Wat-Not Staff
The rulings rendered by the European Union’s Court of Justice were regarded as a crucial litmus test for European attempts to rein in the biggest digital firms globally. EU regulators have frequently targeted Apple and Google, and the corporations have fought the cases through appeals. The Google lawsuit primarily concerns antitrust law, but the Apple case focuses on the European Union’s jurisdiction to intervene in a member nation’s tax policy.
Apple charged on unlawful agreements regarding taxes
In the Apple case, the court upheld a 2016 directive from the European Union directing Ireland to seize 13 billion euros, or around $14.4 billion, in unpaid taxes from the business. Regulators found that Apple had made unlawful agreements with the Irish government, which in certain years permitted the corporation to pay almost no taxes on its European operations.
The European Commission, the executive part of the European Union, challenged the decision to the Court of Justice after Apple had previously acquired the right to overturn the order. The 13 billion euros were deposited into an escrow account as the case made its way through the appeals process. Now that the funds have been released, Ireland’s treasury will receive a significant boost.
According to Apple, the ruling essentially permits the European Union to levy an extra tax on corporate income that is already subject to US taxation. Apple released a statement on Tuesday that stated, “This case has never been about how much tax we pay, but which government we are required to pay it to.”
“The European Commission is attempting to change the rules retroactively and is ignoring the fact that our income was already subject to taxes in the United States, as required by international tax law.” The statement continued. In a regulatory filing on Tuesday, Apple stated that it anticipated recording a one-time income-tax hit in its fourth quarter, which concludes on September 28, of around $10 billion.
The Google lawsuit concerns antitrust laws
In the Google case, the court upheld the commission’s 2017 ruling fining the business 2.4 billion euros for favoring its own price-comparison shopping service over competing products in Google search results. In 2021, Google’s appeal was denied.
In a statement released on Tuesday, Google expressed that, while it was “disappointed” by the verdict, it had previously made changes to its products to comply with the 2017 order. These changes included new designs that directed users to competing websites that compare prices.
Some rivals have expressed dissatisfaction over Google’s improvements for not going far enough. Google added in the statement, “Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 comparison shopping services.”
The proceedings by EU will help in better regulation of the tech sector
The proceedings that resulted in Apple and Google’s initial penalties by the European Union marked a significant change in the regulations governing the tech sector. Up until that point, governments all around the world had mostly ignored digital regulation while companies like Apple, Google, Amazon, and Facebook (now called Meta) grew rapidly and transformed the way people connect, work, live, and shop.
The lawsuits contributed to the European Union becoming the world’s most vigilant antitrust regulator in the tech sector, led by Margrethe Vestager. Following Europe’s example, other nations have increased their scrutiny of the corporate practices of the sector, especially in the US.
The European Commissioner praises the court rulings
Years later, however, the cases have also come to symbolize the slow-moving EU regulatory framework and have prompted more general concerns about the ability of authorities to keep up with the quickly changing tech industry. Different legal issues are addressed in the two cases. The Google lawsuit primarily concerns antitrust law, but the Apple case focuses on the European Union’s jurisdiction to intervene in a member nation’s tax policy.
Vestager applauded the court rulings during a press conference held in Brussels on Tuesday. She claimed that the commission had lost the previous appeal, and she was so taken aback by Apple’s ruling that she started crying. She also said that the Google case should be recognized for igniting a new chapter in digital economy antitrust legislation, serving as a template for other agencies.
According to her, “this case marked a pivotal shift in how digital companies were perceived and regulated.” “Prior to this case, the general consensus was that digital companies ought to be allowed to function independently.”
More legal Scrutiny on the way for Apple and Google
Ireland was forced to grudgingly accept 13 billion euros from the computer giant as a result of the Apple case. Although noting that it has already modified its tax regulations, the Irish government stated in a statement on Tuesday that it did not grant Apple preferential tax status. The government stated, “The Apple case involved an issue that is now of historical relevance only.”
There is more legal scrutiny coming from both sides of the Atlantic for Apple and Google. Google was accused by the Justice Department of abusing its dominance in the digital advertising business, and as a result, the firm was charged with antitrust this week and appeared in U.S. federal court.
In another lawsuit last month, a federal judge declared that Google constituted a monopolist in online search due to its manipulation of the search engine market. A federal jury found in December that antitrust laws had also been infringed by Google’s management of the Google Play app store.
EU attempts to process the matters more quickly
A Justice Department antitrust case concerning Apple’s iPhone policy is also pending. In addition to the shopping case, Google is also appealing two other antitrust cases in Europe. Google was fined 4.34 billion euros by regulators in 2018 for violating competition laws in order to support its Android operating system. The business was fined 1.49 billion euros in 2019 for engaging in deceptive tactics in the digital advertising sector.
Regarding its handling of the App Store and its rules in the music streaming industry, Apple is also facing allegations from the EU. Consumer rights organizations and competing companies have criticized the European Union for its drawn-out appeals process, claiming that its sluggish motion has assisted the two leading tech companies in maintaining their market dominance.
The European Union is attempting to process matters involving competition more quickly. The bloc enacted the Digital Markets Act in 2022, giving authorities the power to penalize major digital companies and compel them to alter their business methods.
GIPHY App Key not set. Please check settings