The ECJ sanctions Apple and Google for anti-competitive practices
The European Court of Justice (ECJ) has confirmed two landmark rulings against tech giants Apple and Google. These rulings set a precedent in the fight against anti-competitive practices within the European market.
Apple, the multinational technology company based in Cupertino, has been ordered to return more than €13 billion in unpaid taxes following a definitive ECJ ruling. The court found that Apple benefited for years from favorable tax arrangements provided by Ireland, allowing it to pay significantly less tax than what was required under European competition regulations.
The case, dating back to 2016, revolves around two tax rulings issued by the Irish tax authority in 1991 and 2007, which allowed Apple’s Irish subsidiaries to divert profits to their local branches. While the investigation covers a long period, the European Commission could only demand the repayment of taxes covering the last ten years prior to the 2013 information request.
This ruling is a victory for the European Commission in its efforts to ensure that all companies, regardless of size or influence, adhere to the same tax rules in the common market. Moreover, it sends a clear message against the use of special tax regimes that violate competition regulations.
Google fined €2.4 billion for abusing its dominant market position
Meanwhile, Google has been fined €2.4 billion for abusing its dominant market position in the product comparison services sector. According to the ECJ ruling, Google favored its own comparison tool in search results, harming competitors.
The European Commission sanctioned Google in 2017 after discovering that the company used its market power to preferentially direct traffic to its own service, resulting in “self-preferencing” behavior. This abuse of dominance significantly affected competition, leading users to opt for Google’s service, not due to better quality but because of its preferential visibility in search results.
Alphabet, Google’s parent company, is also jointly liable for part of the fine, contributing over €523 million. The ECJ ruling emphasizes that while holding a dominant market position is not illegal, abusing that position to distort competition is.
Impact of the sanctions for Google and Apple
The sanctions imposed on both Apple and Google reinforce the European Union’s commitment to ensuring fair competition within its internal market. These decisions not only serve as a warning to major tech companies but could also trigger further investigations and stricter regulations in the sector.
In an increasingly digitalized world, big tech companies will have to adapt to a more stringent regulatory environment in Europe, where authorities will not hesitate to impose severe penalties on any player that attempts to circumvent competition rules.
These sanctions for Google and Apple may significantly influence how multinational companies operate in the European Union, creating a more level playing field for businesses of all sizes.
