posted by Thom Holwerda on Tue 30th Sep 2014 09:20 UTC
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We already reported on this one yesterday, but it's official now: after a preliminary investigation, the EU has accused Ireland of providing illegal state aid to Apple by means of Apple-specific low tax rates which the EU states do not conform to market standards. In addition, while there are certain specific cases in which state aid is legal, none of those seem to apply in this case. These cases cover things like aid to severely impoverished regions, natural disaster relief, important projects of common European interest, and similar things.

At this stage, the Commission considers that the measure at issue appears to constitute a reduction of charges that should normally be borne by the entities concerned in the course of their business, and should therefore be considered as operating aid. According to the Commission practice, such aid cannot be considered compatible with the internal market in that it does not facilitate the development of certain activities or of certain economic areas, nor are the incentives in question limited in time, digressive or proportionate to what is necessary to remedy to a specific economic handicap of the areas concerned.

Possible fines, which could run in the billions of euros, would be on Apple. So, unlike what some of our readers vehemently claimed - "There is no possibility of a fine upon Apple whatsoever" - Apple could very well end up paying billions of euros.

The Commission wishes to remind Ireland that Article 108(3) of the Treaty on the Functioning of the European Union has suspensory effect, and would draw your attention to Article 14 of Council Regulation (EC) No 659/199935, which provides that all unlawful aid may be recovered from the recipient.

This is only the beginning. Several other companies and countries - Google, Starbucks, The Netherlands, Luxembourg - are also under investigation, and will likely face similar proceedings in the near future.


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