I mean the way I see it, the judge is saying "hey, if someone follows the law, you can't complain if they're able to reduce their tax payable". But what I don't see is them saying "and you can't make laws to change that".
When a court gives a restrictive meaning to a given provision, it incentivizes Parliament to introduce more laws to capture the activity they wanted to capture in the first place. This has gone on for decades, and as a result, the British tax laws are a mess. When you have a massive number of provisions trying to capture essentially the same thing, then you are bound to run into inconsistencies, which lead to "loopholes".
I love how laws remind me of some of the really bad code I've written in the past, with all sorts of broken patches trying to fix it, even though I know I just have to throw it out and start again...
There is however a strong feeling that certain Large Internet Related Companies ought really to pay some tax on their UK operations.
I think it's not so much Internet-related companies as multinationals, who (unlike home-grown, smaller businesses) often have the scale and geographical diversity to play funny money games where all of their profits conveniently wind up being earned in a location where a very low tax rate is payable, even though the money was blatantly earned elsewhere. That creates a huge barrier to competition for those smaller, home-grown businesses, and obviously deprives the government of a lot of tax revenues they "deserve".
The catch is that these businesses do pay a lot of tax in the originating countries: in the UK, for example, they probably collect VAT, make Employer's National Insurance contributions, and pay all kinds of consumption and property-related taxes. Additionally, these businesses typically employ a lot of local people. Consequently, if you sharply change the rules so they can't play their funny money games on Corporation Tax and as a consequence it really does become relatively expensive/unprofitable to operate within a certain country, then if they scale down or outright leave, it still hurts, a lot.
So far, I don't see any happy ending to this impasse for the government that doesn't involve an unprecedented and IMHO implausible level of international cooperation.
The more likely alternative seems to be governments realising that taxes on local profits are effectively a competitive international market, and having to learn to live within their means, probably rebalancing the tax system heavily in favour of consumption taxes and then making a whole round of adjustments to avoid screwing poor people because consumption taxes are regressive by nature. I can believe this would work, if you had sufficiently smart people figuring out how to balance everything properly, but for sure it would look very different to the tax landscape we have in most first world countries today.
Of course there are also the more draconian options: windfall taxes, economic annihilation of tax havens until they stop undercutting everyone else, and the like. But I suspect the long term costs of breaking the rules because you're a government and you can would far outweigh any short term increase in tax revenues, so I don't see any of these as particularly likely.
Such is my cynical nature, I interpreted the 'initiative' as an attempt to distract attention from other areas of Mr Osborne’s policies. Rather like a stage magician.