European Union regulators sent a warning to any company usingfees on intellectual property rights to shift profits away from thetaxman—slapping Amazon.com Inc. with a 250 million-euro ($294million) bill and giving Luxembourg another rap on theknuckles.

The EU took a dim view of a structure that allowed Amazon toslash its taxable profits in Europe over about a decade bychanneling them to a tax-free unit located in Luxembourg that wasmeant to license the technology behind its web shoppingplatform.

Officials found one big problem with the arrangement: The unitwas just a shell company, how could it therefore performcomplex duties such as licensing and managing intellectualproperty? Impossible, according to the EU. Both Amazon, which is amajor employer in Luxembourg, and the country's government denythey broke any rules.