The European Union’s top court delivered two significant rulings on Tuesday, marking major victories for the bloc’s efforts to regulate tech giants. In separate cases, the court ruled against Apple and Google, which face billions of euros in financial penalties.
These decisions represent crucial legal wins for the EU’s competition authorities, particularly for Margrethe Vestager, the bloc’s outgoing competition chief, who has been a central figure in the EU’s campaign to curb the power of big tech companies.
In the first case, the European Court of Justice (ECJ) ruled that Apple must pay €13 billion ($14.3 billion) in back taxes to Ireland. This judgment concluded a lengthy legal battle that began in 2016 when the European Commission accused Ireland of granting Apple illegal state aid by allowing the tech giant to pay far less tax than other companies operating within the EU.
The ECJ’s decision confirmed the Commission’s stance, stating in its ruling that Ireland had offered Apple unlawful tax benefits, which the country is now obligated to recover. The court’s judgment upholds the Commission’s 2016 decision that Ireland enabled Apple to pay a tax rate as low as 0.005 percent on its European profits 2014, down from 1 percent in 2003.
This ruling marks a key moment in the EU’s broader campaign against “sweetheart deals,” where multinational corporations secure favorable tax arrangements with individual member states. Vestager, who has spearheaded many of these investigations, praised the outcome as a victory for European citizens and tax fairness. She affirmed that the EU would continue to challenge anti-competitive practices and tax evasion by global tech firms.
Apple expressed its disappointment with the ruling, maintaining that it has complied with all tax laws and arguing that it had not received special treatment from Ireland. The company said it would review the judgment but has thus far refrained from indicating whether it will pursue further legal action. Ireland, which serves as Apple’s European headquarters, also expressed dismay at the ruling but stated it would respect the court’s findings.
Ireland’s role in this saga is pivotal, as the country had opposed the European Commission’s decision. Dublin argued that its tax policies were fully compliant with EU laws and that it had not offered selective benefits to Apple. However, the court’s ruling leaves Ireland in a position where it must now enforce the recovery of the back taxes owed by the tech company.
Shortly after the Apple ruling, the European Court of Justice delivered another blow to big tech by upholding a €2.4 billion ($2.6 billion) fine against Google in an antitrust violation case.
The court dismissed an appeal by Google and its parent company, Alphabet, concerning a penalty imposed by the European Commission in 2017. The fine was levied after Google was found to have abused its market dominance by promoting its comparison shopping service at the expense of competitors.
The court’s ruling in the Google case is seen as another affirmation of the EU’s commitment to regulating the market dominance of large tech firms. The original fine was part of a series of high-profile investigations into Google’s business practices, with the EU accusing the company of anti-competitive behavior in areas such as search engine services and online advertising.
