Commission should speed up and expand Google competition investigation, MEPs say
The EU Commission should investigate why Google offers its “Android” operating system only in conjunction with other Google services and also why manufacturers allegedly may not pre-install rival products; MEPs say in a response to the Commission’s annual competition report for 2014.
Economic and Monetary Affairs Committee MEPs approved the report by Werner Langen (EPP, DE), by 40 votes to 6, with and 4 abstentions, on Monday. The report not only urges the Commission to speed-up the google investigation and extend its scope, but also sets out general recommendations to improve competition and picks some bones with the Commission on corporate taxation practices and state support to banks in the wake of the financial crisis.
New criteria for digital market mergers and acquisitions
On a general note, MEPs would like the Commission to define new criteria for assessing market size in the digital area. They feel that the current overall “turnover” criterion is not sufficient to judge whether mergers or takeovers are leading to too-dominant market positions in the digital economy. They stress that businesses with low turnovers and substantial start-up losses may have large consumer bases and therefore big databases and strong market positions. As an example, they cite the Facebook takeover of “WhatsApp”.
Fine natural persons, not just companies
Committee MEPs consider that the existing rules on fines to be imposed on legal persons for infringements should be supplemented by penalties against the natural persons responsible. Such fines should be high enough to act as a deterrent, they say.
Downscale state support to banking sector
Committee MEPs call on the Commission to clarify the rules and procedures under which State aid in the financial sector can be authorised. They take the view that state aid for the banking sector must be scaled back, at the very latest when banking union is completed.
Work for fair tax competition
The report welcomes the state aid investigations initiated by the Commission in 2014, in the wake of the “Luxleaks” revelations, into favourable “tax ruling” decisions for Starbucks (NL), Fiat (LU), Amazon (LU) and Apple (IE) and the subsequent investigations into all 28 member states’ practices. It calls on EU member states to cooperate fully with these investigations and with the ongoing work of Parliament’s Special Committee on Tax Rulings. If the Commission decides that a member state should recover money from a company, due to infringements of tax-related state aid rules, this money should not be returned to the same member state, but to member states that have suffered from an erosion of their tax bases, it says.
Fair tax competition is fundamental to the EU’s single market, but the primary competence for it remains with EU member states. To prevent unfair tax competition, lawmakers should therefore consider harmonised tax bases, exchanging information between tax authorities, country-by-country reporting on profits and losses and introducing a common consolidated corporate tax base (CCTB), says the text.