EU, the tech giant slayer: Google loses $2.7 bn antitrust appeal, Apple sees $14.3 bn tax setback
Sept. 10, 2024, 5:21 p.m.
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The European Union has scored two significant victories over major tech companies, Google and Apple, on Tuesday. This comes after a prolonged period of legal battles, highlighting the EU's increasing efforts to regulate the world's largest technology giants.
In a blow to Google, the European Union’s top court rejected the tech giant’s final appeal against a €2.4 billion ($2.7 billion) antitrust fine imposed by the European Commission. The ruling upheld the penalty for Google’s violation of antitrust rules through its comparison shopping service, a case that dates back over a decade. The ruling sets a significant precedent as the EU intensifies its scrutiny of tech monopolies.
Advertisement On the same day, Apple received a significant financial blow when the European Court of Justice ruled that the company must repay €13 billion ($14.34 billion) in back taxes to Ireland. The European Commission had previously determined that Ireland provided illegal state aid to Apple, enabling the company to avoid paying billions in taxes owed under EU law. Apple had previously challenged the ruling but now has no further legal recourse.
These decisions are seen as significant victories for outgoing European Commissioner for Competition Margrethe Vestager, who has spent a decade leading the EU’s aggressive campaign to curb the power of Big Tech. Vestager is expected to step down in November.
Apple and Google are not the only tech giants that the European Commission has targeted for potential antitrust actions. Companies like Meta, Amazon, and Microsoft are also under scrutiny.
Meta to face hefty fine soon?
On July 25, Reuters reported that Meta is expected to face its first EU antitrust fine for tying its classified advertisements service, Facebook Marketplace, to its social network. The European Commission had accused Meta of unfairly bundling the services, giving Marketplace an advantage over competitors. While the fine could potentially reach $13.4 billion, equivalent to 10 per cent of Meta’s global revenue in 2023, penalties in such cases typically fall well below the maximum cap.
Advertisement In a separate case, the Commission has also accused Meta of violating the Digital Markets Act (DMA) by implementing an advertising model that requires users to pay or consent to data tracking. The outcome of this case is anticipated in the coming months.
Microsoft in EU’s crosshairs
Meanwhile, Microsoft has also found itself caught in the regulatory crosshairs. On July 10, the company relinquished its board observer seat at OpenAI, the creator of ChatGPT, amid concerns from antitrust regulators in the EU, UK, and US regarding its $10 billion investment in the AI company. This move followed scrutiny directed at Microsoft's integration of AI services within its ecosystem.
In a separate development in June, the European Commission accused Microsoft of illegally combining its Teams communication app with its Office suite, calling for a more distinct separation of these services.
Amazon faces compliance pressure
Amazon, too, is under the EU’s watchful eye. In July, the European Commission asked the e-commerce giant to provide details about how it is complying with the bloc’s Digital Services Act (DSA), particularly regarding transparency in its recommendation algorithms. This comes after Amazon lost a bid in March to delay implementing key parts of the DSA, which regulates content moderation and online transparency across Europe.
With antitrust penalties, legal battles, and new regulations targeting the digital economy, Europe is sending a clear message to Silicon Valley: the era of unbridled dominance is over.
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