The EU Court’s Ruling on Apple and Google Tax Cases

The EU court is set to make a crucial decision on Tuesday regarding a 13-billion-euro tax case involving Apple and Ireland. In a move that could potentially be a victory for Brussels, the court will also rule on whether to uphold a multi-billion-euro fine against Google. These decisions hold significant weight and will test the abilities of Margrethe Vestager, the outgoing competition chief of the EU, who has faced challenges in the courts regarding her previous decisions.

The legal battle between the European Commission and Apple dates back to 2016 when the EU’s executive arm accused Ireland of allowing the tech giant to avoid paying billions of euros in taxes. This case was part of a series of investigations into favorable tax arrangements between major companies and various EU countries. While Apple initially won a victory in 2020 when the order for them to pay taxes was annulled, a top legal adviser recently recommended overturning that decision due to legal errors. Now, the ECJ must determine whether Apple should pay the 13 billion euros in taxes that were previously waived.

In addition to the Apple case, the EU court will also address a 2.4-billion-euro fine imposed on Google. This fine was a result of the EU finding that Google had abused its dominant position by promoting its own Google Shopping service in its search engine results. While advisory opinions are not binding, they do carry weight and are often followed by EU judges. Google has faced multiple fines for violating EU competition rules in recent years, with the company being hit with fines totaling around eight billion euros between 2017 and 2019.

Google’s Legal Troubles

Google’s legal challenges extend beyond the EU, with a trial beginning in the United States where the government accuses Google of monopolizing online advertising and stifling competition. A US judge recently ruled that Google maintained a monopoly with its search engine, further adding to Google’s legal woes. The company’s ad tech system, which determines online ad placements and costs, is under scrutiny from regulators worldwide. In a preliminary finding, Brussels accused Google of abusing its dominance in the online ad market and recommended divesting part of its ad services to ensure fair competition. Additionally, the UK’s competition watchdog concluded that Google engages in anti-competitive practices in online advertising after a two-year investigation.

The upcoming EU court rulings on the Apple and Google tax cases will have a significant impact on these tech giants and on the broader issue of tax enforcement and competition regulations within the EU. The decisions made will shape the future of taxation for multinational companies operating within the EU and will serve as a benchmark for future cases and investigations.