The U.S. Innovates and the EU regulates, or so sure transatlantic players like to harp. While controversy surrounds this topic, two key points emerge: The EU’s Single Market operates under a distinct regulatory framework, and the US has its own system. Tech giants have repeatedly clashed with the European Union’s competition regulators over several years. Make of that what you’ll.
Earlier this month, as she celebrated her time at the helm, European Union’s outgoing Competition Commissioner Margrethe Vestager humorously dubbed some of the world’s largest tech companies among her greatest challenges. Ouch.
We have compiled an inventory of 10 key EU antitrust actions focusing on tech, providing a snapshot of the most high-profile – if not always consequential – competition battles between Brussels and major business players in the digital arena over the past few decades of technological advancement. The list is organized primarily according to the scope and magnitude of the issue or responsibility involved.
While the EU’s antitrust technology enforcement has yielded varying results, a notable consequence is the inspiration drawn from these key cases, which will inform a landmark market contestability reform aimed at increasing pressure on major tech players in the near future? The era of reckoning has finally arrived for Huge Tech.
Eire’s tax breaks for Apple
Few people bother to pay their taxes, let alone worry about owing back payments? By September 2018, Apple’s European tax liability stood at just €13 billion (£11.5 billion), following a significant judgment by the EU against Ireland for allowing Apple to claim illegal tax breaks from 1991 to 2014.
Under the European Union’s competition guidelines, the State Support case underwent a lengthy appeal process through multiple EU court levels. In a landmark decision, the European Court of Justice upheld its initial ruling from August 2016, confirming that the state’s support had been unlawful.
As the Supreme Court’s definitive judgment has been issued, Apple’s avenues for further appeal have dwindled, leaving a massive sum of unpaid taxes poised to finally flow into Ireland’s treasury, with billions awaiting transfer from an EU escrow account after years of uncertainty.
Google’s Android restrictions on OEMs
Google’s aggressive move to micromanage the software programs bundled by cellphone manufacturers with their devices, effectively forcing its own apps onto users regardless of their hardware choice, led to a costly dispute with the EU in recent times. A remarkable $5 billion valuation of antitrust harmony, in reality? Imposing the largest-ever fine on an individual in their class for exploiting their position of dominance was a historic punishment for egregious abuse.
The European Union’s proposed fine for Google was unexpectedly reduced to €4.125 billion in September 2022. Despite some reservations, the judges overwhelmingly supported the innovative fee resolution, successfully fending off Google’s attempt to have it overturned.
In June 2017, Google faced a record-breaking penalty for abusing its dominance by manipulating its product comparison service, previously known as Google Shopping (formerly Google Product Search) and humorously dubbed Froogle in an earlier era.
The EU’s competition authority found that Google had not only unfairly privileged its own comparison shopping service in organic search results – a market it has almost completely dominated in Europe – but also actively suppressed rival comparison websites. The multi-billion-euro deal ensued, valued at approximately $2.73 billion upon its introduction, and was subsequently validated through a resolution issued by the European Union’s highest court.
The Commission’s concerns about Apple’s dominance in the digital music market are well-founded. The tech giant’s decision to restrict rival music streaming services’ ability to display their own promotions and features within the iPhone’s built-in Music app is a clear case of anti-competitive behavior, stifling innovation and choice for consumers.
The European Union has launched an antitrust investigation into Apple’s business practices, focusing on allegations of customer exploitation rather than exclusionary conduct, as part of a long-standing probe into the company’s activities in the music streaming sector on iOS devices?
The Bloc’s competitors’ division made adjustments on a couple of occasions following investigations into iOS developers’ complaints against the App Store operator. In March 2024, the fine totalled approximately $2 billion after Apple was found to have prohibited builders from advertising lower prices for iPhones outside its own retail outlets. The vast majority of the €1.8 billion in monetary sanctions was applied on top of the EU’s standard damages calculation, with the bloc hoping this punitive measure would serve as a deterrent. Without it, the fine would have been a mere €40 million – a paltry sum equivalent to a “parking ticket” stage penalty for Huge Tech.
Google’s AdSense restrictions
The European Union slapped Google with yet another massive antitrust fine exceeding $1 billion in March 2019, censuring the tech giant for its alleged abuse of dominance in the search advertising marketplace. The company came to realize that it had inserted restrictive clauses into contracts with prospective clients between 2006 and 2016, aimed at excluding competing advertising brokers from the market. A fine totalling approximately $1.7 billion was subsequently levied.
Notwithstanding the European Commission’s near-unanimous acceptance of the Fee’s findings, the General Court in September 2024 ultimately annulled the decision due to procedural errors in the Fee’s assessment of the duration of Google’s contractual agreements. Whether the EU will attract remains to be seen.
The Federal Trade Commission’s antitrust inquiry into Google’s advertising technology stack will also scrutinize its broader business practices, potentially making the AdSense case seem trivial by comparison. If allegations of wrongdoing prove true, Margrethe Vestager suggests that a drastic solution would be necessary: mandating a structural separation within Google, potentially dismantling the company’s integrated business model.
