EU antitrust chief Margrethe Vestager achieved two significant legal victories on Tuesday as Europe’s top court upheld her decisions targeting Apple’s tax deal in Ireland and Google’s anti-competitive practices. The rulings mark a critical moment in the EU’s ongoing effort to regulate Big Tech and could shape future antitrust and tax policies across the bloc.
In the first ruling, the Court of Justice of the European Union sided with Vestager and the European Commission’s 2016 decision ordering Apple to pay €13 billion ($14.4 billion) in back taxes to Ireland. The Commission found that Apple benefited from favorable Irish tax rulings for more than two decades, which reduced its tax burden to as low as 0.005% in 2014.
The court ruled that Ireland had granted Apple illegal state aid by allowing the tech giant’s Irish subsidiaries to pay minimal taxes, a privilege unavailable to other companies in the country. As a result, Ireland is required to recover the back taxes.
Apple expressed disappointment with the ruling, claiming it complied with both Irish tax law and international tax rules. “The European Commission is trying to retroactively change the rules,” the company said in a statement.
Ireland, which had also challenged the Commission’s decision, has historically attracted Big Tech firms with its low corporate tax rate of 12.5%. However, the country has since aligned with global efforts to reform corporate tax rules, and its tax revenues from multinational companies have continued to rise.
In a separate case, the EU court dismissed an appeal by Google, upholding a €2.42 billion fine imposed in 2017 for anti-competitive behavior related to its price comparison shopping service. The Commission had found that Google used its dominance in search to unfairly promote its own shopping service over those of smaller European competitors, a move deemed discriminatory by the court.
Google, which has since made changes to its practices, expressed disappointment with the ruling but noted that it only pertains to a “very specific set of facts.”
This ruling is part of a broader regulatory battle between the EU and Google, which has faced €8.25 billion in antitrust fines over the past decade. The tech giant is currently appealing two additional cases involving its Android mobile operating system and AdSense advertising service, and it faces ongoing scrutiny over its adtech business.
Vestager’s successful tenure in challenging Big Tech’s tax and competition practices may inspire her successor to continue her aggressive approach. These court victories, which cannot be appealed, solidify the EU’s position as a leading regulatory force in the global tech industry.
The Apple case is referenced as C-465/20 P Commission v Ireland and Others, while the Google case is C-48/22 P Google and Alphabet v Commission (Google Shopping).
Broader Implications for Tech Giants
Beyond Apple and Google, other major companies like IKEA, Nike, and Huhtamaki are also under investigation for their tax arrangements within the EU. These ongoing cases highlight the Commission’s continued focus on ensuring that multinational corporations pay their fair share in taxes while promoting fair competition in the digital marketplace.
As Vestager’s term concludes in November, her legacy will likely be defined by these landmark cases, with the potential to reshape how tech giants operate within the European Union.
Source: Reuters
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