Tech giant Apple (NASDAQ:AAPL) is facing a double whammy, with the U.S. Department of Justice imposing a $25 million fine to settle a case related to discriminatory hiring practices and an adviser to the European Union’s (EU) top court asking for setting aside a previous favorable ruling related to the payment of a disputed €13 billion tax bill in Ireland.
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DOJ Imposes $25M Fine
On Thursday, the DOJ issued a statement saying that an investigation, which started in 2019, revealed that Apple violated the anti-discrimination provisions under the Immigration and Nationality Act (INA).
The company’s hiring practices discriminated against U.S. job applicants by awarding the positions to some immigrant workers who were seeking permanent resident status in the country. The DOJ imposed a $25 million fine under an agreement that requires the iPhone maker to pay $6.75 million in civil penalties and set up a $18.25 million back-pay fund for eligible discrimination victims.
Apple denied any wrongdoing, saying, “When we realized we had unintentionally not been following the DOJ standard, we agreed to a settlement addressing their concerns.”
€14.3B Tax Dispute
Apple faced a setback in its €13bn tax dispute with the European Union after Giovanni Pitruzzella, an advocate-general of the European Court of Justice, recommended that an earlier ruling revoking the EU’s order for the tech behemoth to pay €13 billion in back taxes to Ireland “should be set aside.”
As per Reuters, the adviser to Europe’s top court contended that the EU’s General Court made legal errors when it ruled in favor of the company and failed to “assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings.” Pitruzzella believes the case should be referred back to the lower tribunal for a new assessment.
In its 2016 decision, the European Commission determined that Apple gained from two Irish tax rulings for over two decades that artificially lowered its tax burden to as low as 0.005% in 2014. However, in 2020, the General Court ruled in favor of Apple’s challenge, saying that regulators did not meet the legal standard to establish that the company had an unfair advantage.
In reaction to the matter, Ireland maintained its position that the correct tax amount was paid and the country did not provide any state aid to Apple.
Meanwhile, an Apple spokesperson said, “The General Court’s ruling was very clear that Apple received no selective advantage and no state aid, and we believe that should be upheld.”
Is Apple Stock a Good Buy Now?
Despite the impact of macro pressures on consumer spending and regulatory woes, Apple scores Wall Street’s Strong Buy consensus rating based on 24 Buys and eight Holds. The average price target of $201.82 implies 10.6% upside. Shares have rallied more than 40% year-to-date.
