The Irish Times view on Apple’s latest row with the EU: another high stakes case

The European Commission is poised for another bruising encounter with Apple, the giant technology company, that could have important implications for Ireland.

The commission has accused Apple of breaching its Digital Markets Act (DMA) through stifling competition in its app store. It has launched a separate investigation into Apple’s developer fees.

Apple is already embroiled in a high-profile legal tussle with Brussels that directly involves Ireland. The commission alleges that Apple underpaid Ireland €13.1 billion in taxes because of a bespoke arrangement between the government and the company. The commission’s case was initially rejected by the EU’s General Court, but the ruling was set aside by the EU’s Advocate General last November and it has been returned to the General Court for further deliberation.

The alleged breach of the DMA does not directly involve Ireland but it could have significant indirect consequences. If the case goes against it, Apple could face a fine of up to 10 per cent of global revenues. If Apple continues to breach DMA rules, the fine can rise to 20 per cent of revenues.

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If the commission prevails in this legal dispute, it could have consequences for Apple’s EU operations. Apple’s EU headquarters are based in Ireland. It is one of the biggest employers in the State and one of the most significant contributors to corporate tax revenues. If there is any threat to Apple’s commitment to the EU market, there would be a significant hit to the Irish economy.

It is important to note that the rationale for the commission’s move against Apple is that it wants to encourage competition and innovation in the tech sector and break the stranglehold of large tech companies. This, it argues, will stimulate growth among indigenous EU tech companies.

Ireland is heavily reliant on the multinational sector for growth and tax and so the economy is vulnerable to external shocks, such as adverse legal findings against Apple. The case is a timely reminder of these risks and of the need to develop a domestic corporate sector that can cushion against any downturn in multinational activity.