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