The European Commission is gearing up for another potentially impactful dispute with technology behemoth Apple, which may have significant ripple effects on Ireland. Apple stands accused of violating the Commission’s Digital Markets Act (DMA), by inhibiting competition within its application marketplace. Furthermore, a separate probe has been initiated into the developer fees charged by Apple.
Apple is presently involved in a high-stakes legal spat with Brussels that implicates Ireland directly. The Commission maintains that due to a specialised agreement between Ireland’s government and Apple, the tech giant allegedly underpaid the country by €13.1 billion in taxes. This accusation was initially dismissed by the EU’s General Court, but was revisited by the EU’s Advocate General last November, leading to a re-evaluation of the case by the General Court.
While Ireland may not be directly implicated in the supposed violation of the DMA, it could still be impacted indirectly and substantially. Should the case conclude against Apple’s favour, the company stands to face a penalty amounting to 10 per cent of its global revenues. Repeated violations of the DMA rules could see this percentage raised to 20 per cent.
If the Commission emerges triumphant in this legal standoff, there could be significant repercussions for Apple’s European Union (EU) operations. Apple’s EU headquarters are currently situated in Ireland where it serves as one of the largest employers and offers sizeable contributions to corporate tax revenues. Any threat to this setup would likely deal a major blow to Ireland’s economy.
Worthy of note is the Commission’s motivation for challenging Apple, perceived as a push for increased competitiveness and innovation in the technology space, aiming to dislodge dominant tech entities. This stance, it is believed, will in turn spur growth among emerging EU tech businesses.
Ireland’s heavy dependence on the multinationals for economic growth and tax revenue implies an inherent susceptibility to external shocks, such as unfavourable legal verdicts against companies like Apple. This ongoing case accentuates such risks, highlighting the importance of nurturing a domestic corporate sector capable of buffering any decrease in multinational activity.