Margrethe Vestager, the European Commission’s antitrust chief, won two major victories on Tuesday, with Europe’s top court backing her case against Apple and Google for anti-competitive practices in two landmark cases. Apple will have to pay 13 billion euros in taxes.
Apple will have to pay 13 billion to Ireland
European Competition Commissioner Margrethe Vestager, whose term ends in November, has made a name for herself by going after Big Tech’s tax deals with some EU countries and attempts to stifle smaller rivals. court victories may encourage their successor to adopt a similar approach.
The EU's Director-General for Competition welcomed the rulings.
Today is a great victory for European citizens and for tax justice.
She spoke on X about Apple's decision, also praising Google's ruling as a major victory for digital justice.
In 2016, the European Commission ordered Apple to pay €13 billion in back taxes to Ireland, saying the iPhone maker had benefited from two Irish tax rulings over more than two decades that artificially reduced its tax bill to just 0.005% in 2014.
The Court of Justice of the European Union, based in Luxembourg, ruled in Vestager's favor.
The Court of Justice gives its final ruling on this issue and confirms the European Commission's 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover.
The judges stated.
The judges said that Apple's two Irish-incorporated units benefited from favourable tax treatment compared to resident companies taxed in Ireland, which cannot benefit from such advance rulings by the Irish tax authorities.
Apple, which said it paid $577 million in taxes, 12.5 percent of its profits in the country, under Irish tax laws in the 2003-2014 period covered by the EU investigation, said it was disappointed by the ruling.
The European Commission is trying to retroactively change the rules and ignore the fact that, as required by international tax law, our income was already subject to tax in the US.
Apple said.
Ireland, whose low tax rates have helped attract big tech companies to set up headquarters in Europe, also challenged the EU's decision, saying its tax treatment of intellectual property transactions is in line with that of other OECD countries.
Still, the country cooperated in a review of global corporate tax rules and did what was once unthinkable by ceasing to oppose the waiver of its 12.5% corporate tax rate. But its tax revenue from multinational companies has since increased.
Google also lost in court
The court also rejected Alphabet's appeal against a €2.42 billion fine imposed by Vestager seven years ago, the first of a trio of hefty fines levied on the company for various anti-competitive practices.
Taking into account the characteristics of the market and the specific circumstances of the case, Google's behavior was discriminatory and did not fall within the scope of competition.
The judges stated.
Google expressed its disappointment with the decision.
This judgment concerns a very specific set of facts. We made changes in 2017 to comply with the European Commission's decision.
A spokesman said.
In 2017, the Commission fined the world's most popular search engine for using its own price comparison service to gain an unfair advantage over smaller European rivals.
Google has racked up €8.25 billion in EU antitrust fines over the past decade. The company challenged two rulings involving its Android mobile operating system and AdSense advertising service and is now awaiting the decisions.
It is also fighting EU antitrust charges issued last year that could force it to sell part of its lucrative adtech business after regulators accused it of favoring its own advertising services.
Both decisions are final and cannot be appealed.
The cases are C-465/20 P Commission v Ireland and Others and C-48/22 P Google and Alphabet v Commission (Google Shopping).
Source: pplware.sapo.pt
