Top EU court confirms multibillion-euro payments for Apple, Google

The European Union's highest court on Tuesday ordered Apple and Google to pay billions in back taxes and a competition fine respectively, ending lengthy legal disputes.

The two cases were part of Brussels' fight to stop tax loopholes and rein in US tech giants. In both cases, all legal challenges, which resulted in years-long proceedings, were exhausted.

The European Court of Justice (ECJ) backed on Tuesday a European Commission ruling that Apple must pay €13 billion ($14.4 billion) in back taxes, annulling a previous ruling in Apple's favour.

In 2016, the commission ordered the multi-billion euro tax payment, arguing that the US company had underpaid taxes due in the bloc following a suspected sweetheart deal with EU member Ireland.

Apple filed a successful complaint with the EU's general court, arguing that the commission had failed to prove that the contested tax deal constituted prohibited state aid.

The general court had sided with Apple in 2020, prompting the commission to call on the European Court of Justice (ECJ) to make a final ruling in the case.

The ECJ ultimately decided that the commission was right as "Ireland granted Apple unlawful aid which Ireland is required to recover."

"Today is a big win for European citizens and for tax justice," said outgoing EU Competition Commissioner Margrethe Vestager in Brussels.

During her 10 years in office, Vestager spearheaded a pushback against suspected tax deals between multinational companies and EU member states and led efforts to make international corporations adhere to EU competition rules.

Apple was "disappointed" with the ECJ's final decision, a company representative said.

"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," the Apple representative said.

"We always pay all the taxes we owe wherever we operate and there has never been a special deal," the representative added.

Ireland "noted" the ruling and said it will respect the court's findings, according to a press release.

"The Irish position has always been that Ireland does not give preferential tax treatment to any companies or taxpayers," the statement said.

The statement added that the contested tax deals are no longer in force.

"Ireland is an active participant in international tax discussions and has also made necessary changes to its taxation regime as international tax rules have developed over time," the Irish government said.

In a separate case, the ECJ confirmed a fine worth €2.4 billion ($2.7 billion) for Google for breaching EU competition rules with its price comparison service Google Shopping.

The commission first imposed the fine in 2017, arguing the search engine operator favoured its own price comparison service, Google Shopping, over those of its competitors, and therefore abused its market power.

Google and parent company Alphabet had logged an unsuccessful complaint with the EU's general court in 2020 and had then appealed to the bloc's highest jurisdiction.

The search engine operator had unsuccessfully argued that treating competitors differently is inherent in competition and innovation, not an antitrust violation.

Google said it was "disappointed" with the ruling confirming the penalty, which is final and cannot be challenged.

The European Commission has imposed a total of around €8 billion in fines on Google over different alleged antitrust breaches.

For years, competition watchdogs at the European Commission have been focused on regulating big tech companies operating in the bloc.

Not all payment orders and financial penalties imposed by the commission over the years on multinational corporations however withstood legal challenges.

Vestager dismissed concerns that the latest ECJ's rulings could promt tech giants to leave the EU.

"Europe is a formidable place to do business," the commissioner said, adding that the "450 million customers who use technology, who are quite tech savvy, I want to see it before I believe it that you would leave such a market.

"I think you would want to stay."

The outgoing commissioner added: "I would hope that what we do actually increases the number of businesses that we can choose from, that the market is open."