JUDGMENT OF THE COURT (Second Chamber)

22 October 2014 ([\*](#Footnote*))

(Appeal — State aid — Exemption of a pension fund from the obligation to pay a contribution to a pension protection fund in respect of certain
employees — Selective nature of the measure)

In Case C‐620/13 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 25 November 2013,

**British Telecommunications plc,** established in London (United Kingdom), represented by J. Holmes, Barrister, and H. Legge QC,

appellant,

the other parties to the proceedings being:

**European Commission,** represented by L. Flynn and N. Khan, acting as Agents, with an address for service in Luxembourg,

defendant at first instance,

**BT Pension Scheme Trustees Ltd,** established in London, represented by J. Derenne and A. Müller-Rappard, avocats, instructed by M. Farley, Solicitor,

applicant at first instance,

THE COURT (Second Chamber),

composed of R. Silva de Lapuerta (Rapporteur), President of the Chamber, K. Lenaerts, Vice-President of the Court, acting
as a Judge of the Second Chamber, J.-C. Bonichot, A. Arabadjiev, and J.L. da Cruz Vilaça, Judges,

Advocate General: M. Szpunar,

Registrar: A. Calot Escobar,

having regard to the written procedure,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

**Judgment**

1        By its appeal, British Telecommunications plc (‘BT’) seeks the setting aside of the judgment in *British Telecommunications and BT Pension Scheme Trustees* v *Commission* (Joined Cases T‐226/09 and T‐230/09, EU:T:2013:466; ‘the judgment under appeal’), by which the General Court of the European
Union dismissed the actions brought by BT and by BT Pension Scheme Trustees Ltd (‘BTPS Trustees’) for annulment of Commission
Decision 2009/703/EC of 11 February 2009 concerning the State aid C 55/2007 (ex NN 63/07, CP 106/06) implemented by the United
Kingdom of Great Britain and Northern Ireland — Crown guarantee to BT (OJ 2009 L 242, p. 21) (‘the contested decision’), declaring
that the aid granted to BT by the UK authorities in the form of an exemption, granted to that company’s pension fund, from
the obligation to pay a contribution to a pension protection fund in respect of persons employed by the company before its
privatisation constitutes State aid which is incompatible with the common market.

**Background to the dispute and the contested decision**

2        In the judgment under appeal, the General Court summarised the facts of the case before it as follows:

‘1.      The applicant in Case T‐226/09, [BT], is an incorporated company governed by the law of the United Kingdom, active in the
information technologies ... sector. ...

2.      On 1 April 1984, pursuant to the Telecommunications Act 1984 (“the 1984 Act”), BT became a public company wholly owned by
the [UK] Government. On 6 August 1984, the business of British Telecommunications ... was transferred to BT. ... Following several
disposals of shares to the public between November 1984 and 1997, the [UK] Government disposed of its entire shareholding
in BT.

3.      Under the rules of its pension scheme, the BT Pension Scheme (“the BTPS”), BT must contribute regularly to the scheme in order
to meet the pension benefits payable and also the costs and expenses of the scheme.

4.      The applicant in Case T‐230/09, [BTPS Trustees], consists of the trustees of the BTPS, which is the current pension scheme
for BT employees. ...

5.      BTPS Trustees must ensure that, in the long term, the BTPS holds sufficient assets to cover the cost of the pension benefits
payable under that scheme. [BTPS Trustees is] responsible for paying to the Pension Protection Fund [(“the PPF”)] any levies
due in respect of the BTPS ... .

...

8.      On 28 November 2007 the Commission adopted and notified to the United Kingdom a decision (OJ 2008 C 15, p. 8) in which it
found that the State guarantee granted to BT (“the guarantee”) pursuant to section 68 of the 1984 Act, as amended by the Communications
Act 2003 ..., did not constitute State aid within the meaning of Article 87(1) EC, in so far as it covered, in the event that
BT should become insolvent, its pension liabilities. In the same decision, moreover, the Commission initiated the formal examination
procedure, pursuant to Article 87(2) EC, in respect of certain measures linked with the guarantee.

...

10.      On 11 February 2009 the Commission adopted [the contested decision].

...

