CJEU ruled: no illegal State aid in the European Commission's Amazon case

Today, the Court of Justice of the European Union (“CJEU”) annulled the decision of the Commission  that had decided that Luxembourg had granted Amazon unlawful State aid of about EUR 250 million in a tax ruling confirming the arm's length nature of deductible royalty payments by a Luxembourg operating company to a tax transparent Luxembourg partnership.

Following Advocate General Kokott’s opinion, the CJEU considers that the Commission had wrongly determined the “reference system”, which is the first step in analysing a national measure in order to be able to categorise it as State aid. It is worth noting that the CJEU upheld the judgment of the General Court  which had annulled the decision of the Commission but not on the same grounds.

For more background on AG Kokott’s opinion, please check out our previous Newsletter dated 10 July 2023.

This decision is in line with CJEU’s previous rulings in Engie and Fiat cases (see our previous Newsflash and Article in this respect).