Summary
Apple’s shares fell by 1.38% after the EU Court ruled that it must repay 13 billion euros in back taxes for receiving illegal aid from Ireland. Concurrently, Alphabet faced a 2.4 billion euros fine upheld by the EU for favoring its comparison shopping service, confirming ongoing regulatory challenges for tech giants in Europe.
Apple’s shares experienced a decline of 1.38% during premarket trading, priced at $217.86, following the recent unveiling of new products including the iPhone, Apple Watch, and AirPods. This downturn coincides with a significant ruling from the Court of Justice of the European Union, which upheld the 2016 decision made by the European Commission mandating that Ireland recover approximately 13 billion euros ($14.4 billion) in back taxes from Apple. The court stated, “Ireland granted Apple unlawful aid which Ireland is required to recover.” This ruling pertains to tax advantages extended to Apple under rulings made in 1991 and 2007, which the EU deemed as constituting illegal subsidies, given that Apple paid an effective tax rate as low as 0.005%. Similarly, Alphabet Inc. faced repercussions with the upholding of a 2.4 billion euros ($2.65 billion) penalty related to its market behaviors. The European Union’s top court affirmed a previous decision from the General Court, which determined that Google had misused its dominant market position by favoring its own comparison shopping service over those of competitors. Google’s attempt to appeal this decision did not succeed. Consequently, Alphabet’s Class A shares saw a 0.46% decrease, trading at $148.02 during the same premarket session.
The recent rulings serve as a continuation of heightened scrutiny from the European Union towards large technology companies regarding their tax payments and anti-competitive practices. The case against Apple centers on the aggressive tax strategies employed by the company that were deemed to exploit loopholes in Ireland’s tax legislation. This decision marks a significant reinforcement of the EU’s stance against what it considers detrimental tax practices among multinational corporations. On the other hand, the case against Google highlights regulatory efforts to ensure fair competition within the online market, underscoring the EU’s commitment to curbing monopolistic behaviors among tech giants.
In summary, both Apple and Alphabet are facing substantial financial penalties following the rulings from the European Union’s highest court. Apple’s obligation to repay 13 billion euros in taxes from Ireland underscores the ongoing scrutiny of corporate tax practices, while Google’s upheld fine serves as a stern warning against anti-competitive market behaviors. These developments are indicative of the EU’s aggressive regulatory posture aimed at maintaining fair market conditions and ensuring proper tax compliance among the region’s most powerful corporations.
Original Source: www.benzinga.com
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