The initial charge against Amazon was brought by the E.U. as a part of their push to cut corporate tax avoidance. In Amazon's case, the European Commission focused on the government of Luxembourg's tax treatment of Amazon two companies: Amazon E.U. and Amazon Europe Holding Technologies.
The European Commission argued based on an investigation started in 2003, that special low tax conditions between the Amazon companies and the government amounted to "illegal state aid". According to the E.U. official in charge of antitrust issues, Margrethe Vestager, these conditions allowed Amazon to avoid paying taxes on nearly three-quarters of its E.U. profits.
"In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules," Vestager said in a 2017 statement.
Amazon's E.U. headquarters are located in Luxembourg, as is the EU's General Court.
Both the government of Luxembourg and Amazon filed challenges with the General Court against the European Commission's initial ruling.
The E.U.'s General Court argued in their annulment that the European Commission had not proven "to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group."
Amazon said in a statement that the court's ruling supported its "long-standing position that we followed all applicable laws and that Amazon received no special treatment."
"We're pleased that the Court has made this clear, and we can continue to focus on delivering for our customers across Europe," the statement added.
Vestager wrote in a statement in response to the ruling that the European Commission "will carefully study the judgment and reflect on possible next steps."
The E.U.'s antitrust efforts are focusing on the special tax relationships established between multinational companies and countries within the E.U. The special tax deals are used to attract these companies to construct their EU headquarters in the country with the best offer.
This isn't the first time that the E.U.'s General Court has been called to judge on the European Commission's antitrust rulings. While the court has sided with the commission on a number of cases, it recently granted annulments on rulings against Starbucks
There is still another court that could rule to reverse the annulment on the European Commission's tax ruling. The annulment could be appealed through the European Court of Justice.
This also isn't the first time the E.U. has come after Amazon or Luxembourg on antitrust issues.
Last year, E.U. regulators began an antitrust investigation into Amazon regarding allegations that the company has an unfair advantage over the companies that sell products on the platform because Amazon has access to their sales data.
On the same day as the recent Amazon ruling, the General Court ruled in the European Commission's favor on another case involving unfair tax advantages being granted by the Luxembourg government. Last year, Fiat Chrysler Automobiles
Luxembourg's government said in a statement that it maintained a "commitment to transparency in tax matters and the fight against tax avoidance practices."