Apple- how to win friends and influence people

Apple, the iconic technology company that rules the hip mobile phone market, and who’s rather byzantine financial structures has recently led the EU to demand it pays back 14 billion euros in state support from the Irish government, has reached a new low. Here in France the anti globalisation campaign group, Attac, has been summons to court, at the behest of Apple’s lawyer with a demand to cease and desist their campaign to get the company to pay its taxes.

The company are demanding that Attac pay a sum of some 150,000 Euro against future damages to Apple Stores that may incur as a result of Attac demonstrations. It is a clear and blatant gagging attempt by a global giant. That such a huge corporation is so sensitive to the efforts of a small, albeit active, campaign group belies their huge sensitivity over allegations of shady practices. There is a precedent for Apple on this, the scandal of  their production plants in China, following the high rate of suicide of Chinese workers at Foxconn, and the subsequent rioting Apple made efforts to move some production to Pegatron’s factories, and allowed an external audits. However as New York based China Labour Watch reported in 2016

“According to Apple’s official report on their earnings in 2015, total revenue amounted to $233.7 billion USD. Net profit was a total of $53.4 billion USD, 22.85% of total revenue. In Greater China, Apple received $58.17 billion USD in revenue, which is 25.12% of total revenue in 2015. From this, Apple earned $13.4 billion USD in profits, however, the total base wages of the 1.6 million workers amounted to less than $6.2 billion USD. This is less than half of the profits Apple earns in China. 

Any improvements require a certain amount of economic cost, and Apple has the ability to improve labor rights. Executive Director of China Labor Watch, Li Qiang states: “Currently, Apple is hindering the improvement of labor conditions within the whole smartphone industry.  Apple alone claimed more than 90% of the smartphone industry’s aggregate profits, while a majority of other firms were operating at a loss. If Apple does not take on responsibility commensurate with its status, other companies will not have the ability to make improvements either.”

Through comparing Apple’s profits with workers’ wages, our investigation reveals that Apple is the real source behind the issues surrounding the mistreatment of Chinese workers. Apple only takes care of shareholders but not the workers.”

So Apple’s response was primarily to head off what was turning into a PR disaster while in reality noting much changed.

The EU is claiming that the less than 2% tax rate Apple negociated with the Irish government, far lower than the already low corporate tax rate in Ireland of 12% amounted to a state subsidy by the Irish Govt and falls outside of EU rules. Apple, as was revealed in the Paradise papers have since moved a large part of their non US revenue to Jersey, which has a zero rate tax rate for overseas businesses

Now Apple claim what they are doing with their tax returns is not illegal, and are resisting the EU’s demands rigorously. A bipartisan investigation by the Senate Permanent Subcommittee on Investigations found that Apple’s byzantine corporate structure has lead to sections of the company’s profits being recorded in structures that reside nowhere, Senator Levin, one of the reports co authors is on record saying, “Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven. Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere.” And if you reside nowhere there is no taxes to pay.

Apple is reported to have a company cash pile of over $250bn (£190bn), over 90% is held outside the US, it is thought that a large chunk of it is in one of it’s tax vehicles in Jersey. Nobody seems quite sure.

All the more reason why groups like Attac are so vital in trying to throw light on multinational companies antics.

Today’s legal action by Apple France points to a huge problem for the company, it’s core clientele are exactly those that are likely  to be offended by it’s dodgy practices. Apple portrays itself as a ‘progressive’ company, environmentally and socially cutting edge. They appeal to the creative middle classes, it’s target audience is decidedly liberal, greenie types with the income to afford that top end products. That is why they were so keen to be seen to act on working conditions in their suppliers factories in China, anything to head off a PR disaster. That their actions were primarily cosmetic as shown by the China Labour report may come back to bite them in the bum. Equally this recent action against Attac may have a similar effect. Even if I could afford to buy Apple’s products I would have serious doubts.