Apple loses decade-long tax dispute in EU, owes €13 billion
Apple has suffered a significant setback in its long-standing tax dispute with the European Union (EU). The European Court of Justice (ECJ), the highest court in the EU, ruled against the tech giant on Tuesday. This decision comes amid Apple's latest product launch event where it introduced new additions to its iPhone, Apple Watch, and AirPod ranges. Following this ruling, Apple's shares experienced a 1% drop in premarket trading.
A recap of the tax dispute
The tax dispute dates back to 2014 when the European Commission, the executive arm of the EU, initiated an investigation into Apple's tax payments in Ireland. In 2016, the Commission ordered Dublin to recover up to €13 billion ($14.4 billion) in back taxes from Apple. The tech giant and Ireland appealed this decision in 2019, leading to a favorable ruling for Apple by the EU General Court in 2020.
ECJ overrules General Court's decision
The European Commission challenged the General Court's ruling, escalating the case to the ECJ. On Tuesday, the ECJ overturned the General Court's decision and upheld the Commission's initial 2016 ruling. This legal battle, initiated by outgoing competition chief Margrethe Vestager, underscores ongoing tensions between US tech giants and the EU over issues ranging from data protection to taxation and antitrust.
Apple's previous antitrust fine and EU's DMA
In addition to the tax dispute, Apple was also fined €1.8 billion ($1.99 billion) by the Commission in March for abusing its dominant position in the music streaming apps market. The EU's comprehensive Digital Markets Act (DMA) has compelled companies to modify some of their practices in Europe. Under this act, the Commission has launched several investigations into tech giants including Apple, Alphabet, and Meta.
