Apple + Ireland vs. EU: Dawn of Drama

Financial Post:

Apple Inc. was ordered to repay a record 13 billion euros (US$14.5 billion) plus interest after the European Commission said Ireland illegally slashed the iPhone maker’s tax bill.

How does the EU decide what Ireland did is "illegal"? Isn't Ireland independent? Doesn't Ireland have its own rules and regulations?

“I disagree profoundly with the commission’s decision,” said Irish Finance Minister Michael Noonan. Ireland’s tax system is founded on the strict application of the law “without exception,” he said.