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european commission
‘Long-Overdue Justice’: EU Court Rules Ireland Let Apple Avoid $14.4 Billion in Taxes
"This ruling exposes E.U. tax havens' love affair with multinationals."
Sep 10, 2024
The European Union's highest court on Tuesday ruled that Apple must pay €13 billion in back taxes to Ireland, determining that the country gave the company illegal tax benefits in the past, in what campaigners called a victory for tax justice.
The E.U. Court of Justice ruling brought to a close a landmark case that began in 2016 when the European Commission ordered Apple to pay the €13 billion ($14.4 billion) based on an unfair tax arrangement the company had with Ireland from 1991 until 2014. A lower court overturned the commission's order in 2020, but Tuesday's ruling, which is final, restores it.
Observers viewed the case as among the most important brought by E.U. Competition Commissioner Margrethe Vestager, an antitrust official who's been in office since 2014.
"It's important to show European taxpayers that once in a while, tax justice can be done," Vestager, who leaves office in two weeks, said following Tuesday's ruling.
Chiara Putaturo, a tax policy adviser at Oxfam EU, said in a statement that "this ruling exposes E.U. tax havens' love affair with multinationals. It delivers long-overdue justice after over a decade of Ireland standing by and allowing Apple to dodge taxes."
Today is a huge win for European citizens and tax justice.
👉In its final judgment, @EUCourtPress confirms @EU_Commission 2016 decision: Ireland granted illegal aid to @Apple.
Ireland now has to release up to 13 billion euros of unpaid taxes.
— Margrethe Vestager (@vestager) September 10, 2024
The European Commission argued that the selective tax benefits that Ireland had offered to two Apple subsidiaries amounted to illegal state aid that hindered competition. The company's tax burden in Ireland, where its European operations have been based since 1980, was as low as 0.005% of its profits in 2014.
In November of last year, Giovanni Pitruzzella, the advocate general of the E.U. Court of Justice, issued an opinion in favor of the commission's position and against the lower court ruling, in a setback for the tech giant. The high court, which is based in Luxembourg, generally agrees with its advocate general following such recommendations, as it ultimately did on Tuesday.
The €13 billion, plus interest, has been held in an escrow account since 2018 and will be released to Ireland, even though the country fought against the commission's order. Ireland said it would respect the court ruling.
Ireland is often characterized a tax haven within the E.U. and hosts the European headquarters for many multinational firms, with critics charging that its tax system drives up inequality.
Tax justice campaigners said Tuesday's ruling should just be a start and that more fundamental reforms are needed at the international and E.U. level.
"Our tax problem is more than just one rotten apple," Tove Maria Ryding, a policy manager at the European Network on Debt and Development, said in a statement.
"The international system for taxing multinational corporations continues to be deeply complex, unpredictable and unfair," she added, arguing that a company's economic activity across many countries, including in the Global South, shouldn't mean tax revenues only for one country such as Ireland.
Ryding praised the United Nations' efforts to establish a global tax convention, calling the proposal a "beacon of hope for a fairer future."
Putaturo of Oxfam likewise called for a fairer tax system in Europe.
"While this ruling will force the tech giant to pay its debt, the root of the issue is far from solved," she said. "E.U. tax havens can still make sweetheart tax deals with big multinationals. The duty to stop this rests on the shoulders of E.U. policymakers. Yet, they have turned a blind eye to tax havens within their borders and the harmful race to the bottom that countries like Ireland are instigating."
Oxfam EU also called for the closing of tax loopholes and the establishment of a wealth tax.
The Apple case was not the only victory for Vestager, the antitrust chief, on Tuesday: The E.U. Court of Justice also ruled that Google had illegally used its search engine dominance to favor its own shopping service, fining the company €2.4 billion ($2.65 billion).
Bloomberg on Tuesday called it a "double boost to the European Union’s crackdown on Big Tech," and said that Vestager's past work had "paved the way" for the U.S. and the U.K. to take action against Google.
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Scientists Blockade EU Commission Offices to Demand Degrowth
Amid elections in Europe, opponents of ongoing planetary destruction argue that the "science is clear: politicians' obsession with infinite economic growth is leading us straight to disaster."
Jun 07, 2024
A group of about 20 scientists and allies on Friday blocked the doors to the European Commission office in Brussels to demand degrowth policies as European Union elections unfold in which no party has such an agenda and pro-environment candidates are expected to lose seats.
The degrowth advocates, who came from Scientist Rebellion and affiliated groups, called for the EU to stop using Gross Domestic Product as an index of prosperity and an end to "over-consumption and the advertising that drives it," among other demands. Carrying placards with messages such as "Green growth is a myth," they prevented employees of the European Commission, the executive branch of the EU, from getting to work Friday morning, they said in an emailed statement.
Wolfgang Cramer, an environmental geographer at the Mediterranean Institute for Biodiversity and Ecology in France and an Intergovernmental Panel on Climate Change (IPCC) author, supported the action from a distance.
"Economic growth is a concept that was useful almost 100 years ago to help politicians overcome the disaster of the 1929 world economic crisis," Cramer said, according to the statement. "Today, it has become a leitmotif to justify the destruction of our natural resources and to support the redistribution of wealth to the richest. What we need is an economic system that guarantees the well-being of everyone, while respecting the planet's limits. This is entirely possible if we have the political will."
