The European Commission suffered an embarrassing defeat in its court battle with Amazon on Wednesday, after EU judges cancelled Brussels’ order that Luxembourg recoup about £215m in back taxes from the US tech giant.
The victory for Amazon is another setback for Margrethe Vestager, who leads the EU’s powerful competition authority and had accused Luxembourg of signing sweetheart tax deals with the company that amounted to illegal state aid.
At the heart of the case is a simple concept. Were the rules special for Amazon? If yes then maybe it’s state aid and thus illegal. If no, if other companies could achieve the same deal, then it’s not state aid and is just the normal ability of a country to decide its own tax rates.
As with the Apple and Ireland result – so far – the courts are finding that it’s not special to the specific company therefore isn’t state aid. All very simple indeed.