EU’s Vestager Secures Major Wins Against Apple and Google Before Leaving Antitrust Role

Margrethe Vestager, the European Union’s outgoing antitrust chief, achieved two significant victories on Tuesday, as the Court of Justice of the European Union backed her efforts to hold tech giants Apple and Google accountable for anti-competitive practices and tax avoidance. These rulings mark a defining moment in her tenure, which has been characterized by a firm stance against Big Tech, and could pave the way for her successor to continue pursuing aggressive action.

Apple’s Irish Tax Deal Overturned

According to Reuters, Vestager’s long-standing case against Apple culminated in a landmark decision, with Europe’s top court supporting her push to recover 13 billion euros ($14.4 billion) in unpaid taxes. Vestager initially challenged the iPhone maker’s tax arrangements in 2016, accusing Apple of benefiting from favorable Irish tax rulings that allowed it to reduce its effective tax rate to as low as 0.005% in 2014.

The Luxembourg-based court upheld the European Commission’s ruling, declaring that the tax treatment granted to Apple by Ireland amounted to illegal state aid. The court emphasized that Apple’s two Irish subsidiaries were given a preferential deal that did not align with the country’s general tax laws. “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 judges said, per Reuters.

Apple expressed disappointment with the ruling, maintaining that it complied with all applicable tax laws during the period under scrutiny and that its profits were already subject to U.S. taxation. The tech company also indicated that it may incur a one-time tax charge of up to $10 billion as a result of the ruling.

Ireland’s Reaction and Tax Policy

Ireland, whose low tax rates have made it a hub for multinational corporations, also opposed the Commission’s decision. However, the country has since taken steps to align with global tax reforms, including dropping its resistance to changing its prized 12.5% corporate tax rate. Despite this, Ireland’s tax revenue from large corporations has continued to increase.

Related: Why Europe Must End Its 30-Year Digital Winter to Ensure Its Long-Run Future

This ruling marks a significant win for Vestager, who hailed the judgment as a victory for “European citizens and tax justice,” according to Reuters.

Google Faces Another Defeat in Court

In a separate but equally significant case, the EU’s top court also dismissed Google’s appeal against a 2.42 billion euro ($2.6 billion) antitrust fine levied in 2017. Vestager had fined the company for manipulating its search engine to favor its own price comparison shopping service over smaller competitors, an act deemed anti-competitive.

Judges ruled that Google’s behavior constituted discrimination, stating that the company’s actions did not fall within the boundaries of legitimate market competition. Reuters reports that Google, while voicing disappointment with the decision, pointed out that it had already made changes to its services to comply with the Commission’s demands.

This decision is part of a broader crackdown by Vestager on the U.S. tech giant. Google has been fined a total of 8.25 billion euros ($8.9 billion) over the past decade for various anti-competitive practices, and it faces additional antitrust charges related to its Android operating system and advertising services.

Impact of Vestager’s Wins

The court’s rulings are final and cannot be appealed, representing a significant validation of Vestager’s approach to regulating Big Tech. As she prepares to leave office in November, these victories are likely to embolden her successor to continue taking on powerful corporations that dominate the digital economy. Vestager, who has built a reputation as a tough enforcer of EU competition rules, celebrated the court’s decisions as key milestones for both tax fairness and digital competition.

Source: Reuters