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EU court rules against Apple’s tax deal and Google’s market practices

In a significant victory for European regulators, the EU’s top court upheld rulings against Apple and Google, marking key moments in the ongoing battle against Big Tech. Margrethe Vestager, the EU’s antitrust chief, has been at the forefront of efforts to challenge multinational companies benefiting from tax deals and engaging in anti-competitive behaviour. On Tuesday, the courts sided with her in two major cases involving Apple’s tax deal with Ireland and Google’s market practices.

The Apple case, which dates back to 2016, revolved around 13 billion euros ($14.4 billion) in back taxes. The European Commission argued that Apple’s arrangement with Ireland allowed the tech giant to pay an artificially low tax rate, at times as low as 0.005%. The Luxembourg-based Court of Justice agreed, confirming that Apple had received unlawful state aid and Ireland must recover the amount. Apple expressed disappointment, arguing that its income had already been taxed in the US and that the EU was attempting to change the rules retroactively.

Ireland, too, had challenged the ruling despite benefiting from the corporate taxes of large tech companies. The country’s low tax rates had attracted giants like Apple to establish European headquarters there. However, in a shift that signals broader changes in global tax policy, Ireland has since agreed to align with new international tax standards, even though its multinational tax take continues to grow.

On the same day, the European Court also ruled against Google in a separate antitrust case. In 2017, the European Commission fined Google 2.42 billion euros for abusing its market dominance by promoting its shopping service over smaller European rivals. Google appealed the decision but was met with a firm rejection. The court ruled that Google’s practices were discriminatory and did not constitute fair competition on the merits. Google, like Apple, voiced disappointment with the decision, though it claimed to have changed its business practices since the original ruling.

The ruling adds to the 8.25 billion euros in antitrust fines Google has accumulated in Europe over the past decade. The company continues to face scrutiny, with ongoing cases related to its Android operating system and AdSense advertising platform and an investigation that could lead to selling parts of its adtech business.

Why does this matter?

The decisions against Apple and Google reflect a broader movement within Europe to challenge the power of Big Tech. These cases are part of a growing trend where governments seek to hold multinational companies accountable for their tax practices and market behaviours. Other major corporations, such as IKEA and Nike, are also under investigation for their tax arrangements as regulators across the globe attempt to reshape the corporate landscape and foster a fairer competitive environment.

Israeli quantum tech startup secures $50 million in funding

Israel-based startup Quantum Source has secured $50 million in funding to advance the development of quantum computers that utilise light-based technology. That approach, which generates photons for data processing, promises to be more efficient than traditional methods. By allowing quantum systems to operate at room temperature, Quantum Source’s technology eliminates the need for bulky, costly cooling systems, making it easier to deploy in standard data centres.

CEO Oded Melamed explained that their method offers significantly greater efficiency, potentially making quantum computers smaller and more practical for widespread use. The company plans to use the new funding to build a complete quantum system capable of generating millions of qubits, the essential units of quantum computing.

The funding round was led by California-based Eclipse and included investments from Standard Investments, Level VC, and Canon Equity. Since its founding in 2021, Quantum Source has raised $77 million and currently employs 45 people in its Tel Aviv suburb office.

Irish government responds to Apple tax ruling as a historical matter

The Irish government responded to a European court ruling on Tuesday that found it had granted Apple unlawful tax benefits, stating the issue is now ‘of historical relevance’ due to changes in its tax system. The ruling stems from a 2016 European Commission order requiring Ireland to recover 13.8 billion euros from Apple, which had benefited from Irish tax rulings that reduced its tax rate to as low as 0.005% in 2014.

Ireland has consistently contested the order, asserting it does not offer preferential tax treatment to companies. However, the Court of Justice of the European Union upheld the decision, confirming that Apple paid insufficient taxes and that more needed to be recovered.

Since the 2016 ruling, Ireland has significantly reformed its corporate tax laws, aligning with international agreements and addressing corporate residence and profit attribution for non-resident companies operating in the country. The government will now begin releasing funds from the escrow account holding the recovered amount.

Google loses appeal over €2.42 billion EU fine

Google has lost its appeal against a €2.42 billion fine imposed by the EU over antitrust violations. The European Commission initially penalised Google in 2017 for giving its price comparison service an unfair advantage over smaller competitors. Despite challenging the decision, the Luxembourg-based Court of Justice of the EU upheld the ruling, emphasising that while dominance is not illegal, its abuse to hinder competition is prohibited.

The fine is part of a larger pattern for Google, which has faced fines totalling €8.25 billion over the last decade for various antitrust violations. Two additional cases involving Google’s Android system and AdSense are still pending decision. At the same time, a separate investigation threatens to force the tech giant to sell off part of its advertising technology.

The ruling highlights the EU’s firm stance on competition as regulators continue to scrutinise the practices of dominant tech companies like Google.

Apple loses €13 billion EU tax case

Apple has lost its battle with the European Union over a €13 billion tax payment dispute, marking a major win for the EU regulators. The European Commission initially ordered the payment in 2016, accusing Apple of benefiting from favourable Irish tax rulings that significantly reduced its tax obligations. These sweetheart deals allowed Apple to pay as little as 0.005% tax in 2014.

Apple and Ireland challenged the decision, arguing that the ruling defied logic, especially since Ireland’s low tax rates were instrumental in attracting major tech firms. However, the Court of Justice of the EU upheld the Commission’s order, declaring that Ireland had provided Apple with illegal state aid, which now must be repaid.

