EU regulators today ruled that it is likely that some European tax deals of big firms like Apple, Starbucks and Fiat seem likely to breach antitrust restrictions.

The European Commission, which is responsible for antitrust enforcement, will now open "in depth investigations" that could end in these companies made to pay massive bills for back taxes.

The investigations in this matter started in June 2014 and it specifically targeted the three companies but the probe is set to attract the attention of many multi-nationals because the basic strategies of Apple, Starbucks, and Fiat to shift profits to low-tax districts are commonly used by many companies, including Google, Facebook and Microsoft. These tactics have been denounced by many as national economies struggle and governments look to improve tax revenues.

These three companies and many other firms employ something called transfer pricing. A company that wishes to reduce its overall tax burden creates a foreign division or holding company and transfers its intellectual property - patents, trademarks, copyrights, business processes, trade secrets, and branding - to that entity.

The companies create a foreign company in a country that has low tax rates on the profits generated from such properties.

Then the new entity licenses the property back to the parent organization or another national division, charging a fee for its use. The parent or other division pays the fee and it is deducted as a business expense. The entity which is set up in the third country to own the intellectual property receives it as profit.

Often the intellectual property-holding entity expands operations, hires researchers, and becomes an R&D; center to lend credibility to the structure. Then the overall company can have the R&D; center use its "profits" to fund research and development done at other divisions and undertake its own R&D.;