The ruling, by the General Court of the European Union in Luxembourg, comes amid a broader international debate about how to tax large multinational technology corporations. Several European countries, led by France, have been putting forward digital services taxes that would hit companies including Amazon, Apple, Facebook and Google.
The proposals have been opposed by the Trump administration, which has threatened to retaliate if the European countries move forward. The Organization for Economic Cooperation and Development has been leading an effort to negotiate a compromise.
The Apple tax decision is a blow to Margrethe Vestager, the European Commission’s top antitrust enforcer, who for years has been taking aggressive action against the world’s largest technology platforms. It shows that companies she has targeted can sometimes find a more sympathetic audience in courts that can overturn her judgments.
Google is currently appealing three antitrust decisions brought by Ms. Vestager that amount to fines of about 8.2 billion euros, worth $9.4 billion. Amazon is appealing a 2017 ruling that it owes Luxembourg 250 million euros in unpaid taxes.
In a statement, Ms. Vestager said her office would “carefully study the judgment and reflect on possible next steps.”
“The commission stands fully behind the objective that all companies should pay their fair share of tax,” she said.
The ruling on Wednesday centered on tax law and what constitutes illegal state aid. The court said the European Commission’s argument was flawed and that regulators were “wrong” to conclude Apple had been granted “selective economic advantage.”
Ms. Vestager has made what she considers unfair tax deals a central part of her leadership of the European Commission’s competition office. In an earlier decision, a court overturned her ruling that Starbucks must repay 30 million euros to the Netherlands.