Key Points:

• The EU aggressively targets big tech companies, especially American firms, with antitrust and tax penalties.
• Recent fines include $14.4 billion for Apple and $2.7 billion for Google.
• The EU’s focus on tech companies might stem from Europe’s lack of similar mega-tech firms.
• Also: The smart money is already looking at The Next Nvidia as the best investment today.

In this discussion, Doug and Lee examine the European Union’s aggressive stance on monopolies, particularly when it comes to American tech companies. They highlight recent cases where Apple (NASDAQ: AAPL) was fined $14.4 billion and Google (NASDAQ: GOOG) $2.7 billion by the EU for tax and monopoly issues. Despite these massive fines, they point out that such amounts are relatively insignificant to these tech giants, often just “rounding errors” compared to their overall earnings. They also note the EU’s apparent focus on American tech companies, contrasting this with the lack of similar actions against consumer goods giants like Pepsi (NASDAQ: PEP) or Walmart (NYSE: WMT). The conversation concludes with an agreement to revisit the topic when the next big company faces EU scrutiny.

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Edited Video Transcript:

One of the things that’s happened for a while, actually decades, is that if people think you’re a monopoly in the United States, it’s tough.

But if it’s the EU and they think you’re a monopoly, a big company, they’re prepared to rake you over the coals.

You are doomed.

You are doomed.

So, you know, there’s conversations about the fact that Google might have an antitrust problem here.

Microsoft did.

But there are two examples of how the EU really hammers big companies in the last week.

You want to illuminate those for a second?

Yeah.

I mean, you know, these have been ongoing for some time.

And as usual, the winners are always the lawyers.

Yeah.

But, I mean, Apple got tagged to the tune of fourteen point four billion for tax issues.

And the EU decided that Google was two point seven billion lighter due to, of course, you know, being a monopoly and kind of dominating what they do.

The thing, Doug, that always gets me about this is for these companies, that’s a rounding error.

They’re like, OK, you know, we probably spent darn near as much in lawyer fees.

Well, Ireland has been sort of a tax haven for a lot of these.

Yeah.

At least for many years.

So, you know, it’s almost like it’s been a really good thing.

It’s been a good ride.

But that that may be over for some of these companies.

The way that these companies are set up is fascinating in terms of where they actually collect their money for tax purposes to sort of move the money around to the best place from a tax standpoint.

So as far as big companies are concerned, maybe that’s over in Ireland.

Yeah, I think they kind of put, you know, for I mean, a ton of companies moved there, you know, twenty ten, twenty fifteen.

Medtronic was one I remember.

There were other big companies that went there.

And I think that there has been a kibosh put on companies trying to do that now.

One of the fascinating things about the taxation situation, EU, M&A stuff that they’ve hit, monopoly, is that it’s tech.

I’ve never seen like Pepsi.

You know what I’m saying?

It’s never Walmart or Pepsi.

Some sort of consumer staples.

Yeah.

No, I don’t know why, but if you’re a tech company, they go after you forever.

If you’re in any other field, they sort of leave you alone.

Well, especially when somebody like Coke dominates the world for that kind of product, you know, and Pepsi is like a distant second, but that’s OK.

So, yeah, it almost always seems to be technology.

And of course, they’re always American-based.

So I don’t know.

I mean, do they just have a constant, you know, gun pointed at a big American megatech?

Well, I’m going to tell you something that I think is a stretch, but since they don’t have any mega tech companies and they probably never will, maybe that they’ve got to collect their money any way they can out of the United States.

It’s one of the shocking things about the intellectual development of tech around the world is that the United States, I’m now going back a long time.

Go back to IBM in its heyday.

The companies that have dominated tech, they’ve always been America-based companies.

Yeah, and now that’s been extended somewhat to Korea, Japan, and Taiwan.

But yeah, I mean, it’s certain.

And to some degree, there’s a tech culture in India and places like that, but it’s nowhere near the strength of Silicon Valley and what we have here.

No, not from an intellectual property.

No.

So it’ll be interesting to see, though, if they continue to lean on them, because I think there’s more cases pending.

That’s right.

So we’re going to come back to this the next company that gets hit.

You know, sort of we could have a lottery as to who it’ll be.

But let’s come back to all this the next time somebody big gets hit.

Yeah, I think that’s a good idea.

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