The European Commission's ruling Aug. 30 that Apple must fork over $14.6 billion (plus interest) in unpaid taxes, due to Ireland having granted illegal preferential aid to Apple over 20 years, was certainly a heavy blow for the tech behemoth. But when it comes to a public response, the decision has given Apple a powerful ally: the United States government.
As White House press secretary Josh Earnest pointed out, the ruling amounts to "a transfer of revenue from U.S. taxpayers to the EU," and that the Obama administration is "committed to fairness in fighting for the interests of U.S. taxpayers and U.S. businesses." While he refused to get into specifics about what actions the administration plans to take, Earnest also stated, "You’ll recall that when it comes to cases that have been decided by the WTO [World Trade Organization], the Obama administration’s record is undefeated. And that means that we have been tenacious advocates for American businesses and we’ve been effective advocates for American businesses."
Apple CEO Tim Cook was more vociferous. In a Sept. 1 interview with RTE, Ireland's national TV and radio broadcaster, he flatly denied allegations of wrongdoing straight off the bat, stating, "There wasn't a special deal between Ireland and Apple. It didn't exist." Though his demeanor was calm, his defense of Apple decidedly belonged to the "no uncertain terms" category, as in his response to the Commission's finding that Apple's effective tax rate was .005% in 2014: "It's a false number. I have no idea where the number came from. It is not true."
Cook also aligned himself and his company strongly with Ireland, praising Apple's Irish employees and the nation's people in general. He stressed that the ruling, which he characterized as "politically-based," would not affect Apple's commitment to Ireland. Although Ireland has yet to officially decide if it will appeal the ruling, Finance Minister Michael Noonan indicated it would.
So is Cook effectively uniting Apple, the U.S. and Ireland against the EU? BBC business editor Simon Jack weighed in on Cook's interview, calling it "a skilful and very nuanced performance, but one which obscured a few key truths." A New York Times editorial went further, arguing that "Apple and the United States have only themselves to blame for the situation."
Regardless of the facts behind the story, it's a good bet that Apple's stakeholders are pleased with the way Cook is handling the situation with cool aplomb. As Jack puts it, European Competition Commissioner Margrethe Vestager has "picked a very wily political opponent."
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