France is preparing to slap American tech giants Apple and Google with hefty fines as a result of “abusive business practices” according to reports.
On Wednesday, the French Government confirmed that it is drawing up plans to take the two American tech firms to court for allegedly violating European commercial and trade laws.
In an interview with RTL radio, Finance Minister Bruno Le Maire accused the firms of preying on small businesses. “I believe in an economy based on justice and I will take Google and Apple before the Paris Commercial Court for abusive business practices,” said the minister.
He said the companies had forced unfair contractual terms and financial agreements onto French start-ups and developers. These targeted companies and individuals making software for the App Store and Google Play.
Le Maire said these practices are unfair: “As powerful as they are, Google and Apple should not be able to treat our startups and our developers the way they currently do.”
The case has already been referred to Frances’s fraud watchdog, which is looking to take legal action against the companies. If the court agrees with the government and regulator, Apple and Google could be forced to pay up to $2.5 million in fines.
European officials are likely to bring new laws into place that’ll effectively ban hefty tax breaks for companies such as Apple, Google, Facebook and Amazon, added Le Maire.
Apple has yet to comment on the situation, but Google spokeswoman Mathilde Mechin said: “We believe our terms comply with French laws and are looking forward to making our case in court.”
This isn’t the first time that Apple has clashed with European governments or been accused of abusing its dominant market position. Last year, the European Commission ordered Apple to pay Ireland $15 billion in back taxes.
For a number of years, the Irish Government had been cutting taxes for the iPhone maker in return for continued inward investment. However, European lawmakers said this was “illegal”.
Apple responded by saying it would appeal the decision. At the time, a spokesperson for the firm said: “The Commission’s case against Ireland has never been about how much Apple pays in taxes, it’s about which government gets the money.”
“The United States government and the Irish government both agree we’ve paid our taxes according to the law.”
Ireland’s Finance Ministry added: “These sums will be placed into an escrow fund with the proceeds being released only when there has been a final determination in the European Courts over the validity of the Commission’s Decision.”