Digital Tax Challenges Just Got a Little Tougher in Europe

Opponents of European digital services tax proposals may have a harder time successfully arguing that they unfairly target U.S. tech giants like Facebook Inc. and Alphabet Inc.'s Google after the European Commission lost a case over Hungary’s advertising tax.

The European Union General Court June 27 overturned a 2016 commission decision that Hungary’s tax on advertising revenue violated EU state aid rules because it captures companies based on the size of their turnover.

Critics of European proposals to tax the digital economy have argued that those efforts discriminate against large multinational tech companies. The June 27 decision, as well as ...