Europe’s Incoming Internet Tax Czar Is Also an Amazon Shareholder
Paolo Gentiloni was supposed to be one of the can’t-miss selections for the incoming European Commission.
The former Italian prime minister is a polished aristocrat with three noble titles and a 25-year career as a public figure virtually free of scandal. It was no surprise when Ursula von der Leyen, incoming commission president, selected him as what may prove to be her most important lieutenant: Commissioner for Economic and Financial Affairs, a job with a wide-ranging portfolio that includes implementation of a new European Union digital tax aimed at extracting revenue from the giants of the tech sector.
Then, in the lead-up to Gentiloni’s confirmation hearing, 67 reasons to doubt the 64-year-old Roman’s objectivity were revealed. That’s the number of shares his financial disclosure form showed Gentiloni owns in online retail giant Amazon, a company that could be forced to pay out hundreds of millions if a European web tax were established.
Gentiloni, a former Socialist, has vowed to sell the shares before he takes office on Nov. 1. But the fact remains that at the opening bell on the New York Stock Exchange Thursday, Gentiloni’s stock in Amazon was worth $114,972.
“Even if he owned $1,000 in stock it would make people wonder about a conflict of interest,” Raffaele Barberio, founder and director of Key4Biz, an influential online news and information site covering the digital economy, told Fortune. “It’s one problem, and I’m sure it will be addressed properly. But for a measure like the web tax to work, the person implementing it has to be above reproach.”
In the end, the issue did not cause significant problems for Gentiloni, whose candidacy was easily approved by the European Parliament. At one point during the question-and-answer part of Thursday’s hearing, German parliamentarian Markus Ferber told Gentiloni, “I got so many messages from Rome to tell me how good you are that it seems only the pope hasn’t called.”
The six-figure conflict between Gentolini’s stock portfolio and his European Commission portfolio may seem quaint in comparison to the millions Wilbur Ross promised to unload upon taking the helm of U.S. Commerce Secretary. But it is yet another stumble for von der Leyen, the incoming commission president.
Von der Leyen, who will be the first woman and the first German to hold the job, was approved by just a nine-vote margin in the 751-member European Parliament, by far the slimmest since the body was given approval rights for the post in 1967. She didn’t even have the full backing of the German delegation on the vote.
In September, she drew fire for saying she’d create a commissioner post charged with “protecting our European way of life.” To many, it sounded like a phrase out of the anti-migrant playbook of one of the rightwing nationalist movements gaining influence in parts of Europe.
More recently, the nominees for the commission from Hungary and Romania were rejected because of conflict-of-interest problems far larger and harder to remedy than the one involving Gentiloni. It was the first time in the history of the commission that candidates were withdrawn before even being voted on by parliament.
Still, the Gentiloni-Amazon connection is unlikely to sidetrack any legislation around an EU-wide digital tax on companies’ revenues generated from their online business.
The French were the first to introduce such a levy, known locally as GAFA, an acronym for the biggest of the companies expected to be impacted by the new measure: Google, Amazon, Facebook and Apple. The EU has been looking at extending the tax throughout the entire eurozone.
More must-read stories from Fortune:
—What’s behind the great CEO exodus of 2019?
—What’s the difference between a recession and a depression? Here’s what history tells us
—Charles Schwab on the lessons he’s learned over a lifetime of investing
—The 5 most valuable unicorns, according to their latest funding rounds
—Wells Fargo’s new CEO spent 25 years learning from Jamie Dimon—now he’s taking him on
Don’t miss the daily Term Sheet, Fortune’s newsletter on deals and dealmakers.