European Commission Rules Against State Aid for France Telecom

The European Commission ruled against France Telecom in a case involving an exemption from business taxes that the carrier was granted by the French state. The EC found that between 1994 and 2002, France Telecom enjoyed special conditions concerning local direct taxes and that these tax exemptions are an unfair form of state support. As a result, the EC is ordering France Telecom to pay back to the state an amount estimated at between EUR 800 million and EUR 1.1 billion plus interest.



In response, France Telecom said the EC decision lacks any economic or legal basis and that it did not receive any particular state aid due to the French tax structure. The company is appealing the decision.



On a separate issue, the EC ruled that the French state did not favor Orange over its competitors when laying down the conditions for awarding UMTS licenses. http://europa.eu.inthttp://www.francetelecom.com