Yesterday’s EU General Court decisions in Starbucks and Fiat represent major victories for the Commission and its theory of state aid, notwithstanding that it lost Starbucks. The cases have significant implications for the pending Apple case. This short article discusses five major themes emerging from the decisions:

  • The treatment of the arm’s-length standard
  • Implications of the decisions for Apple
  • Implications of the decisions for non-arm’s-length allocation rules in the proposed CCCTB and pending in the BEPS 2.0 negotiations
  • Whether the decisions mean that the OECD Transfer Pricing Guidelines have now been incorporated into EU law via the state-aid rules
  • Implications of the General Court’s conceptualization of arm’s-length income allocation as analogous to the “market economic operator” test
Ruth Mason, Special Report on EU State Aid: Part 7—Implications of the Rulings in Starbucks And Fiat for the Apple State Aid Case, 154 Tax Notes Federal 93–100 (2019).