Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Proposed UK tax on American tech giants betrays Europe’s bitterness over inability to create its own Google & Amazon

Proposed UK tax on American tech giants betrays Europe’s bitterness over inability to create its own Google & Amazon

The proposed tax by the UK on US digital tech giants like Facebook, Amazon and Google is not the start of a new trade war between Europe and the US, but an admission of Europe’s failure to compete in the digital era.

It appears that the UK and US are on a collision course over a digital tax after Washington threatened retaliatory tariffs if the British government did not back down on plans to impose the levy from April.The UK has drafted the legislation for the tax, which will be levied at 2 percent of revenues from UK users for companies that have more than £500 million in digital revenues worldwide and earn over £25 million from UK activities. They hope to raise almost £500 million a year and have included these revenues in public finance projections.


Not another trade war, surely? Bring in the washing!

The tax issue is a storm in a teacup which will fizzle out before it has begun. Just look at what happened when France recently planned to introduce a similar tax: Washington threatened to place tariffs on $2.4 billion of French goods, such as wine, as early as this month if Paris did not back down. Paris promptly retreated.

As UK Prime Minister Boris Johnson and his new government prepare for trade negotiations with Washington next month (after leaving the EU), the hope is of securing a fast-track deal. You can bet your next tax return that this tech levy will be the first item on the agenda when the two countries meet.

There are certainly issues to be addressed concerning the tax behaviors of US tech companies in Europe. But the elephant in the room is that Europe lacks the tech giants of its own which would allow it to compete with the US, and thus seeks to compensate through taxation.

What this tax spat truly reveals is the reality of the overwhelming power and competition gap between the US and Europe.

For many years, Europe has been more concerned with trying to knock down US tech companies than with building their own.

A good measure of how US tech giants are doing globally has always been the extent to which the EU dislikes them and targets them for anti-competitive behavior. So if anything, this latest drive is a compliment to California and Seattle.

Remember the decades-long pursuit of Microsoft, then Intel, and more recently Facebook, Google and Amazon? While the EU sought penalties and tighter regulations, the US tech giants innovated and increased their dominance. And even
China, a vastly poorer economy in terms of GDP per capita, was able to develop a number of global tech companies like Huawei and Alibaba in this period.

The lesson should be clear. Europe ought to stop worrying about Google or Amazon and instead investigate their own shortcomings. There are institutional, structural and cultural barriers to innovation in Europe. Rigid regulation and employment laws, institutionalized risk aversion and short-term investors are among the key differences that have kept Europe in an innovation straitjacket for decades.

Start-ups in Europe have until recently been all too eager to put a ‘for sale’ sign in the window upon launching. When they have shown signs of success, they have mostly been bought by US tech giants. What should be preoccupying European business leaders, governments and investors is how to encourage a clear vision and strategic plans to truly compete, thus builds longer-term investor and market confidence.

When the US regulators start investigating and filing suits against European technology companies for market dominance, that will be a measure of European success. If the proposed taxes on US tech giants prove one thing, it’s that logic and taxes are not good friends.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
US Administration Under President Donald Trump Reportedly Lifts Ban on Ukraine’s Use of Storm Shadow Missiles Against Russia
White House Announces No Imminent Summit Between Trump and Putin
China Presses Netherlands to “properly” Resolve the Nexperia Seizure as Supply Chain Risks Grow
Merz Attacks Migrants, Sparks Uproar, and Refuses to Apologize: “Ask Your Daughters”
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
×