U.S. tech juggernauts are no longer Europe’s sweethearts. On Tuesday, a top EU court ruled that Apple must pay Ireland €13 billion in taxes. Separately, Brussels has fined Google €2.4 billion in a case that kicked off seven years ago, in which the company was seen favoring its shopping search results.
The two rulings deal a blow to the dominance of the tech giants in Europe but mark a key victory for the bloc’s regulators. The EU has scrutinized big tech companies for various reasons, including child safety issues at Facebook parent Meta.
The court rulings were a test for the bloc's outgoing competition chief, Margrethe Vestager, who has suffered a series of setbacks in EU courts against her decisions.
One of the most bitter legal battles between the European Commission and big tech, the Apple case dates back to 2016 when the EU's executive arm claimed Ireland allowed the iPhone maker to avoid billions of euros in taxes.
It had been one of several investigations in the previous decade into sweetheart tax arrangements between major companies and several EU countries.
The iPhone maker gained the upper hand in the long-running Ireland case in 2020, when the EU's General Court annulled the order for Apple to pay the taxes owed—a decision Brussels appealed.
But Apple was dealt a blow in November last year when the top legal adviser of the higher European Court of Justice recommended scrapping that decision, saying it was peppered with legal errors.
EU tightens vice on Google
The European Court of Justice dismissed an appeal by Google and parent company Alphabet against the fine, levied in 2017 after Brussels found that Google abused its dominant position by favoring its own Google Shopping service in search results.
Google lost its final appeal as the court upheld the €2.4 billion fine that a top adviser recommended in January.
Although such advisory opinions are not binding, they do carry weight and are often followed by EU judges in their rulings.
It was not Google's only fine. The company was hit with record fines worth around €8 billion for violating EU competition rules between 2017 and 2019.
Google faces yet another test next week when the top EU court will decide on the smallest of those fines, worth around €1.49 billion.
The legal headaches for Google are mounting across the Atlantic as well.
A trial began on Monday in the United States where the government accuses Google of dominating online advertising and stifling competition.
It comes after a U.S. judge ruled last month that Google maintained a monopoly with its search engine.
Google's so-called ad tech—the system that decides which online adverts people see and how much they cost—is an area of particular concern for regulators worldwide.
Brussels, in a preliminary finding last year, accused Google of abusing its dominance of the online ad market and recommended that the U.S. company sell part of its ad services to ensure fair competition. Google had the right to respond, and the probe remains open.
Separately, Britain's competition watchdog on Friday concluded Google employs "anti-competitive practices" with regards to online advertising after a two-year investigation.
