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Wednesday, 31 August 2016 09:50

EU stoush: Apple's Cook starts off on wrong note Featured

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Apple chief executive Tim Cook lives in a different world to the one you and I inhabit. Nothing else can account for the fact that he was recently proclaiming that the company he leads should not have to pay corporate tax because he felt the tax rate was not fair.

Cook told the Washington Post in a recent interview: "We've said at 40%, we're not going to bring it back (profits parked outside the US) until there's a fair rate. There’s no debate about it. Is that legal to do or not legal to do? It is legal to do. It is the current tax law. It's not a matter of being patriotic or not patriotic. It doesn’t go that the more you pay, the more patriotic you are."

He was referring to recent reports that the US government may offer companies that park billions in other parts of the world a tax concession to bring back all that money to the US. Apple has more than US$200 billion parked outside the jurisdiction of the US.

As the EU has revealed, in Ireland Apple was paying a tax rate as low as 0.005%. One has to conclude that Cook felt this rate was fair. Or would 0.001% have suited him better?

In the Post interview, Cook also indicated that he thought the year 2017 would see corporate tax reform in the United States. "The US needs to invest more in infrastructure — so what would be great is if they take the tax proceeds of a corporate tax reform and invest it in infrastructure and roads and bridges and airports," was what he said.

eu apple

Graphic courtesy the European Commission.

Of course, Cook is right to be optimistic about getting a tax break. Democratic presidential candidate Hillary Clinton has indicated she will consider just such an option during her first 100 days in office while her Republican opponent Donald Trump has been even more plain in saying that he will make it happen.

There is a point at which the chief executives of big corporations think that they can dictate government policy. And the level of arrogance they display is just breathtaking. Of course, governments around the world are always open to being told what to do by big corporations.

Cook is not the first CEO to behave in this manner. There was more than a shade of this kind of arrogance displayed by Microsoft co-founder Bill Gates during the anti-trust hearings in the late 1990s. Facebook's Mark Zuckerberg and Google's Larry Page, Eric Schmidt and Sergei Brin all exhibit similar behaviour at times.

Cook has now threatened the EU that it may lose jobs if it continues to lead the fight to reclaim back taxes. There is a dictionary word for that: blackmail.

Apple behaves as though it is doing countries a favour by opening shop there. Let's not forget that unless Apple is properly able to service the products it sells, nobody is going to continue buying them. And you really can't do that long-distance.

Treating customers with some respect, looking after their needs and honouring things like after-sales guarantees tend to engender confidence and help marketshare grow.

It is not as though Apple is the only game in town. There are others too, perhaps with not such a big aura around them, perhaps not as good in terms of technology.

But this kind of arrogance will be tolerated only for so long. Tomorrow if Apple packs its bags and leaves any country, the richer folk among its customers will continue to buy from the company's US operations. The middle and lower classes will resign themselves to doing without the product.

If there is no cake, remember, people will eat bread.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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