EU Court Orders Google and Apple to Pay Billions in Antitrust and Tax Penalties

On Tuesday, a top EU court handed down two significant rulings against Apple and Google, marking substantial victories for Brussels. These decisions come at a crucial time for the bloc’s outgoing competition chief, Margrethe Vestager, who has faced several setbacks in recent years.

The European Court of Justice, the highest court in the EU, ruled that Apple must pay 13 billion euros ($14.3 billion) in back taxes to Ireland. The court confirmed that Ireland had provided Apple with unlawful aid, requiring the country to recover the funds. “The Court of Justice gives final judgment in the matter and confirms the European Commission’s 2016 decision,” the court stated.

Shortly after, the court upheld a 2.4-billion-euro fine against Google. This penalty, imposed in 2017, was for abusing its market dominance by favoring its own comparison shopping service over competitors. The court rejected an appeal from Google and its parent company, Alphabet.

The Apple case, one of the EU’s most contentious legal battles with big tech, dates back to 2016. The European Commission accused Ireland of allowing Apple to avoid paying billions in taxes. According to the Commission, Apple’s tax rate in Ireland fell from 1% in 2003 to just 0.005% by 2014.

In 2020, the General Court annulled the tax order against Apple, a decision Brussels contested. The European Court of Justice had considered sending the case back to a lower court but ultimately ruled that Apple should pay the back taxes.

For Brussels, these rulings come as a relief after struggling to defend its tax enforcement actions, including previous losses against Amazon and Starbucks. The EU’s fine against Google is part of a broader series of record penalties for competition rule violations, totaling around eight billion euros from 2017 to 2019.

Next week, Google faces another challenge when the EU court will address one of its smaller fines, approximately 1.49 billion euros. In the U.S., Google is also under scrutiny, with a trial beginning this week over allegations of online advertising dominance and anti-competitive behavior. Additionally, a U.S. judge recently ruled that Google maintains a monopoly with its search engine.

Regulators are particularly concerned about Google’s ad tech, which governs online advertising placement and pricing. The EU has preliminarily accused Google of abusing its market position in online ads, suggesting the company may need to divest part of its ad services. This investigation is ongoing, with Google given the opportunity to respond.

In the UK, a two-year investigation by the competition watchdog concluded that Google engages in “anti-competitive practices” in online advertising.