On the Apple State aid decision
It seems State aid law is in fashion these days, and that experts in the field are flourishing.
This is in many ways a welcome development for some of us who have been working on tax State aid cases for over a decade (as I mentioned here once, my first contact with competition law 13 years ago while still at university was a not-so-ground-breaking paper on tax competition and State aid, and tax State aid is a significant chunk of our work; see e.g. here and here or my comments below the post here).
The Commission’s decision in the Apple case is responsible for putting EU State aid law under the world’s spotlight (even if some of the issues that are being re-discovered are pretty settled or had already been raised by the previous decisions on tax rulings).
The decision seems to have been mostly welcome, if only for apparent ethical reasons (the message that Apple pays 50 euros in taxes for every million in profits is quite powerful in that regard).
In fact, PR-wise this may be the most effective Commission action in years (well, in this side of the Atlantic and of the English Channel).
However, I’m not sure a morally desirable outcome should be achieved at the expense of stretching the boundaries of the law. The underlying problem here is a political one (tax competition due to lack of tax harmonisation) and should arguably be better tackled at the root.
[After publishing this post I read an article (see here) that makes a similar point but that may be a bit more unexpected and controversial considering its author: former Commissioner Neelie Kroes…]
And as obvious as the advantage in this case may be, adopting a decision with regard to one/some specific company/ies without examining how other tax rulings treat other multinational companies (and whilst claiming that tax rulings in themselves are legal) is risky, as it deviates from the assessment of selectivity as we have always known it. I already made this point on day one.
Those interested in undertanding the legal issues that are key to this case should take a look at this recent presentation by one of the greatest experts in the field, my colleague José Luis Buendía. It illustrates wonderfully (and funnily) the apparent chicken-egg and apple-pear problems in the Commission’s approach:
By the way, the 13 billion figure has proven that my prescient, visionary, specific and detailed quote to the Financial Times in April 2015 was spot on: “We are talking about potentially very significant amounts of money, said Alfonso Lamadrid de Pablo, a senior associate at Brussels law firm Garrigues” (see here)
P.S. And if interested in a timely conference on these matters, check this one out (co-organized by one of the sponsors of our own Chillin’Competition conference, Hart Publishing): http://www.bloomsburyprofessional.com/uk/hart/conferences/ (Early Bird Discount if you book your place before 9 September 2016).