Apple Ordered to Pay $14 Billion in Back Taxes

Apple will be required to pay $14 billion in back taxes to Ireland after Europe’s top court released a new ruling on Tuesday, according to a report from the Financial Times. Apple CEO Tim Cook has previously called the case “total political crap” but the judgment is final and Apple will not be able to appeal.

The European Commission’s executive vice president, Margrethe Vestager, first brought the case against Apple alleging that Ireland had given the tech company a deal that “constituted illegal State aid,” by waiving so much in taxes. Apple is now on the hook to pay those taxes, which have been sitting in an escrow account for the past six years, according to the Financial Times. Oddly enough, the original €14.3 billion set aside has fallen in value after first being set aside in 2018 because it was invested in European government bonds.

Vestager, who has been very aggressive against Silicon Valley companies engaging in what she calls anti-competitive behavior, has acknowledged that it’s nothing new when countries like Ireland give large firms sweetheart deals. But in this case, she insisted it was unfair to other countries.

The ruling was a blow to Apple after the tech giant had previously won an appeal in a lower court in 2020, reversing an original ruling against Apple in 2016. The European Court of Justice affirmed the ruling from 2016, writing that, “Ireland granted Apple unlawful aid which Ireland is required to recover.”

The European Union has been a contentious place for large American tech companies hoping to benefit from tax breaks and other perks that come with being an enormous corporation that can promise jobs and investment. In the U.S., many Silicon Valley companies get a stern talking to in the media and during government hearings, but ultimately see very little in the way of regulation. But in Europe, there is no home field advantage for companies like Apple, Google, and Meta. When European regulators say they will cut down on anti-competitive behavior, it’s not just talk.

What’s happening right now in the world of regulating Big Tech in the U.S.? Forty-two attorneys general have endorsed a plan to add warning labels to social media about the potential harms to the mental health of children, according to the Washington Post. We promise you that large companies are much more concerned about paying $14 billion than they are about a stupid little label getting added to social media products.

Vestager has been the EU’s top competition regulator for a decade now and is widely expected to step down at some point soon, according to the Financial Times. But it remains to be seen whether anyone who fills her shoes will be any less aggressive.

“Today marks a step forward. And it’s encouraging,” Vestager said in a statement posted online after the Apple ruling. “It is encouraging for us to do more. The Commission will continue its work on harmful tax competition and aggressive tax planning. Both in terms of legislative proposals and enforcement. We will implement what we have decided.”