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The ruling stems from a decision by the European Commission to open an investigation into whether so-called tax rulings by the Netherlands may have given the sportswear giant an unfair advantage over its competitors. Nike challenged the move, saying it was premature and based on insufficient evidence.
The commission “complied with procedural rules and neither failed to fulfill its obligation to state reasons nor made manifest errors of assessment,” the EU General Court ruled on Wednesday, dismissing Nike’s appeal.
Margrethe Vestager, the EU’s competition commissioner, has used the bloc’s tough state-aid rules to attack special treatment doled out by member states to multinationals, including Apple Inc (NASDAQ:AAPL)., Amazon.com Inc (NASDAQ:AMZN). and Starbucks Corp (NASDAQ:SBUX).
She’s since suffered a couple of big setbacks. Both Amazon and Apple won their appeals to topple tax-payback demands, including a record 13 billion-euro ($15 billion) order for the iPhone maker.
In the meantime, the Group of 20 nations have agreed on the outlines of a global corporate-tax pact, with U.S. Treasury Secretary Janet Yellen warning against “taxes that are discriminatory against U.S. firms.” The EU on Monday postponed plans for a controversial digital levy that was likely to hit Silicon Valley giants’ business in Europe.
The EU’s ongoing probe into Nike’s fiscal arrangements focuses on Dutch tax treatment of Nike European Operations Netherlands BV and Converse BV. The EU said it may have unfairly reduced the tax bill for the Nike group.
The EU probe weighs five tax rulings issued by the Netherlands from 2006 to 2015, that calculated the royalty paid by the Nike units to use intellectual property for Nike and Converse products sold in Europe, the Middle East and Africa.
The case is: T-648/19, Nike European Operations Netherlands and Converse Netherlands v. Commission.
