The EU’s competition regulator has officially closed investigations into Amazon, Starbucks, and Fiat, marking the end of high-profile cases over alleged unfair tax break advantages.
The closures follow a series of legal defeats for the European Commission in its efforts to crack down on multinational tax arrangements.
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Background of the Investigations
The European Commission began probing these companies in 2015 and 2017, alleging:
- Amazon and Fiat, based in Luxembourg, and Starbucks, based in the Netherlands, benefited from selective tax rulings that artificially reduced their tax liabilities.
- These arrangements were deemed by the Commission as violations of the EU’s state-aid rules, which prohibit unfair advantages for specific companies.
However, between 2019 and 2023, EU courts overturned the Commission’s findings. It cited errors in the investigations and insufficient evidence that the tax rulings provided selective advantages.
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Symbolic Closure of Probes
The formal closure of the cases on Thursday is largely symbolic, as the EU courts had already nullified the Commission’s decisions.
These cases had been central to departing Competition Commissioner Margrethe Vestager’s efforts to challenge aggressive tax-planning practices among multinational corporations operating in Europe.
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Impact of Court Decisions
The court rulings undermined the Commission’s initial efforts to use state-aid rules to address tax deals. Specifically:
- The Luxembourg-based judges found the Commission failed to demonstrate how the tax rulings constituted a selective advantage for Amazon, Fiat, and Starbucks.
- These defeats raised questions about the EU’s ability to enforce its competition rules in cases involving complex corporate tax arrangements.
Apple’s Case Revives Momentum
The Commission’s campaign against corporate tax deals gained renewed traction in September. EU judges ordered Apple to pay €13 billion (about $13.74 billion) in taxes to Ireland.
This ruling upheld the Commission’s stance on certain aggressive tax practices. It also established a benchmark for evaluating tax-planning cases moving forward.
Vestager’s Legacy
Margrethe Vestager, who spearheaded these investigations, is set to leave her position at the European Commission in the coming days.
Her tenure has been defined by ambitious attempts to hold multinational corporations accountable for their tax practices.
However, some of her efforts have faced significant judicial pushback.
Looking Ahead
While the closure of these probes signals the end of the Amazon, Starbucks, and Fiat cases, the Commission’s approach to challenging corporate tax deals is far from over.
The Apple decision provides a renewed framework for scrutinizing tax rulings, setting the stage for future investigations into multinational tax practices within the EU.