The degrowth movement, which began in the 2000s following work in the field of ecological economics, seeks to address not only the climate crisis but also other ecological crises. Its proponents argue that economic growth is linked with energy and resource use—the more growth, the more difficult to stay within planetary limits on carbon emissions, or, for example, nitrogen and phosphorous use, they argue.
Degrowth is the subject of mockery in some legacy media outlets that hold economic growth sacrosanct and is a matter of fierce debate among leftist political thinkers, some of whom strongly oppose it. Despite the criticism, degrowth has grown in influence, especially in Europe, where the topic has moved from the "policy fringes" toward a "mainstream audience," Financial Timesreported last year. The economic paradigm questioning endless expansion has even received favorable mention in EU policy briefs and IPCC reports.
"It is unlikely that a long-lasting, absolute decoupling of economic growth from environmental pressures and impacts can be achieved at the global scale,” a European Environment Agency briefing says. "Therefore, societies need to rethink what is meant by growth and progress and their meaning for global sustainability."
Many climate policy researchers are in fact skeptical of "green growth" and support "growth agnostic" or degrowth policies, a 2023 study in Nature Sustainability found.
In a manifesto Scientist Rebellion pointed to on Friday, the group argued that, "The science is clear: politicians' obsession with infinite economic growth is leading us straight to disaster."
Científicos de @ScientistRebel1, @ExtinctionR y @growth_kills bloquearon esta mañana la entrada de la Comisión Europea. Lamentan que, en estas elecciones, ninguna partido proponga el decrecimiento como salida a la crisis climática.
Las 5 demandas:
1) Abandonar el PIB como… pic.twitter.com/y07yUjLxI2
— Andrés Actis (@ActisAndres) June 7, 2024
The group's Friday action comes on the second day of this week's EU elections, which run from Thursday to Sunday. Right-wing parties are pushing anti-environment messages with great success, The New York Timesreported Friday.
"The right wing is ascendant," according to the Times, which explained that the European Greens are polling poorly this year, after having won a record 10% of seats in the EU Parliament in 2019—a year of large climate protests, when the "zeitgeist was green."
That victory helped propel the EU toward the European Green Deal, a set of environmental laws and regulations centered around a legally binding target to reduce emissions by 55% by 2030.
However, inflation and high energy prices due to the war in Ukraine have changed some of the political dynamics. Rising prices have helped lead to what the European Council on Foreign Relations has called a “growing greenlash.”
Ahead of the elections, farmers' groups have protested regulations on agricultural pollutants, showing that "agriculture has been instrumentalized by the populist and hard-right groups throughout the 27-nation bloc," The Associated Pressreported.
Yet climate activist groups remain determined to push forward. Scientist Rebellion seeks to draw attention to what it sees as the blind spots in the political platforms of even Europe's left-wing and green parties.
"We deplore the fact that virtually no party is proposing a program that is up to the social and environmental challenge," said Laura Stalenhoef, a Ph.D. candidate in cognitive psychology in Germany who took part in Friday's action. "But we do not just denounce political inaction, we put forward concrete proposals for change: we urgently need to abandon GDP as an index of prosperity and organise a voluntary contraction of the economy before we witness ecological and social collapse."
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'The Law Is the Law': EU Investigates Apple, Google, Meta for Anti-Monopoly Violations
"the days of these tech giants exploiting monopoly positions in different markets are over," said one expert.
Mar 25, 2024
The European Commission signaled Monday that it has no intention of waiting for powerful tech companies to change their practices in order to comply with a landmark anti-monopoly law passed by the European Union earlier this month, as officials informed Apple, Facebook parent company Meta, and Google parent company Alphabet that they were being investigated for potential violations.
"The law is the law," Thierry Breton, E.U. commissioner for internal market, told reporters at a press conference in Brussels announcing the probe. "We can't just sit around and wait."
The commission told the tech giants it is investigating whether Apple and Alphabet are complying with the Digital Markets Act's (DMA) measure requiring companies to allow users to be directed to offers available outside the firms' own app stores. The two companies may be imposing "various restrictions and limitations" on users to unfairly favor their own stores, including by charging fees to prevent apps from promoting offers outside the Apple and Google app stores.
The commission is investigating Meta's practice of allowing users to pay a monthly fee for ad-free versions of Facebook and Instagram, which allow them to avoid having their personal data used for ad-targeting.
"The commission is concerned that the binary choice imposed by Meta's 'pay or consent' model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers," said the European Commission.
Margrethe Vestager, executive vice president of the commission, said in Brussels that the companies have announced some steps to comply with the DMA, which took effect on March 7, but that some of the measures "fail to achieve their objectives and fall short of expectations."
Compliance "is something that we take very seriously," said Vestager.
The DMA identifies Alphabet, Apple, and Meta as three of six digital "gatekeepers" that are required to end anti-competition practices. New regulations require the companies to allow third parties to operate with the gatekeepers' own services, allow business users to access the data they generate when using the companies' platforms, allow users to un-install any pre-installed software or app if they choose to, and treat their own services and products equally to those offered by third parties.
The commission has 12 months to complete the investigations and could fine the multibillion-dollar companies up to 10% of their global revenue if they find them to be in violation of the DMA.
John O'Brennan, professor of European politics at Maynooth University in Ireland, said the investigation signals that "the days of these tech giants exploiting monopoly positions in different markets are over."
The E.U. fined Apple $1.8 billion earlier this month for suppressing competition from rival music streaming apps such as Spotify. The company is also under scrutiny in the U.S., with the Department of Justice joining 16 states last week in filing a lawsuit accusing Apple of illegally monopolizing the smartphone market.
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