Apple and Google are facing significant challenges in Europe and other markets after two landmark rulings by the European Union’s top court.
The court backed EU antitrust chief Margrethe Vestager’s efforts to tackle both companies’ tax practices and anti-competitive behavior, marking a pivotal moment in the EU’s crackdown on Big Tech, Reuters news report said.
In a statement, Margrethe Vestager said the following:
“The Google Shopping case is a landmark in the history of regulatory actions against big tech companies. It was one of the first significant antitrust cases brought by a competition agency against a major digital company.”
“The Commission will continue its work on harmful tax competition and aggressive tax planning — both in terms of legislative proposals and enforcement.”
APPLE
In Apple’s case, the European Court of Justice upheld a 2016 European Commission decision that ordered the tech giant to pay €13 billion ($14.4 billion) in back taxes to Ireland. The Commission had accused Apple of benefiting from illegal tax arrangements in Ireland, which allowed the company to reduce its tax rate to as low as 0.005 percent in 2014.
The court’s ruling confirmed that these favorable tax treatments amounted to unlawful state aid, a decision that Apple strongly opposed, claiming it adhered to both Irish and U.S. tax laws. Despite the ruling, Apple expressed disappointment, accusing the EU of attempting to retroactively change the rules.
Ireland, known for its low corporate tax rates that have attracted multinational tech giants, had also challenged the ruling but lost. Despite its previous opposition, Ireland has begun to reform its tax system in line with international standards.
In a separate case, Google lost its appeal against a €2.42 billion ($2.7 billion) fine imposed by EU antitrust regulators for anti-competitive practices related to its price comparison Google shopping service. The European Court of Justice (CJEU) upheld the European Commission’s 2017 decision, which found that Google had abused its dominant position by promoting its own shopping service over smaller European competitors.
This decision marks a significant blow to Google, which had previously challenged the ruling in a lower tribunal in 2021. The court emphasized that while holding a dominant market position is not illegal under EU law, exploiting that position to hinder fair competition and harm consumers is prohibited.
This case is one of several in which Google has faced scrutiny from EU regulators. Over the last decade, the company has been fined a total of €8.25 billion for various antitrust violations, including its practices involving its Android operating system and AdSense advertising service, with judgments on these cases still pending.
Google, which has made changes to its services following the original ruling, expressed disappointment with the decision. This is one of several major fines Google has faced in the EU, totaling €8.25 billion over the past decade.
Additionally, Google is fighting new EU antitrust charges issued in 2023, which could result in the tech giant being forced to sell parts of its adtech business. Regulators accuse Google of favoring its own advertising services, further intensifying the company’s legal challenges in Europe.
These rulings highlight Europe’s growing regulatory pressure on Big Tech. As Vestager’s term comes to an end, her victories are likely to inspire her successor to continue the aggressive stance on tech giants, particularly regarding tax justice and market competition.
Baburajan Kizhakedath
