In a major legal setback for two tech giants, Apple Inc and Google, the European Union has secured victories in its relentless pursuit of Big Tech accountability. These rulings represent a major milestone in the EU’s efforts to rein in corporate dominance and ensure a fair marketplace. With Apple losing its appeal against a 13 billion euro ($14.4 billion) tax bill and Google being hit with a 2.4 billion euro fine for market abuse, the EU has sent a powerful message to Silicon Valley.
Apple’s tax bill: 13 billion euro penalty upheld
The European Court of Justice in Luxembourg upheld a crucial 2016 decision, concluding that Ireland had breached state-aid laws by granting Apple an unfair advantage. In another win for the EU’s antitrust chief, Margrethe Vestager, the court ruled that Google had unlawfully exploited its search engine dominance to prioritise its own product listings.
Vestager, who is nearing the end of her term at the European Commission, has made Apple and Google key targets since assuming her position in 2014. The Apple case, representing the largest in her decade-long campaign for tax fairness, is part of a broader effort that has also included actions against companies like Amazon and Stellantis’ Fiat. Vestager has consistently maintained that selective tax breaks given to large corporations amount to illegal state aid, which is prohibited by EU regulations.
Apple’s Chief Executive Tim Cook previously dismissed the EU’s 2016 ruling as “total political crap”, referring to the order that required Apple to pay 13 billion euro in back taxes. Meanwhile, the EU’s 2017 fine against Google was imposed for the company’s misuse of its search dominance to boost its own product listings. Vestager directed Ireland to reclaim the tax money, which has been held in escrow while awaiting a final decision. The amount is equivalent to roughly six months of Mac sales worldwide.
In response to the court’s latest ruling, an Apple spokesperson expressed disappointment, pointing out that the general court had previously reviewed the facts and nullified the case.
A Google representative also voiced dissatisfaction with the judgment on its appeal, adding that the company’s 2017 proposal to address the EU’s concerns had led to increased clicks for other shopping services.
Global investigations and new regulations
The EU’s scrutiny of Google has set the stage for global investigations, including from the US and UK authorities. The EU’s focus has not been limited to Google’s search monopoly. The shopping case marked the beginning of a series of fines that eventually reached over 8 billion euro. The EU competition authorities hope that the behavior of Silicon Valley will be curbed by sweeping new regulations introduced last year under the Digital Markets Act.
This legislation, among other requirements, prevents Big Tech firms from favouring their services over competitors, an approach shaped by the EU’s long-standing battle against Google’s dominance in search results.
[With agency inputs]
First Published: Sep 11 2024 | 10:10 AM IST
