In 2016, the EU's antitrust regulators said that Apple had used illegal deals with the Irish government to avoid taxation on its products sold in the EU. This arrangement was found to amount to an illegal subsidy that was not available to Apple’s competitors – Ireland was ordered to recover 10 years of back taxes, which amounts to $14.9bn at current conversion rates.
Apple has used Cork in Ireland as its European headquarters since 1980. Despite facing a budget deficit, the Irish government had opposed the judgment. “Ireland has always been clear that there was no special treatment,” Ireland’s Department of Finance said in a statement. “The correct amount of Irish tax was charged in line with normal Irish taxation rules.”
The decision on Wednesday by the General Court of the European Union in Luxembourg found that the antitrust regulators' argument was flawed and that they had been “wrong” to conclude Apple had been granted “selective economic advantage.” The decision may be appealed in Europe's highest court.
Apple celebrated the new ruling, with its CEO Tim Cook previously having deemed the 2016 decision “total political crap”, but it comes as a blow to Margrethe Vestager, the European Commission’s top antitrust enforcer who has targeted what she deems unfair tax deals as a central element of her leadership of the European Commission’s competition office.
The ruling may encourage other tech giants in their appeals against Vestager. Google is currently appealing three antitrust decisions brought by Vestager's office that amount to fines worth $9.4bn, while Amazon is appealing a 2017 ruling that it owes Luxembourg €250m in unpaid taxes.