The General Court of the European Union delivered judgements on illegal State aid rulings issued by the European Commission against Luxembourg in its tax dealings with tech giant Amazon and French energy provider Engie. The General Court ruled against the European Commission’s finding that Luxembourg granted a tax advantage worth €250 million tantamount to State aid to Amazon. According to the General Court, the analysis put forward by the Commission was insufficient to demonstrate the existence of State aid. The General Court did find in favour of the Commission’s case that Luxembourg granted illegal State aid worth €120 million to Engie.

The Amazon and Engie cases are among a number of high profile State aid rulings alleging that European Member States granted tax advantages to large corporates, including Apple in Ireland, Fiat in Luxembourg and Starbucks in the Netherlands. To date the General Court has ruled in favour of the Commission in its State aid case against Fiat in Luxembourg but against the Commission in the Starbucks and Apple cases.

In the Engie case, the General Court confirmed the Commission’s decision that a set of tax rulings issued by Luxembourg artificially reduced Engie’s tax bill by around €120 million. The tax rulings endorsed two financing structures put in place by Engie that treated the same transaction both as debt and as equity, with the result that its profits remained untaxed.

In the Amazon case, the Commission contended that a tax ruling issued by Luxembourg to Amazon allowed three-quarters of the profits made from all Amazon sales in the EU to go untaxed until 2014. However, the General Court’s judgement said that none of the findings set out by the Commission in its State aid decision are sufficient to demonstrate the existence of an advantage for the purposes of Article 107(1) TFEU, with the result that the contested decision is annulled in its entirety. EU Competition Commissioner Margrethe Vestager has said that the Commission will carefully study the General Court’s Amazon judgment and reflect on possible next steps.

The Commission is appealing the Apple Case to the European Court of Justice. The Fiat case is also under appeal to the European Court of Justice.