A recent article in The Telegraph calls 2015 “the year Amazon delivered on its founder’s vision.” The reporter James Titcomb explains that in 2015 Amazon grew to double its share price, finally became profitable, and is now “almost untouchable as an online retailer” due to its streamlined delivery service. While it’s been a good year in many respects, the company has also had its share of troubles – facing government investigations, employee strikes, and new privacy laws in Europe.
Here’s a timeline of Amazon’s problems in Europe in 2015:
January 16, 2015
The European Union’s antitrust office (the European Commission) releases a preliminary report that the tax deal established between Amazon and Luxembourg’s government in 2003 gave unfair state aid and could have enabled Amazon to underpay its taxes. (Note: countries in the European Union can offer businesses low tax rates, but must offer all deals to every company. To not offer the same tax rates to Amazon’s competitors makes this a possible case of illegal state aid.) The investigation into this allegation began in October 2014 and included other multi-national companies like Apple and Starbucks, but this is the first announcement of any findings. Amazon and Luxembourg’s Finance Ministry “deny any special tax treatment or benefits” and say all allegations are unsubstantiated.
May 1, 2015
Amazon announces that it has begun reporting revenue from its operations in Britain, Germany, Italy, and Spain differently. Previously, Amazon reported this revenue via Luxembourg and Ireland for lower taxes. This change will have Amazon paying higher taxes in the aforementioned countries, therefore taking away more from its profits. Amazon says these changes were in the works for the past two years and that the EU’s investigation has no bearing on it. Ireland announces that it will phase out the tax arrangement that Amazon has, called the “Double Irish,” entirely after pressure from other European Union members.
June 11, 2015
The European Commission begins an antitrust investigation into “whether Amazon used its dominant position in the region’s ebooks market to favor its own products over rivals,” according to the New York Times. It reportedly did so by including clauses in contracts with European publishers to inform it if they ever offered more favorable terms for ebooks to other digital retailers. The article says that Amazon “has been estimated to sell about eight out of every 10 e-books in Britain. In Germany, the market share is just under half,” which brings into question whether these clauses are too anti-competition.
