The European Union had a significant victory against big tech companies with two major rulings. Europe’s highest court upheld a $2.7 billion antitrust fine against Google, and separately, it ruled that Apple must repay €13 billion ($14.4 billion) in tax breaks it received from Ireland, which the EU Commission deemed illegal in 2016.
These decisions highlight the EU’s ongoing efforts to hold large tech firms accountable for unfair practices within its market.
The European Court of Justice’s (ECJ) decision to overturn an earlier ruling in favor of Apple reinforces the European Commission’s 2016 stance that the Irish government provided illegal state aid by granting Apple favorable tax breaks. This ruling has major implications for the way multinational corporations use tax loopholes in EU countries to minimize their tax burdens. Ireland is now required to recover the substantial sum from Apple.
EU Scores Major Victories as Court Upholds Google Antitrust Fine and Orders Apple to Repay $14.4 Billion in Tax
In response to the ruling, Apple criticized the EU’s approach, claiming the decision retroactively changed the rules. Apple argued that its income had already been taxed in the United States, as required by international tax law. The company defended its tax practices, suggesting the EU was ignoring the established norms of international taxation.
Apple’s tax arrangement with Ireland allowed it to pay an exceptionally low tax rate, as low as 0.005 percent on profits in 2014. This gave Apple a significant advantage over competitors in Europe, which the European Commission classified as illegal state aid. The court’s ruling mandates that Apple repay the substantial amount it benefited from over the ten years before the EU began investigating its tax practices.
This ruling is a rare win for the European Commission, which has faced setbacks in recent cases involving other US tech giants like Amazon and Starbucks. Both companies successfully challenged EU decisions regarding their tax arrangements in Luxembourg and the Netherlands, respectively.
While the ruling against Apple is a victory, the mixed results of previous cases may impact the EU’s future efforts to regulate tech companies’ use of tax havens in member states.