14.      The Commission observed that, in its decision of 28 November 2007, it had taken the view that, on its own, the guarantee was
of benefit only to BT’s employees and therefore did not confer any advantage on BT, since the guarantee did not affect its
credit rating, investment or employment policy. The Commission had therefore concluded that that guarantee, in so far as it
did not confer any specific additional advantage on BT, independently of the modifications to the legal framework introduced
in 1995 and 2004, did not constitute State aid within the meaning of Article 87(1) EC (recital 37 to the contested decision).
On the other hand, the Commission had initiated the formal investigation procedure in respect of two measures relating to
the pension liabilities covered by the guarantee: first, the exemption granted to [BTPS Trustees] from the application of
the minimum funding requirements to pensions covered by the guarantee, introduced by the Pensions Act 1995 and the [Pensions
Act 2004]; and, second, the exemption of [BTPS Trustees] under the 2005 Regulations (Entry Rules) from the application, for
pension liabilities covered by the guarantee, of the requirement of the [Pensions Act 2004] to contribute an annual levy to
the PPF (“the exemption from the PPF levy”) (recitals 36 to 38 to the contested decision).

15.      At recital 71 to the contested decision, the Commission considered that it was not established that the exemption from the
minimum funding requirements laid down in the Pensions Act 1995 and the rules contained in the [Pensions Act 2004] had procured
or still procured an economic advantage for BT. It therefore concluded, in that respect, that there was no State aid within
the meaning of Article 87(1) EC.

16.      At recitals 72 to 90 to the contested decision, on the other hand, the Commission considered that the exemption from the PPF
levy corresponding to the pension liabilities covered by the guarantee procured, in so far as it was granted owing to the
existence of the guarantee and the guarantee was granted without any payment, a selective economic advantage for BT owing
to the use of the public resources of the United Kingdom, such advantage being liable to distort competition and trade between
Member States. According to the Commission, that exemption therefore constituted State aid within the meaning of Article 87(1)
EC and, as it had not been notified to the Commission pursuant to Article 88(3) EC, it was unlawful.

...

18.      The operative part of the contested decision includes, in particular, the following provisions:

“*Article 1*

The State aid unlawfully put into effect by [the United Kingdom] for [BT], the beneficiary, in the form of an exemption for
the [BTPS contribution] to the [PPF] as concerns the beneficiary’s pension liabilities covered by section 68(2) of the [1984
Act] as amended, is incompatible with the common market within the meaning of Article 87(1) [EC].

[The United Kingdom] shall cease the incompatible State aid to [BT].

*Article 2*

[The United Kingdom] shall recover the aid referred to in Article 1 from the beneficiary.

The sum to be recovered shall bear interest for the entire period running from the date it was put into effect until the date
of its recovery.

...

*Article 3*

Recovery of the aid referred to in Article 1 shall be immediate and effective.

...

*Article 4*

Within two months following notification of this Decision, [the United Kingdom] shall submit the following information to
the Commission:

(a)      the total amount to be recovered from the beneficiary;

(b)      a detailed description of the measures already taken and planned to comply with this Decision; and

(c)      documentary evidence that the beneficiary has been ordered to repay the aid.

[The United Kingdom] shall keep the Commission informed of the progress of the national measures taken to implement this Decision
until recovery of the aid referred to in Article 1 has been completed. It shall immediately submit, on simple request by the
Commission, information on the measures already taken and planned to comply with this Decision. It shall also provide detailed
information concerning the amounts of aid and recovery interest already recovered from the beneficiary.

*Article 5*

This Decision is addressed to [the United Kingdom].”’

**Procedure before the General Court and the judgment under appeal**

3        BT had raised seven pleas in law in support of its action against the contested decision. By the judgment under appeal, the
General Court rejected all of those pleas.

**Forms of order sought**

4        BT claims that the Court should:

–        set aside the judgment under appeal;

–        uphold its pleas as well founded;

–        annul the contested decision, declaring that the aid in question is compatible with the common market; and

–        order the Commission to pay the costs.

5        BTPS Trustees claims that the Court should:

–        allow the appeal in its entirety and set aside the judgment under appeal;

–        annul the contested decision; and

–        order the Commission to pay the costs incurred by BTPS Trustees in these appeal proceedings and in the proceedings before
the General Court.

6        The Commission contends that the Court should:

–        dismiss the appeal; and

–        order BT to pay the costs.

**The appeal**

7        BT relies on three grounds of appeal.

*First ground of appeal: substitution of grounds by the General Court*

 Arguments of the parties

8        BT submits that the General Court ‘did not confine itself’ to examining the grounds put forward by the Commission for disregarding
the additional pension liabilities — listed in paragraph 44 of the judgment under appeal — when assessing whether there was
a selective advantage. Instead, in paragraphs 46 to 52 of the judgment under appeal, the General Court set out its own, separate,
grounds for concluding that BT and BTPS Trustees had not established an indivisible link between those liabilities and the
guarantee. That substitution of grounds can be seen, for instance, in paragraphs 49 and 50 of the judgment under appeal. According
to BT, the General Court did not examine the grounds set out in the contested decision except on a secondary basis, in paragraphs 53
to 62 of that judgment.