Apple expressed disappointment, accusing the EU of retroactively changing tax laws and arguing that its income had already been taxed in the US. The final and non-appealable ruling is a significant step in the EU’s efforts to clamp down on favourable tax deals for multinational corporations.

Beijing condemns Dutch move to align with US chip restrictions

China has expressed dissatisfaction with the Dutch government’s decision to extend export controls on ASML’s chipmaking equipment. The Dutch government announced it would expand licensing requirements on ASML’s 1970i and 1980i DUV lithography machines, aligning its policies with the US export restrictions introduced last year.

China has criticised Washington’s efforts to pressure allies like the Netherlands and Japan to impose restrictions that limit Chinese access to advanced semiconductor technologies. Beijing described the move as part of the United States strategy to maintain global dominance and strongly opposed the measures.

In its statement, China urged the Netherlands to avoid abusing export controls, emphasising that such actions could harm Sino-Dutch cooperation in the semiconductor sector and damage business interests on both sides. Dutch Trade Minister Reinette Klever defended the decision, saying it was made in the interest of safety.

The Dutch restrictions have effectively blocked ASML, the world’s largest chipmaking equipment supplier, from sending its most advanced lithography systems to China, impacting China’s ability to produce cutting-edge semiconductors.

Federal Bureau of Investigation cryptocurrency fraud report 2023

In 2023, the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) reported a significant rise in financial fraud involving cryptocurrencies such as bitcoin, ether, and tether. The IC3 received over 69,000 public complaints about cryptocurrency fraud, resulting in estimated losses exceeding $5.6 billion.

The report highlights that investment scams are the most pervasive form of cryptocurrency exploitation, responsible for nearly 71% of all cryptocurrency-related losses. Call centre frauds, including tech support scams and government impersonation schemes, accounted for about 10% of these losses. The decentralised nature of cryptocurrencies, coupled with the speed and irreversibility of transactions, makes them particularly attractive to criminals and poses substantial challenges in recovering stolen funds.

IC3 plays a central role in aggregating and analysing these complaints to identify trends and develop strategies to combat fraud. Timely and accurate complaint reporting is crucial for aiding law enforcement in their investigations.

New iPhone features Arm’s advanced chip design

Apple’s upcoming iPhone, featuring the A18 chip, has been developed using Arm’s latest V9 chip design, according to a report from the Financial Times. The device is expected to be unveiled at Apple’s event in Cupertino, California, on Sept. 9, where updates to other products and apps will also likely be revealed.

Apple and Arm have a longstanding partnership, with the two companies recently signing a deal that extends beyond 2040. Arm’s V9 chip technology has played a crucial role in powering Apple’s custom chip designs for iPhones, iPads, and Macs.

Arm, owned by SoftBank, controls the intellectual property behind much of the world’s smartphone chip architecture. The company’s V9 design accounts for half of global smartphone revenue, making it an industry leader in chip innovation.

Apple’s history with Arm dates back to the early 1990s when it helped found the firm. Despite the failure of the Newton handheld computer, which used an Arm-based processor, the collaboration evolved into the development of highly successful mobile devices.

US DoJ takes Google to court over monopoly

Google is facing another antitrust battle in a Virginia court, where the US Justice Department has accused the tech giant of monopolising the online advertising industry. Prosecutors argue that Google controls the infrastructure that handles hundreds of thousands of ad sales each second, using its size and dominance to push out competitors and restrict customer choice.

The trial, which US District Judge Leonie Brinkema is hearing, focuses on claims that Google acquired rivals and manipulated market transactions to gain control over both advertisers and publishers. The government’s case highlights how Google allegedly stifled competition and locked customers into its products, tactics reminiscent of traditional monopolies.

Google’s defence, led by attorney Karen Dunn, refuted the accusations by arguing that the case is based on outdated market conditions. She noted that Google now faces significant competition from other major tech companies like Amazon and Comcast and that its tools have evolved to work alongside its rivals.

As the trial progresses, prosecutors push for Google to be forced to sell off essential parts of its ad business, including Google Ad Manager. The case is part of a broader effort by US authorities to curb the dominance of Big Tech, with other lawsuits targeting companies such as Apple, Meta, and Amazon.

UK regulator accuses Google of abusing ad market power

The UK’s antitrust regulator, the Competition and Markets Authority (CMA), has accused Google of abusing its dominant position in digital advertising, restricting competition in the sector. According to the CMA, Google’s practices, which allegedly favour its ad exchange platform, have hurt British publishers and advertisers, impacting their ability to generate revenue through digital ads. The regulator’s provisional findings suggest that Google has been using its influence in the advertising market’s buying and selling sides since 2015.

The CMA highlighted the potential harm these practices could cause businesses relying on online ads to fund their websites and apps, reaching millions across the UK. Juliette Enser, interim executive director of enforcement, stressed that this anti-competitive behaviour undermines free or lower-cost digital content. In response, Google disagreed with the CMA’s conclusions, arguing that its advertising tools support businesses of all sizes in a highly competitive industry.

The issue is part of a larger global scrutiny of Google’s advertising practices, with similar investigations underway by the US Department of Justice and the European Commission. In 2023, the EU regulators even suggested that Google might need to sell parts of its adtech business, though the company dismissed this idea as disproportionate. The CMA is now set to review Google’s response before deciding on possible fines or other legal actions to end the infringement.