A pair of tech giants suffered major legal blows today as the EU made two landmark legal rulings.
Both Google and Apple were in court trying to overturn huge fines levied close to a decade ago.
Yet both failed, prompting Executive Vice-President Margrethe Vestager to triumphantly announce: "Today is a big win for European citizens."
She added: "Dominant companies, as any other companies, are of course free to innovate in all fields, but in doing so, they should compete on the merits. However, they cannot lean on the competitive advantage that they hold because of their market power.
"Going forward, the Commission will make sure that the principles enshrined in this judgement – which is now final – are upheld for the benefit of all European consumers."
Today is a huge win for European citizens and tax justice.
— Margrethe Vestager (@vestager) September 10, 2024
👉In its final judgment, @EUCourtPress confirms @EU_Commission 2016 decision: Ireland granted illegal aid to @Apple.
Ireland now has to release up to 13 billion euros of unpaid taxes.
The European Union Court of Justice slapped down Google's appeal against a €2.4 billion (£2 billion) fine levied in 2016 over allegations it had favoured Google Shopping, its own retail comparison service, in search results over those provided by competitors.
At the time, it was the largest penalty the Commission had ever imposed - although in 2018 it then stung Google with a €4.3billion fine over claims it "imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search."
"The Court of Justice confirms that, in certain circumstances, the favourable treatment of its own services by a dominant company can be a breach of Article 102 TFEU," Vestager added. "This important judgment validates the Commission's approach to such practices. We call them “self-preferencing”.
In a statement, Google said it was "disappointed with the decision of the Court".
"This judgment relates to a very specific set of facts," a spokesperson said. "We made changes back in 2017 to comply with the European Commission’s decision.
"Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 comparison shopping services.”
READ MORE: Microsoft vulnerabilities have sprung up in Apple's walled garden, investigators claim
The Court of Justice also confirmed a decision the European Commission made in 2016, which ruled that Apple had underpaid tax of €13bn (£11bn).
Vestager added: "In its decision in 2016, the Commission concluded that two Irish tax rulings constituted illegal State aid. They had artificially lowered taxes paid by Apple in Ireland since 1991. The Commission considered this to be a misapplication of Irish tax rules and ordered Ireland to recover up to 13 billion euros from Apple.
"These tax rulings attributed the bulk of taxable profits - of two Irish subsidiaries of Apple - to stateless 'head offices'. These head offices existed only on paper. No tables, no chairs, no activities. The profits were thus not taxed anywhere."
In a statement, Apple said: "This case has never been about how much tax we pay, but which government we are required to pay it to. We always pay all the taxes we owe wherever we operate and there has never been a special deal.
"The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US.
"We are disappointed with today’s decision as previously the General Court reviewed the facts and categorically annulled this case."
Earlier this year, Apple was fined €1.8 billion (£1.5 billion) after the European Commission ruled the US firm abused its dominant position in the market for the distribution of music streaming apps to iPhone and iPad users through its App Store.