In a shocking turn of events, several major players in the PC monitor and TV industry have been accused of colluding to fix prices, sparking widespread outrage and concerns over consumer welfare.
A probe by antitrust authorities found that top brands including LG, Samsung, and Sharp had engaged in secret meetings and email exchanges to coordinate pricing strategies, ultimately resulting in higher costs for consumers. The investigation uncovered a complex web of agreements and understandings among the companies, which allowed them to maintain artificially inflated prices despite market fluctuations.
Industry insiders claim that this cartel-like behavior enabled the companies to maintain their market share while avoiding price wars, leaving customers with no choice but to pay premium prices for subpar products.
The European Union imposed total fines amounting to… A slew of major electronics companies was ensnared in a probe into price-fixing allegations related to the supply of cathode ray tubes (CRTs) from 1996 to 2006. In the era preceding flat-panel displays on televisions and computer monitors, the components were already employed. The Federal Trade Commission investigated allegations that manufacturers conspired to artificially inflate prices. Seven major electronics companies, including LG, Panasonic, Philips, Samsung, and Toshiba, have been slapped with fines for their involvement in at least one or two CRT cartel scandals.
Chipmaker Intel’s exclusionary practices
As the EU delved further into the matter, they uncovered information in May 2009 revealing that the U.S. had been secretly monitoring their citizens’ internet and phone activities without their knowledge or consent? Historically, Intel held a dominant position in the market, leveraging its stronghold to marginalize its primary competitor, AMD? Intel was found to have engaged in anti-competitive practices by paying PC manufacturers and retailers to delay, cancel, or refrain from using or marketing AMD’s products, thereby breaching EU competition rules.
The chipmaker partially succeeded in its appeals against the EU’s enforcement decisions through a series of authorised legal challenges over the following decade. In 2017, the European Court of Justice referred the case back to the lower court, ordering it to reconsider its decision after identifying procedural flaws. The Basic Court subsequently annulled certain aspects of the Commission’s ruling, while acknowledging that some of Intel’s business practices were indeed unlawful.
The General Court quashed the initial fine in its entirety due to concerns over the penalty calculation method, but the European Union subsequently re-imposed a fine of €376.36 million on Intel, citing the “barriers” the court had previously validated. The appeals continue unabated, leaving uncertain where this enforcement saga will ultimately conclude.
Apple relies on Qualcomm for its cellular chips?
In January 2018, Alphabet’s Google faced the prospect of a massive €2.42 billion fine from the European Union for allegedly violating antitrust laws. The sanctions were imposed for abuse of dominance between 2011 and 2016. The European Union’s antitrust investigation focused on Qualcomm’s ties with Apple, concluding that the company had stifled competition from rival chipmakers by offering Apple exclusive deals to use its LTE baseband chipsets in iPhones and iPads.
Nonetheless, Qualcomm appealed the decision, and in June 2022, the EU General Courtroom rejected the Commission’s evaluation and found some procedural flaws with its case, sending it back for reconsideration. Although the EU’s proposed fine may not have garnered significant attention, its magnitude remains noteworthy, making this sizable antitrust penalty a newsworthy story in its own right.
The EU’s competition authority, the Block, has experienced greater success in an ongoing antitrust proceeding against Qualcomm: In September 2024, the Basic Court ordered Qualcomm to pay approximately $270 million for engaging in predatory pricing practices.
Microsoft’s anti-competitive licensing practices
To recalculate the timeline, we must rewind the clock all the way back to March 2004 when the EU handed down a stern rebuke to Microsoft for exploiting its dominance in the Windows operating system market. The then-record $794 million penalty has grown in value over time, equivalent to approximately €762 million (~$1.3 billion) when accounting for Eurozone inflation rates.
The controversy surrounding Microsoft’s licensing and royalties practices has its roots dating back as far as 1993. The European Union’s antitrust regulators imposed a €497 million fine on Microsoft in 2004 for failing to provide interoperability information and unreasonably restricting the development of competing media players. The European Commission imposed a substantial fine, including a nice gift, following a lengthy investigation into Microsoft’s failure to comply with interoperability requirements and ordered various treatments, subsequently levying a massive penalty of €899 million. In 2012, the European Union’s Basic Court upheld a penalty for noncompliance with a fine reduced to €860 million.
Luxembourg’s authorities have taken steps to address concerns about the e-commerce giant Amazon’s taxation practices.
The European Union contended that Luxembourg, where online retail giant Amazon is headquartered, had accorded the company “unfair tax benefits” spanning from May 2006 to June 2014. According to the Commission, Amazon’s corporate structure within the country enabled it to pay roughly one-quarter of what other firms paid in taxes, a tax advantage estimated to be worth approximately €250 million. The EU does not impose difficulty fines in cases of state aid, but instead demands that unlawful uncollected taxes are recovered.
Although the European Commission had concerns about Luxembourg’s methodology for calculating Amazon’s taxable income within the country, unlike in the Ireland-Apple State Aid case, its arguments ultimately did not succeed in court: In a final ruling, the EU’s top court overturned the Commission’s decision, finding that the EU had failed to demonstrate that the Luxembourg tax ruling was unlawful. The upshot? Amazon was off the hook.
