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Apple to appeal EU's $14.5B fine, calls itself 'convenient target'

The company's general counsel tells Reuters that the European Union targeted Apple because it "generates a lot of headlines."

Apple is fighting an EU fine.
Chesnot, Getty Images

When the European Union slapped Apple with a $14.5 billion tax fee in August, CEO Tim Cook called it "political crap."

This week, the tech behemoth is fighting back in the form of an official appeal.

"Apple is not an outlier in any sense that matters to the law," Apple General Counsel Bruce Sewell told the Reuters news service. "Apple is a convenient target because it generates lots of headlines."

The EU's watchdog, the European Commission, takes issue with a deal Apple has with Ireland that enables the company to locate a chunk of its earnings there in return for creating jobs. This results in the iPhone maker paying a lower tax rate there than the 35 percent it would pay in the US.

"Member States cannot give tax benefits to selected companies -- this is illegal under EU state aid rules," Commission competition policy specialist Margrethe Vestager said in a statement in August.

Apple contends that the Commission is trying to change the rules after the fact.

"Because our products and services are created, designed and engineered in the US, that's where we pay most of our tax," Apple said in a statement Monday. "This case has never been about how much tax Apple pays, it's about where that tax is paid."

Ireland will also appeal the EU's fining of Apple, hoping to protect a tax system that brings multinational companies to its shores.

The latest comments echo ones Cook made in September following the EU's initial fine.

"The Commission's move is unprecedented and it has serious, wide-reaching implications," Cook wrote in an open letter to Apple's European customers. "It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been."

The legal battle caps off a relatively tough year for Apple. The iPhone 7 was knocked by some for its incremental upgrades. In October, the company reported its third straight quarter of weaker iPhone sales, marking its first fiscal year of lower phone sales since the device was introduced in 2007.

But it's not all bad news. Apple is still the world's highest valued company and estimates it will bring in more than $75 billion in revenue in the current quarter.

First published December 18 at 8:43 p.m. PT.
Updated December 19 at 8:32 a.m. PT: Added Apple comment.