Michael Lee, founder of Michael Lee Strategy, analyzes Nvidia's stock valuation and the market impact of the EU antitrust fine.
Apple and Google each suffered defeats on Tuesday in their defense against European Union efforts to curb the dominance of big tech companies.
The European Court of Justice, the European Union's highest court, sided with the European Commission, the EU's executive arm, in a case that ordered Apple to pay about $14 billion in back taxes to Ireland. The high court also upheld a $2.7 billion fine imposed on Google for alleged antitrust violations.
An Apple sign on Fifth Avenue on Wednesday, May 15, 2024 in New York City. (Photographer: Michael Nagle/Bloomberg via Getty Images/Getty Images)
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| AAPL | Apple Inc. | 220.91 | +0.09 |
+0.04% |
In 2016, the EC ordered Apple to pay 13 billion euros ($14.4 billion) in back taxes to Ireland, arguing that the iPhone maker had benefited from two Irish tax penalties that artificially reduced its tax burden for more than two decades. Both Apple and Ireland appealed the ruling, which was set aside in 2020, but the EC appealed back and won a final ruling on Tuesday.
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In a statement, Apple said it was disappointed with the ruling.
“This case is not about how much tax we pay, but which government we owe it to,” the statement said. “We have always paid all taxes due wherever we do business and there have never been any special arrangements.”
On January 10, 2024, the Google logo was displayed at the Google House at the annual consumer electronics trade show CES 2024 in Las Vegas. (REUTERS/Steve Marcus/File Photo/File Photo/Reuters Photo)
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Alphabet Inc. | 149.54 | -2.39 |
-1.57% |
|
The case against Alphabet Inc's Google dates back to 2017, when the European Commission fined the world's largest search engine for using its price comparison shopping service to gain an unfair advantage over smaller European rivals.
A lower court had upheld the EU competition authority's decision in 2021, which Google had appealed. Judges at the European High Court sided with the EC on Tuesday, ruling that EU law does not recognise the existence of a dominant position, but rather its unfair exploitation.
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“In particular, advantageously positioned companies will be prohibited from engaging in conduct that could undermine merit-based competition and harm individual companies and consumers,” they said.
Google expressed disappointment with the ruling, with a spokesperson telling The Wall Street Journal: “This ruling concerns very specific facts, and we made changes in 2017 to comply with the European Commission's decision.”
European Union antitrust chief Margrethe Vestager took to social media to declare victory over the ruling against the US tech giant.
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In separate posts on X on Tuesday, Vestager called the Apple ruling “a major victory for European citizens and tax fairness” and the Google decision “a major victory for digital fairness.”
Reuters contributed to this report.
