The European Court of Justice (ECJ) has upheld a Court of First Instance (CFI) judgment, which found that the retroactive reduction of fees due by Orange and SFR did not constitute State aid and was not discriminatory.
In 2001, following a call for applications for the award in France of four universal mobile telecommunications system (UMTS) licences, also known as 3G licences, only two applications were received: one from Orange and one from SFR. They were both granted a 15 year licence for a total of EUR 4.95 billion. Following another call for application, a third licence was issued to Bouygues Telecom in 2002 for 20 years for EUR 619 million (plus a percentage of turnover). These conditions were then awarded retroactively to the first two licence holders.
Bouygues Telecom filed a complaint with the Commission claiming that the retroactive applications of the same conditions to Orange and SFR constituted State aid. The Commission, then the CFI and the ECJ dismissed Bouygues Telecom’s actions. The ECJ found that the retroactive reduction of the 3G licence fees took into account the fact that the licence holders’ situation was comparable (none of the operators had entered the market at that time) and was therefore not discriminatory. The ECJ also found that the fact that the reduction in fees created an advantage to the beneficiaries was not sufficient to prove the existence of State aid incompatible with the Common Market.