The Court of Justice of the European Union has definitively ruled in favor of the European Commission and against Apple and Google in two long-running cases with significant financial stakes.
The CJEU has decided that Apple must reimburse Ireland €13 billion representing outstanding taxes because it benefited from unjustified tax advantages, considered illegal state aid, as reported by AFP.
In a separate ruling, the court confirmed a €2.4 billion fine against Google for anticompetitive practices.
Apple Case
The Apple case dates back to 2016 when Brussels ordered the maker of the famous iPhone to repay Ireland the sum of €13 billion. The amount corresponds to the benefits obtained from favorable tax treatment between 2003 and 2014 in this country, where Apple had repatriated all its earnings from Europe (as well as from Africa, the Middle East, and India).
According to the European Commission, Apple's Irish branch paid an effectively negligible tax rate on its European profits "ranging from 1% in 2003 to 0.005% in 2014."
However, in the first instance, the EU General Court overturned the EC's 2020 decision, a significant setback for Competition Commissioner Margrethe Vestager, who was responsible for this case. The Commission appealed.
In a new twist, in November 2023, the CJEU Advocate General Giovanni Pitruzzella issued an opinion - non-binding but generally followed by judges - casting doubt on Apple's victory. He proposed that the Court annul the decision and refer the case back to the EU General Court "for a new substantive decision."
However, the Court did not follow this advice and "definitively rules on the dispute and confirms the European Commission's 2016 decision: Ireland granted Apple illegal aid that this state is obliged to recover," as explained in a press release published on Tuesday.
Huge Fine for Google
In the Google case, the judges confirmed a €2.4 billion fine imposed on the group in 2017 for abusing its dominant position in the online search market.
This is the second-largest financial penalty ever imposed by the EU in an antitrust case.
The Court found that Google "abused its dominant position by favoring its own product comparison service."
"Google's appeal and (parent company) Alphabet's appeal are rejected," CJEU announced.
Google was accused of favoring its Google Shopping price comparison service by making its competitors practically invisible to consumers. Google was required to change how its search results are displayed to comply with European requirements.
The EU General Court ruled in favor of the Commission in a first ruling in November 2021. But Google lodged a new appeal, seeking to annul the fine.
Advocate General Juliane Kokott proposed in January to uphold the fine.
This is one of the major cases brought against Google, which holds the record for the two largest fines ever imposed by the European Commission for anticompetitive practices.
The €2.4 billion fine for Google Shopping was a record sum when it was imposed. It was surpassed in 2018 by a €4.3 billion fine for abusing the dominant position of the Android mobile phone operating system.
In total, Google has been fined over €8 billion for various competition law violations.