How Apple and Google Coped with a ‘Tough Week’ in Europe

Google and Apple recently suffered major legal defeats in the European Union (EU), underscoring the growing scrutiny of their business practices around the world. The two tech giants lost separate legal battles in the EU, resulting in billions of euros in fines and potential consequences for their businesses in the region. The setbacks follow a series of antitrust challenges that the companies have faced in various countries, including the US and the UK.
According to reports from the Reuters news agency, these decisions strengthen the position of the bloc’s competition chief, Margaret Vestagerwhich has suffered a number of defeats in the EU courts over its decisions.
Significantly, the iPhone maker was ordered to pay taxes of 13 billion euros (about 14.4 billion dollars) Irelandwhile Google must pay a fine of €2.4 billion (about $2.7 billion) for abusing its market position.

Why the EU fined Apple

Vestager said the fine imposed on Apple “is a great victory for European citizens and for tax justice.”

The Court of Justice of the European Union (CJEU) has upheld the European Commission’s 2016 decision accusing Apple of receiving illegal tax benefits from Ireland for more than two decades.
“The Court of Justice has delivered its final judgment in this case and confirmed the European Commission’s 2016 decision that Ireland had granted Apple unlawful aid which it must recover,” the court said in a statement.
The case dates back to 2014, when the European Commission opened an investigation into Apple’s tax arrangements in Ireland, where the company has its European headquarters. In 2016, the Commission ordered Ireland to recover up to €13 billion in unpaid taxes from Apple, saying the tech giant had benefited from unfair tax breaks that amounted to illegal state aid.
Both Apple and Ireland appealed the decision, and in 2020, the General Court of the European Union ruled in their favor, overturning the Commission’s decision. However, the Commission refused to concede and appealed to the ECJ, which has already issued a judgment, overturning the General Court’s decision and siding with the Commission.

Why the EU fined Google

Shortly after Apple was ordered to pay billions of euros in taxes, a court also upheld a €2.4 billion fine against Google, one of several high-profile EU competition cases targeting the tech giant.
As in the case of Apple, the court rejected the appeal by Google and its parent company. Alphabet regarding a fine imposed in 2017 for abusing a dominant market position by giving preferential treatment to its own price comparison service.
Vestager called the ruling “a major victory for digital justice.”

What Apple and Google have to say

Both Apple and Google said they were “disappointed” by the decisions. Apple has been under scrutiny over tax deals between major companies and several EU countries, but Apple said Tuesday it did not have a “special agreement.”
“We always pay all the taxes we owe wherever we operate. The European Commission is trying to change the rules retroactively and ignore the fact that our income was already subject to tax in the U.S. under the requirements of international tax law,” Apple said in a statement, according to Reuters.
Google, meanwhile, said it was “disappointed by the court’s decision.”
It is worth noting that the EU fine on Google was one of several record fines imposed for violating EU competition rules, totalling around eight billion euros between 2017 and 2019.
“We made changes already in 2017 to comply with the European Commission’s decision,” said Google, which will face another challenge in the future when the EU’s highest court decides on the smallest of the fines, which amount to about 1.49 billion euros (about $1.64 billion).