Com­pa­nies in the news ... and how they were as­sessed

The Week - - City City -

Ama­zon: Brus­sels cracks whip

The French pres­i­dent, Em­manuel Macron, “could not hide his ju­bi­la­tion” last week when the Euro­pean Com­mis­sion slapped a s250m tax bill on Ama­zon, said Si­mon Duke in The Sun­day Times. “Bravo to Europe,” he tweeted. And, in fact, “this is one is­sue over which it is hard not to be on the side of Brus­sels”, said Alex Brum­mer in the Daily Mail. Thanks to an il­le­gal “sweet­heart” deal with Lux­em­bourg in the early 2000s, most of Ama­zon’s Euro­pean prof­its went un­taxed. The s250m be­ing clawed back by the Com­mis­sion’s com­pe­ti­tion tsar, Mar­grethe Vestager, is less than the s13bn she is seek­ing from Ap­ple for a com­pa­ra­ble of­fence in Ire­land, but is nonethe­less sig­nif­i­cant. Vestager’s rul­ing will “add to the dis­com­fort” of the Com­mis­sion’s pres­i­dent, Jean-claude Juncker, who was PM of Lux­em­bourg when “the tax ar­range­ment was ham­mered out”, said The Econ­o­mist. “It could also stoke transat­lantic ten­sions.” Many US politi­cians see Brus­sels’ tax probes as be­ing “driven by tech envy”. But though in­ter­na­tional cor­po­rate tax rules cer­tainly need re­form­ing (Macron pro­poses tax­ing multi­na­tion­als on their rev­enues, rather than prof­its, in par­tic­u­lar ter­ri­to­ries), pun­ish­ing a firm for a 14-year-old rul­ing, hap­pily ac­cepted at the time, “looks harsh”. Don’t ex­pect Vestager, who is cur­rently get­ting stuck into the tax af­fairs of Mcdon­ald’s and Fiat Chrysler, to worry too much.

Ryanair/monarch: con­tin­u­ing tur­bu­lence

Now that Ryanair chief Michael O’leary has apol­o­gised to his pi­lots, and plied them with bet­ter terms and con­di­tions, the air­line will be hop­ing to head off fur­ther trou­ble, said Michael Bow in the Lon­don Evening Stan­dard. The City seems san­guine about the de­ba­cle, which saw Ryanair can­cel more than 20,000 flights “due to a cock-up in or­gan­is­ing its pi­lots’ hol­i­day plans”. Shares have tum­bled, but sev­eral of the air­line’s big­gest in­vestors have de­clared their “rock solid” sup­port. Ryanair’s tra­vails cer­tainly look triv­ial com­pared with those of its de­funct ri­val Monarch, said John Collingridge in The Sun­day Times. Cred­i­tors – cus­tomers, sup­pli­ers, credit card com­pa­nies – and the Bri­tish tax­payer now “face bills to­talling hun­dreds of mil­lions of pounds”. But the air­line’s owner, the “se­cre­tive” pri­vate eq­uity firm, Grey­bull, is likely to walk away with losses that are a frac­tion of the £250m hit re­ported – not least be­cause, as a se­cured cred­i­tor, it is “the first in line to get paid”. Hav­ing al­ready presided over a string of other fail­ures, Grey­bull, which last year bought Tata Steel’s vast Scun­thorpe steel­works for £1, now faces re­newed ques­tions about its opaque style of in­vest­ment.

Unilever: soap duds

Unilever’s soap brand, Dove, has in the past en­joyed plau­dits for its “real women” cam­paign, “us­ing fe­males of all shapes and sizes for ads”, said Scheherazade Daneshkhu in the FT. But the An­glo-dutch group has been forced to pull a new cam­paign, fol­low­ing “an out­cry over al­leged racism”. Aimed at Face­book users, it “showed a black wo­man re­mov­ing a brown T-shirt and re­veal­ing a white wo­man in a white T-shirt un­der­neath. She then takes off her shirt to re­veal an Asian wo­man.” Crit­ics com­plain that it seems to show “a black wo­man turn­ing white af­ter us­ing the soap”; Unilever has apol­o­gised. But will its apol­ogy wash? This, af­ter all, is the sec­ond time the com­pany has been ac­cused of racism: it ran a very sim­i­lar cam­paign, which also caused great of­fence, in 2011.

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