BRUSSELS (Reuters) - EU antitrust regulators ordered Apple on Tuesday to pay up to 13 billion euros ($14.5 billion) in taxes plus interest to the Irish government after ruling that a special scheme to route profits through Ireland was illegal state aid.
The massive sum, 40 times bigger than the previous known demand by the European Commission to a company in such a case, could be reduced, the EU executive said in a statement, if other countries sought more tax themselves from the U.S. tech giant.
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“Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” said Competition Commission Margrethe Vestager, whose crackdown on mainly U.S. multinationals has angered Washington which accuses Brussels of protectionism.
Apple intends to appeal, of course, and may well succeed in bringing down the size of their back tax bill, but $14.5B is a non-zero percentage of their market cap, in addition to being an enormous sum of money in its own right, and Apple's stock dropped 0.77% on the news. The previous record was €300M from Swedish engineer Atlas Copco AB, for back taxes in Belgium. It would seem that the EU is all done fucking around with companies that flout the rules.
Microsoft is already facing regulatory action in France; if the scope of that official response were to expand to include the EU as a whole, a very real possibility, then the potential costs were already high. The size of this penalty against Apple, though, shows that the EU has an appetite for imposing large enough fines that even these huge multinationals will feel them; if Microsoft don't resolve their European regulatory issues quickly, then the potential costs now appear to be much, much higher than they were just yesterday.
I wonder if they're worried yet?