The European Commission will on Friday appeal against a court decision that quashed an order for Apple to pay back €14.3bn in tax advantages to Ireland in a landmark ruling that dealt a big blow to Margrethe Vestager, the EU’s executive vice-president in charge of competition policy.
Last July, the EU’s second-highest court ruled that officials in Brussels had been unsuccessful in showing “the requisite legal standard” that the tech giant had received an illegal economic advantage in Ireland with regards to its tax arrangements.
The defeat against Apple is seen as having been the biggest setback for Ms Vestager, who is serving her second term as competition commissioner. Legal experts in Brussels say the defeat has dimmed some of her “star quality” and she has been pushing hard for an appeal over the Apple ruling in internal meetings.
The appeal is likely to move to the European Court of Justice.
The Apple tax case was dismissed by the General Court on the grounds that not enough evidence had been provided by the commission of wrongdoing by Apple.
The commission is set to argue that the court is setting the bar “unreasonably high”, making it virtually impossible for Brussels to present any legitimate case in the future.
“This case is very important because it will set a precedent for cases we want to fight going forward,” said an EU official.
EU officials will seek to have clarity on what amounts to unfair tax treatment in their appeal, according to people with direct knowledge of the EU’s case before the courts.
The case is likely to take at least a couple of years before the parties receive a final decision by the courts, people with direct knowledge of the situation said.
Arguing against the commission, the court said: “The General Court considers that the commission did not prove, in its alternative line of reasoning, that the contested tax rulings were the result of discretion exercised by the Irish tax authorities.”
Antitrust experts in Brussels argued that the ruling in July discredited the European Union’s power to see cases through the courts.
The Apple tax case in Ireland is not the only significant case the commission has lost recently. In May, the General Court annulled a decision taken by Ms Vestager in 2016 to block a merger of two British telecoms companies on consumer interest grounds.
The ruling by the General Court overturned Brussels’ decision four years ago to block the £10.25bn takeover of Telefonica’s O2 network in the UK by Three, owned by Hong Kong’s CK Hutchison. It questioned the commission’s approach to merger interventions.
“These defeats tell Brussels that it better spend more time doing its homework,” said an antitrust expert.