Apple, Google To Lose Billions After Defeat In EU Court Battles

(RTTNews) - The Court of Justice of the European Union, the top court in the region, on Tuesday ruled against tech major Apple Inc. over tax rulings issued by Ireland, as well as Google, owned by Alphabet Inc., over antitrust fine, which may cause the tech majors to lose billions of dollars.

The Court now confirmed the European Commission's 2016 decision that Ireland granted Apple unlawful tax benefits worth around 13 billion euros, which the country is required to recover.

Further, the Court of Justice dismissed the appeal lodged by Google and Alphabet, and upheld the fine of 2.4 billion euros imposed by the Commission on Google for abuse of its dominant position by favouring its own comparison shopping service.

In 2014, the Commission had opened an investigation into Apple's tax payments in Ireland, over allegedly receiving illegal tax benefits from the country.

In 2016, the Commission decided that Apple Group companies had, from 1991 to 2014, received tax advantages that constituted State aid granted by Ireland, and ordered the country to recover up to 13 billion euros in back taxes from Apple.

But the decision was appealed by both Apple and Ireland in 2019. In 2020, the EU General Court annulled the Commission's decision. As per the then ruling, the Commission had not sufficiently established that those companies enjoyed a selective advantage.

The Court of Justice now confirmed the Commission's decision, noting that the General Court erred in its ruling.

In its statement about Google, the Court of Justice noted that the Commission in 2017 had imposed a fine of around 2.42 billion euros on Google for having abused its dominant position in several national online search markets by favouring its own comparison shopping service over those of its competitors. Alphabet, as Google's sole shareholder, was jointly and severally liable to the tune of 523.52 million euros.

The Commission had then found that Google gave preference to the results of its own comparison shopping service on its general search results pages in 13 countries of the European Economic Area or EEA.

Google had thus presented search results from its own comparison shopping service in a primary position and had promoted them in "boxes" with accompanying attractive image and text information. By contrast, the search results of competing comparison shopping services appeared as simple generic results.

Google and Alphabet challenged the Commission's decision before the General Court, but in 2021, the General Court largely dismissed the action and upheld the fine.

The Court of Justice now dismissed the appeal lodged by Google and Alphabet, upholding the judgment of the General Court.

According to the Court of Justice, the conduct of undertakings in a dominant position that has the effect of hindering competition on the merits and is thus likely to cause harm to individual undertakings and consumers, is prohibited.

In the pre-market activity on the Nasdaq, Apple shares were down 1 percent at $218.74, while Alphabet shares were up 0.3 percent to trade at $150.