EU faces big tech crunch day in court

Two landmark cases taken by the EU against big tech could be resolved tomorrow, as the bloc’s top court rules on billion-dollar cases against iPhone maker Apple and search giant Google.

The EU’s Court of Justice is set to resolve a longstanding €13 billion conflict over the unusually low tax bill the iPhone maker paid in Ireland, one of a series of cases that followed the 2014 LuxLeaks scandal.

Judges will also rule on a record-breaking €2.4 billion fine imposed on Google and its parent company Alphabet in 2017 for channeling traffic to its own price-comparison service, Google Shopping, using its dominant search engine.

The judgments will bookend the career of EU competition commissioner Margrethe Vestager, who began her Brussels stint with a series of clampdowns on sweetheart tax deals EU members had struck with multinationals – in some cases implicating her then-boss, former Luxembourg Prime Minister Jean-Claude Juncker.

That represented a rare foray into a sensitive topic. Normally national capitals set tax policy, and Brussels can only intervene if tax breaks constitute an unfair subsidy.

A suite of EU legal probes against the likes of Starbucks, Fiat Chrysler and Amazon saw her badged as the EU’s “tax lady” who “really hates the USA” by then-US President Donald Trump.

Her crusade wasn’t too successful in the courts – though Vestager has argued it spurred further national and international reforms to close tax loopholes.

But it comes after the EU passed major new laws to rein in big tech, stopping anticompetitive behaviour by digital gatekeepers.

The judgments come at a crucial moment, as MEPs prepare to grill future candidates for EU tax and competition commissioners — a point of maximum influence for lawmakers in areas where they normally play a marginal role.

Google lost its initial appeal in the General Court, and tomorrow the higher-tier Court of Justice will give its final verdict.

In contrast, Apple won its case in 2020, implying it wouldn’t have to repay upwards of €13bn in back taxes to the Irish treasury.

But opinions produced for the bloc’s highest court in November and January suggested judges might now sway on the side of the Commission in both cases.