Europe’s top court on Thursday sided with Amazon in a case in which the U.S. e-commerce giant was accused by the European Commission of illegal tax benefits.
The European Court of Justice (ECJ) said that the Commission, the EU’s executive arm, had “not established” that a tax agreement between Amazon and Luxembourg was “a state aid that was incompatible with the internal market.”
“We welcome the Court’s ruling, which confirms that Amazon followed all applicable laws and received no special treatment,” Amazon said in a statement on Thursday.
The case stems back to 2017 when the European Commission alleged Amazon received tax advantages in Luxembourg, the location of it European headquarters.
Amazon was ordered to pay back 250 million euros (roughly $270 million) to Luxembourg in 2017.
The U.S. technology giant appealed the decision. In 2021, a lower EU court sided with Amazon where the EU’s general court said the Commission failed to prove that there was an illegal tax advantage given to Amazon by Luxembourg.
The Commission then appealed this, sending it to the ECJ, Europe’s top court.
The ECJ rejected the Commission’s appeal in what is another blow to the EU’s competition chief Margrethe Vestager, who has looked to rein in the power of technology firms operating within the 27-member bloc and challenge some of their tax practices.
In 2016, the Commission ordered Ireland to claw back 13 billion euros in back taxes from Apple. Ireland, which is Apple’s European base, gave the U.S. tech giant preferential tax treatment, the EU alleged at the time.
Apple won an appeal in 2020 to stop the tax clawback. That is now under a challenge by the Commission. The ECJ may have the final say in this case too.