In the dispute with the European Commission for about 13 billion euros in back taxes, Apple suffered a final defeat before the European Court of Justice (EC). Judges in Luxembourg overturned an earlier ruling in Apple's favor and ruled in favor of Brussels authorities.

The background is a tax dispute: According to the European Commission, Ireland, where Apple's European headquarters are located, granted the iPhone maker an unacceptably low tax rate of just 0,005 percent. This violates the international community's state aid guidelines. In 2016, authorities in Brussels ordered Apple to pay 13 billion euros in taxes plus interest. The money has been in a separate account since then.

The iPhone Group has repeatedly emphasized that the income of the two Irish subsidiaries in question is taxed primarily in the United States. So Apple felt it was being forced to pay twice. In 2020, the group was successful before an EU court, which declared the additional claim invalid. The European Commission has failed to prove that Apple's tax arrangements in Ireland constitute prohibited state aid, the judges argued.

The Commission appealed to the EC and was now successful: the judges ruled that Ireland granted Apple illegal aid that must be returned. Ireland itself has been reluctant to collect the money for years.

Google fined for abuse of position

In another ruling, judges in Luxembourg ruled that Google must pay a 2,4 billion euro fine imposed by the EU Commission in 2017. Thus, the EC confirmed the corresponding judgment of the previous instance, the Court of the European Union.

The fine was imposed because Google placed its own price comparison service at the top of search results and, according to the Commission, abused its dominant position in that way. The EU Court confirmed the sentence in November 2021. In contrast, Google and parent company Alphabet turned to the EC – but have now lost.

Previous rulings rightly found that Google's behavior was discriminatory and inconsistent with competitive performance, the EC explained. Companies in a dominant position are not allowed to behave in such a way as to restrict competition.

Multiple fines amounting to billions of euros

The competition authority of the EU Commission has imposed fines of several billion dollars on Google in the past years, although they did not cause major financial problems for the company. The EU Court will decide on a similar case already next week. The question is whether Google inappropriately hindered other providers in the advertising of search engines in the "AdSense for Search" service and whether the fine of the EU Commission of 1,49 billion euros is justified.

Source: Deutsche Welle