Europe’s Top Court Delivers Major Setbacks to Apple and Google with Multi-Billion Dollar Rulings

In a significant blow to two of the world’s largest tech giants, the European Court of Justice (ECJ) has ruled against Apple and Google in separate cases that could cost them a combined total of over €15 billion ($17 billion). The rulings underscore the European Union’s unwavering commitment to regulating Big Tech and ensuring fair competition within its markets.

On Tuesday, the ECJ upheld a €13 billion ($14.4 billion) tax bill against Apple, stemming from a 2016 decision by the European Commission that found Ireland had granted the company unlawful state aid. The ruling requires Apple to recover these funds, which the EU claims represent illegal tax benefits the tech giant enjoyed for over two decades. The Commission had previously estimated that Apple’s effective tax rate in Ireland dropped to as low as 0.005% in 2014, a figure that raised alarm bells among regulators concerned about the fairness of such arrangements.

The decision comes just one day after Apple unveiled a suite of product upgrades aimed at boosting sales, making the timing of the ruling particularly poignant. In response to the ECJ’s decision, an Apple spokesperson expressed disappointment, asserting, “We always pay all the taxes we owe wherever we operate and there has never been a special deal.” The company emphasized that it had already paid over $20 billion in taxes in the United States on the same profits that the Commission argued should have been taxed in Ireland.

This case is part of a broader initiative led by outgoing EU antitrust chief Margrethe Vestager, who has been a vocal advocate for fair competition and transparency in the dealings between multinational corporations and EU member states. Her efforts have focused on cracking down on tax arrangements that are perceived as unfair advantages for large corporations.

In a separate ruling, the ECJ also upheld a €2.4 billion ($2.6 billion) antitrust fine against Google, affirming the Commission’s 2017 decision that the tech giant had abused its dominant position in the online search market. The Commission found that Google had favored its own price comparison shopping service over those of competitors, effectively stifling competition and limiting consumer choice across more than a dozen European countries. Vestager stated at the time that Google’s practices denied European consumers “a genuine choice of services and the full benefits of innovation” from smaller rivals.

Google and its parent company, Alphabet, had appealed the fine, but the ECJ dismissed the appeal, ordering the company to pay the fine along with the Commission’s legal fees. CNN has reached out to Google for comment regarding the ruling.

These rulings reflect the EU’s increasingly stringent approach to regulating the tech industry, as it seeks to level the playing field for smaller companies and protect consumer interests. As the digital landscape continues to evolve, both Apple and Google will need to navigate these regulatory challenges while maintaining their competitive edge in an ever-changing market.

The decisions also serve as a reminder to other multinational corporations operating within the EU that compliance with tax and competition regulations is paramount. As the bloc continues to tighten its grip on Big Tech, the implications of these rulings will likely resonate beyond the immediate financial impacts, influencing how companies structure their operations and engage with regulators in the future.