EU's top court rules against Apple, Google in two major decisions

Investing.com -- The European Court of Justice has ruled that Apple (NASDAQ:AAPL ) was given 13 billion euros in illegal tax benefits by Ireland and upheld a multi-billion-euro fine levied on Alphabet (NASDAQ:GOOG )-owned Google (NASDAQ:GOOGL ).

In one ruling on Tuesday, the EU's high court said that two entities overseen by Apple -- Apple Sales International (ASI) and Apple Operations Europe (AOE) -- had effectively received state aid from Ireland in the form of tax advantages from 1991 to 2014.

ASI and AOE, who were both incorporated in Ireland but not tax residents, were allowed by Ireland to exclude from their tax base profits generated by the use of intellectual property licences held by the entities, the Court of Justice said. Ireland had approved this method because the companies' head offices were located outside of the country and management decisions were taken in the US, it added.

In 2016, the European Commission -- the EU's executive branch -- found that this arrangement was "unlawful and incompatible" with the bloc's internal market rules, adding that Apple "as a whole had benefited." The Commission ordered Dublin to "recover" back taxes from Apple.

The decision was later reversed by the EU's General Court in 2020, which ruled that the Commission had not shown that Apple had received a "selective advantage" in Ireland. The General Court also said the Commission's reasoning was based on incorrect assessments of "normal taxation" under Irish law.

But the Court of Justice said it had set aside that judgement, saying the General Court had "erred."

The Court of Justice's decision comes after Apple revealed the latest artificial intelligence-enhanced iterations of its flagship iPhone on Monday. Shares in Apple were lower in premarket US trading on Tuesday.

Google loses EU antitrust court battle

Meanwhile, in a separate pronouncement, the Court of Justice also upheld a 2.4 billion euro fine imposed on search giant Google by the Commission in 2017.

The Commission had fined Google for using its online price comparison shopping service to gain an unfair advantage of its competitors. After a lower tribunal endorsed the ruling in 2021, Google appealed the decision to the Court of Justice.

But the Court of Justice ruled against Google, saying that while EU law does not prohibit a company garnering a dominant position in the market, it does ban exploiting that advantage.

Along with two other charges related to its Android mobile operating system and AdSense advertising service, the EU has now slapped Google with 8.25 billion euros worth of fines over the last decade. Google has challenged the two other judgments and is awaiting a final decision.

Source: Investing.com