How Apple and Google faced a ‘tough week’ in Europe

Google and Apple have recently faced major legal defeats in the European Union (EU), highlighting the growing scrutiny of their business practices globally. Both tech giants lost separate court fights in the EU, resulting in billions of euros in fines and potential ramifications for their operations in the region. The setbacks follow a string of antitrust challenges the companies have faced in various countries, including the US and the UK.
According to a report by news agency Reuters, the decisions give a boost to the bloc’s competition chief, Margrethe Vestager, who has suffered a series of setbacks in EU courts against her decisions.
Notably, the iPhone maker was ordered to pay a 13 billion euros (approx $14.4 billion) tax bill to Ireland, while Google must pay a 2.4 billion euros (approx $2.7 billion) fine for abusing its market power.

Why EU fined Apple

Vestager said that the fine on Apple “is a huge win for European citizens and tax justice.”

The European Court of Justice (ECJ) upheld a 2016 decision by the European Commission that accused Apple of receiving illegal tax benefits from Ireland for over two decades.
“The Court of Justice gives final judgement 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.
The case originated in 2014 when the European Commission launched an investigation into Apple’s tax arrangements in Ireland, where its European headquarters are based. In 2016, the Commission directed Ireland to collect up to 13 billion euros in unpaid taxes from Apple, asserting that the tech giant had benefited from unfair tax breaks amounting to illegal state aid.
Both Apple and Ireland appealed this decision, and in 2020, the EU General Court ruled in their favour, overturning the Commission’s order. However, the Commission refused to concede and further appealed to the ECJ, which has now delivered its verdict, reversing the General Court’s ruling and siding with the Commission.

Why EU fined Google

Soon after Apple was told to pay billions in taxes, the court also upheld a 2.4-billion-euro fine against Google, which is one of a string of high-profile EU competition cases targeting the tech giant.
Similar to Apple, the court rejected an appeal from Google and its parent company Alphabet regarding a fine imposed in 2017 for abusing their market dominance by giving preferential treatment to their own price comparison shopping service.
Vestager hailed the ruling as a “big win for digital fairness.”

What Apple and Google have to say

Both Apple and Google said they were “disappointed” by the decisions. Apple was probed over sweetheart tax arrangements between major companies and several EU countries, but Apple on Tuesday said there was no “special deal”.
“We always pay all the taxes we owe wherever we operate. The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US,” Apple said in a statement, as per Reuters.
Meanwhile, Google said it was “disappointed with the decision of the court.”
Notably, the EU fine against Google was one of several record penalties imposed for violating EU competition rules, totalling around eight billion euros between 2017 and 2019.
“We made changes back in 2017 to comply with the European Commission’s decision,” said Google, which faces yet another test in the coming when the top EU court will decide on the smallest of those fines, worth around 1.49 billion euros (approx $1.64 billion).