Google and Apple face legal defeats in Europe, owe billions in fines

LONDON — Google has officially lost its final attempt to overturn a substantial antitrust penalty imposed by the European Union. The ruling from the bloc’s highest court was delivered on Tuesday and marks a significant moment in the increased scrutiny directed towards large technology companies.

The European Union’s top court has dismissed Google’s appeal against a 2.4 billion euro (around $2.7 billion) fine handed down by the European Commission, the primary antitrust authority for the 27-member bloc. This penalty was related to violations of antitrust regulations linked to the company’s comparison shopping service.

On the same day, Apple faced a setback as well, having its challenge rejected regarding an order to repay 13 billion euros (approximately $14.34 billion) in back taxes to Ireland. This decision stemmed from a separate ruling by the European Court of Justice regarding illegal state aid provided to global corporations.

These rulings conclude the appeals process for both tech giants, which began several years ago. This outcome represents a notable win for European Commissioner Margrethe Vestager, who is set to depart from her position next month after a decade of overseeing competition policies.

Experts have indicated that these decisions illustrate a growing assertiveness among European regulators who have become more resolute in their oversight of the technology sector since these cases first emerged.

According to Alex Haffner, a competition law expert at Fladgate, the ruling concerning Apple underscores the EU’s readiness to impose its authority over big tech. He emphasized the importance of this development in signaling the collective strength of EU regulations.

Gareth Mills, a partner at Charles Russell Speechlys, further elaborated that the Google ruling indicates a heightened sense of confidence among global competition regulators concerning their oversight of major technology firms. He suggested that this decision will likely embolden regulators to take a firmer stance in the future regarding similar cases.

The fine imposed on Google was one of three significant antitrust sanctions enforced by the European Commission. This specific case originated in 2017 when it was determined that Google exhibited anti-competitive practices by steering users toward its own Google Shopping service instead of its competitors.

In response to the court’s ruling, Google expressed disappointment, stating that the decision pertains to a very specific context. The company mentioned that it has taken measures to adhere to the commission’s requirements and has been running auctions for shopping search listings to create a level playing field for competition.

Google emphasized that its compliance efforts have been effective over the past seven years, generating billions of clicks for over 800 comparison shopping services.

The European consumer organization BEUC welcomed the court’s decision, suggesting it highlights the ongoing relevance of the EU’s competition laws in the digital landscape.

Director General Agustín Reyna noted that this ruling is beneficial for European consumers, suggesting it will increase opportunities for smaller companies and enable them to compete without relying solely on Google to reach potential customers.

Despite this latest loss, Google continues to appeal two other antitrust cases in the EU. One involves a 2018 fine of 4.125 billion euros ($4.55 billion) related to its Android operating system, while the other concerns a 2019 penalty of 1.49 billion euros ($1.64 billion) tied to its AdSense advertising platform.

The outcomes of these cases have been significant indicators of escalating regulatory actions against the tech industry on a global scale. The European Union has initiated further investigations into major tech firms and introduced the Digital Markets Act, a new legislative framework aimed at preventing monopolistic practices.

Margrethe Vestager remarked that the Google shopping case was foundational in setting regulatory standards for digital companies and has inspired similar regulatory efforts around the world. She affirmed that the ‘no one is above the law’ principle applies to even the most powerful tech companies.

Looking ahead, Vestager assured that the commission will continue to pursue competition cases, reinforcing the importance of regulations like the Digital Markets Act to ensure consumer choice is preserved.

In addition to these challenges, Google is facing scrutiny from both the EU and the UK over its digital advertising practices. The U.S. Department of Justice is also in the process of taking the company to court over allegations regarding its dominance in ad tech.

On the other hand, Apple’s attempts to evade the repayment of its contentious tax bill were dismissed by the court, which upheld an earlier ruling against the company. This tax dispute dates back to 2016 and is viewed as a significant moment in the push for “tax justice,” according to Vestager.

The commission previously targeted companies like Amazon and Starbucks in similar tax-related cases, reaffirming its commitment to address undue advantages that allow corporations to minimize their tax liabilities globally.

The decisions from the EU courts have heightened tensions between technology firms and regulators, showcasing the growing determination of authorities to enforce fair competition in the digital economy.

Source: AP