And so, another iPhone launch has come and gone. Apple did announce some notable stuff: A new camera control button on the iPhone, a bigger Apple Watch, new AirPods Pro that can supposedly act as a “clinical grade” hearing aid. But there were no huge surprises.
In fact, I’m quite happy to have last year’s iPhone 15 Pro rather than this year’s iPhone 16 Pro, as the newer model’s telephoto lens has a 5x zoom while the 15 Pro has a 3x lens, which I find generally more useful for portraiture and street photography.
Overall, yesterday’s event seems to have been in line with what Wall Street was expecting, as Apple’s share price ended the day pretty much flat. But today it’s down, and that has nothing to do with the iPhone 16.
Rather, it’s because Apple has to pay Ireland €13 billion ($14.4 billion) in back taxes.
In 2016, the European Union’s competition directorate decided that Ireland had granted Apple a sweetheart tax deal that let the company pay an effective corporate tax rate as low as 0.05% on its European profits. Like most Big Tech firms, Apple’s EU base is in Ireland, which offers comparatively generous tax terms and light-touch regulation. The Commission found Dublin gave Apple an even sweeter tax deal than usual to preserve thousands of jobs in the country—and that this special treatment amounted to illegal, market-distorting state aid that needed to be paid back.
Four years later, Apple’s appeal to the EU’s General Court, which handles appeals of decisions by the Commission, proved successful. The Commission’s ruling was overturned, with the General Court finding that it hadn’t proven Ireland gave Apple a particular advantage over its peers. Vestager had gone out on a limb by trying to apply antitrust law to a tax matter—“total political crap,” as Apple CEO Tim Cook called it at the time—and it looked like she had indeed gone too far.
But the Commission then appealed to the Court of Justice of the EU, which is the bloc’s highest court. And today the Court of Justice gave antitrust commissioner Margrethe Vestager what she wanted: an overturning of the General Court’s 2020 ruling, and confirmation that she got it right the first time. Apple must pay that €13 billion and Ireland, which has fiercely resisted claiming that vast pile of cash, has to take it. (The cash has been sitting in escrow for years.)
“Today is a big win for European citizens and for tax justice,” Vestager said.
And that wasn’t the only thing to put a spring in Vestager’s step today. The Court of Justice also upheld the €2.4 billion fine that her department levied on Google in 2017, for favoring its own comparison shopping service in its regular search results by downranking rivals when the user searched for clothes or washing machines.
Google is still appealing the other two big fines it subsequently received in the EU (€1.5 billion for AdSense for Search abuses, and €5 billion for Android abuses), but today’s decision is another huge win for Vestager.
The Google Shopping case was where she originally made her name, by successfully reviving a fight that her predecessor, Joaquín Almunia, had all but surrendered. And the Apple-Ireland case is where she gained international notoriety—partly because of the massive sum involved, and partly because it prompted former U.S. President Donald Trump to refer to her as the EU’s “tax lady.” Now her combative and boundary-pushing approach has been vindicated in both cases. Both Google and Apple said they were “disappointed” by today’s decisions.
Vestager is about to step down as competition commissioner. The liberal Dane no longer has enough political support back home, so Denmark has proposed someone else to be its representative in the Commission. We’ll only find out next week who the EU’s new antitrust chief will be. But for Vestager, this is one heck of a way to go out.
More news below.
David Meyer
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NEWSWORTHY
Huawei answers Apple. Just after Apple unveiled the iPhone 16, its Chinese rival Huawei showed off its much-awaited tri-fold phone, the Mate XT. As Bloomberg reports, the device folds out into a 10-inch tablet, but at a starting price of 19,999 yuan ($2,800), which could limit its appeal. That said, Huawei was boasting 3 million pre-orders before the Mate XT was even officially revealed.
AMD changes tack. AMD is reducing its focus on flagship graphics processing units so it can focus on AI chips, and of course lower-price-point GPUs too. As The Verge notes, this echoes Nvidia’s increasing prioritization of data-center AI chips, while also recognizing that AMD’s flagship GPUs haven’t prevailed against Nvidia’s alternatives.
Oracle pop. Oracle’s share price rose 9% at the start of trading today, thanks to its cloud business thriving in the AI boom. The Wall Street Journal explains that Oracle may have been late to the AI cloud party, but its data centers are relatively new and tailored to AI training—and because Oracle isn’t developing its own large language models, it has developed useful partnerships with companies that are, like Microsoft and Google.
SIGNIFICANT FIGURES
59 billion rubles ($644 million)
—The amount that Russia will spend to boost internet censorship over the next five years, according to the Russian edition of Forbes, which says upgrades to Russian internet filtering systems will make it easier to restrict access to censorship-bypassing VPNs.
IN CASE YOU MISSED IT
SpaceX launches daredevil billionaire into space to conduct first spacewalk by a private citizen, by the Associated Press
Tesla posts 2024 high in China car sales last month, but is still losing share to rivals like BYD, by Christiaan Hetzner
Struggling Volvo Cars says ‘safety is our superpower’ as EV ambitions dashed by flatlining market, by Ryan Hogg
Americans were scammed out of $5.6 billion in 2023 as crypto fraud losses spiked 45%, by the Associated Press
China refuses to sign agreement to ban AI from controlling nuclear weapons, by AFP
The future is charging at us—and humanity must cope with what was once the stuff of science fiction, by Vivek Wadhwa (Commentary)
BEFORE YOU GO
Online rules. Online platforms have for the first time overtaken TV as the main source of news for Brits, according to the U.K. media regulator Ofcom. As TechCrunch reports, the shift will probably lead Ofcom to pay more attention to online media in the future. “Television has dominated people’s news habits since the ’60s, and it still commands really high trust,” said Ofcom strategy chief Yih-Choung Teh. “But we’re witnessing a generational shift to online news, which is often seen as less reliable—together with growing fears about misinformation and deepfake content.”
