EU scores top court wins against Apple, Google

BRUSSELS ― A top EU court on Tuesday delivered two major victories for Brussels by ruling against Apple and Google in separate legal sagas with billions of euros at play.

The decisions gave a boost to the bloc’s outgoing competition chief, Margrethe Vestager, who had suffered a series of setbacks in EU courts against her decisions.

Concluding a long-running legal battle, the European Court of Justice, the bloc’s highest court, ruled that the iPhone maker must pay 13 billion euros ($14.3 billion) in back taxes to Ireland.

“The Court of Justice gives final judgment in the matter and confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover,” the court said in a statement.

Minutes later, the court also upheld a 2.4-billion-euro fine against Google, one of a string of high-profile EU competition cases targeting the tech giant.

The court dismissed an appeal by Google and its parent company Alphabet against the fine, slapped on the search engine in 2017 for abusing its dominant position by favoring its own comparison shopping service.

Sweetheart tax arrangements

One of the most bitter legal battles between the European Commission and big tech, the Apple case dates back to 2016 when the EU’s executive arm claimed Ireland allowed the iPhone maker to avoid billions of euros in taxes.

By the commission’s calculations, Dublin allowed Apple to pay a tax rate of 1 percent of its European profits in 2003 which then dropped to 0.005 percent by 2014.

It was one of several investigations over the previous decade into sweetheart tax arrangements between major companies and several EU countries.

The iPhone maker gained the upper hand in the Ireland case in 2020 when the EU’s General Court annulled the order for it to pay the taxes owed ― a decision Brussels appealed.

The legal adviser of the higher European Court of Justice in November last year recommended scrapping that decision, saying it was peppered with legal errors.

But the top court, which could have sent the case back to the lower court, decided to rule that Apple should pay the back taxes.

Google’s vice tightening

The decisions will offer relief for Brussels which has faced difficulty defending its tax enforcement moves in recent years, with previous cases lost against Amazon and Starbucks.

The EU fine against Google was one of several record penalties imposed for violating EU competition rules, totaling around 8 billion euros between 2017 and 2019.

Google faces yet another test next week when the top EU court will decide on the smallest of those fines, worth around 1.49 billion euros.

Legal headaches for Google are mounting across the Atlantic as well.

A trial began on Monday in the United States where the government accuses Google of dominating online advertising and stifling competition.

It comes after a US judge ruled last month that Google maintained a monopoly with its search engine.

Google’s so-called ad tech ― the system that decides which online adverts people see and how much they cost ― is an area of particular concern for regulators worldwide.

Brussels in a preliminary finding last year accused Google of abusing its dominance of the online ad market and recommended the US company sell part of its ad services to ensure fair competition. Google had the right to respond, and the probe remains open.