Blog

Outgoing EU competition chief Margrethe Vestager scored a major victory on Tuesday after the European Court of Justice (ECJ) ruled against Apple in the decade-long battle over the tech giant's "sweetheart" tax affairs in Ireland. 

"Today is a big win for European citizens and for tax justice. The Court of Justice confirms that Ireland granted Apple unlawful aid which Ireland now has to recover, and the Commission's decision in the Google Shopping antitrust case," Vestager said in a press conference on Tuesday. 

The European Commission first investigated Apple's tax payments in Ireland in 2014. By 2016, the Commission demanded Dublin to recover 13 billion euros ($14.4 billion) in back taxes from the US-based company. In 2019, Apple appealed the Commission's decision, and in 2020, the EU General Court ruled in Apple's favor. The EU's second-highest court rejected the Commission's 2016 decision and said that the executive arm did not demonstrate that the Irish government had given Apple a tax advantage. Like a game of ping-pong, the Commission appealed the General Court's decision, which ultimately sent the litigation to the ECJ for final ruling. 

"The Court of Justice gives final judgment in the matter and confirms the European Commission's 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover," the Luxembourg-based court said, adding Apple's two Ireland-based companies enjoyed favorable tax treatment compared to resident companies taxed in Ireland. 

Apple previously stated that from 2003 to 2014, it paid $577 million in tax, 12.5% of the profit generated in the country, which is in line with tax laws. 

"The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US. We are disappointed with today's decision as previously the general court reviewed the facts and categorically annulled this case," Apple wrote in a statement to The Guadrian.

Bloomberg Intelligence's Anurag Rana and Andrew Girard weighed in on Apple's defeat: 

Apple shares in premarket trading in New York were down a little over 1%. 

EJC's ruling comes one day after Apple debuted the new iPhone 16 models and other upgraded devices. Some Wall Street analysts called the launch event 'uninspiring' and questioned if the new iPhone will ignite a big refresh cycle.