Alphabet Inc.’s (GOOGL) Google and Apple Inc. (AAPL) could be forced to pay out “several million euros” in fines after a high-ranking government official in France pledged to take legal action against the two companies for abusive business practices.
Speaking on RTL radio on Wednesday, French Finance Minister Bruno Le Maire accused Google and Apple of imposing tariffs on software developers keen to them sell apps. Le Maire said it is unacceptable that the two tech giants “unilaterally modify contracts” and promised to take legal action to put a stop to them bullying small start-ups and developers, according to Reuters.
The finance minister will now file a lawsuit with the Paris Commercial Court for what he views as abusive trade practices. “As powerful as they are, Google and Apple should not be able to treat our startups and our developers the way they currently do,” he said.
Spokespeople for Apple France and Google France did not immediately respond to requests for comment.
During his radio appearance, Le Maire also said he expects the European Union (EU) to close tax loopholes that benefit the likes of Google, Apple, Facebook Inc. (FB) and Amazon.com Inc. (AMZN) by the start of 2019. Earlier this month, Le Maire told French newspaper Le Journal du Dimanche that EU officials plan to levy a special tax on the four U.S. tech companies.
The minister told the paper that the proposed tax will be levied on turnover, rather than profits. He expects the four companies to be taxed between six and two per cent of revenues, adding that two percent is the most likely outcome. (See also: 5 Big Tech Stocks' Largest Threat May Be Uncle Sam.)
Last year, EU regulators slapped Google with a record $2.7 billion fine for favoring its own comparison shopping service in its search results — Facebook has come under similar criticism for how it operates its news feed. (See also: Google Fined By India's Antitrust Body for 'Search Bias'.)
Google’s fine came a year after EU regulators ordered Apple to pay back $14.5 billion in taxes, plus interest. The iPhone maker was hit with the charge after regulators discovered that it had paying a tax rate of 0.5 percent, rather than the 12.5 percent required by law.