9        BTPS Trustees concurs with the ground of appeal relied on by BT and states that the grounds set out by the General Court in
paragraphs 46 to 52 of the judgment under appeal do not correspond to those set out in recital 80 to the contested decision.
The General Court was not entitled to use the former grounds as a basis for upholding the finding made in the contested decision
that the link between the additional pension liabilities and the guarantee was not so close that those liabilities would have
to be taken into consideration in an analysis of whether there was a selective advantage.

10      The Commission contends that the first ground of appeal is unfounded.

 Findings of the Court

11      For the purposes of responding to the first ground of appeal, it should be noted that the findings of the General Court which
are called in question by BT and by BTPS Trustees form part of that Court’s examination of whether the measure in question
can be categorised as State aid. In particular, it can be seen from paragraphs 40 and 46 to 52 of the judgment under appeal
that those paragraphs are the General Court’s answer to the pleas in law raised by BT and by BTPS Trustees concerning a supposed
error in the Commission’s conclusion that there was a selective economic advantage (see the title above paragraph 40 of the
judgment under appeal relating to the first plea in law in Case T‐226/09 and the second limb of the first plea in law in Case
T‐230/09).

12      In that regard, the arguments put forward by BT and BTPS Trustees in support of that plea were summarised by the General Court
in paragraphs 40 to 45 of the judgment under appeal. Neither BT nor BTPS Trustees disputes that summary.

13      In order to respond to those arguments, the General Court observed in paragraph 46 of the judgment under appeal that it was
appropriate to examine in the first place: (i) whether the Commission had erred in not finding an indivisible link between
the additional pension liabilities and the guarantee and (ii) the merits of the grounds set out in recital 80 to the contested
decision. In that same paragraph, the General Court announced its intention of then determining whether, in the light of the
case-law, the Commission had been wrong to disregard such a link in its assessment as to whether there was a selective economic
advantage for BT in the form of the exemption from the PPF levy.

14      It can be seen from the above that, in paragraph 46 of the judgment under appeal, the General Court divided its analysis of
the plea raised at first instance by BT and by BTPS Trustees into two parts, the first of which comprised two separate branches.
Neither BT nor BTPS Trustees challenges the way in which the examination of that plea is structured.

15      As regards the first branch of the first part of the argument put forward by BT and by BTPS Trustees, that is to say, as regards
the question of an indivisible link between the additional pension liabilities and the guarantee, the General Court noted
first of all, in paragraph 47 of the judgment under appeal, that BT and BTPS Trustees had not relied on any such link between
the additional pension liabilities and the exemption from the PPF levy, which is the measure at issue. It went on to observe
that those parties’ arguments regarding the existence of such a link between the additional liabilities and the guarantee
could not be upheld.

16      The rejection of the arguments regarding the supposed link between those liabilities and the guarantee was explained in paragraphs 49
to 51 of the judgment under appeal, with the General Court concluding in paragraph 52 of that judgment that BT and BTPS Trustees
had not established that there was an indivisible link between the additional pension liabilities and the guarantee; nor,
in particular, had they shown how the two mechanisms constituted a whole with respect to BT; and that, consequently, the Commission
had not erred in not finding a link of that kind.

17      Continuing to pursue the sequence of arguments suggested by BT and BT Trustees (see paragraph 46 of the judgment under appeal),
the General Court began in paragraph 53 of the judgment under appeal to address the second section of the first part of the
argument submitted by BT and by BTPS Trustees, that is to say, the question of the merits of the grounds set out in recital
80 to the contested decision concerning the assertion that the potential advantage arising from the exemption from the PPF
levy is more than offset by the additional pension liabilities.

18      To that end, the General Court summarised — in paragraphs 54, 55, 57, 60 and 61 of the judgment under appeal — the arguments
raised by BT and by BTPS Trustees in that regard. In paragraphs 58 to 61 of that judgment, it rejected those arguments, concluding
in paragraph 62 that it was necessary to reject the first part of the plea, as set out in the first part of paragraph 46 of
that judgment, in its entirety.

19      It must be held that — contrary to the assertions made by BT and BTPS Trustees — the General Court, by its reasoning in paragraphs 46
to 52 of the judgment under appeal, responded to the specific arguments put forward before it alleging that there was an indivisible
link between the additional pension liabilities and the guarantee and, by its reasoning in paragraphs 53 to 62 of that judgment,
responded also to the arguments contesting the merits of recital 80 to the contested decision.

20      Thus the General Court responded to the first part of the plea raised by BT and by BTPS Trustees and, in doing so, adhered
to the framework that it had set for its analysis, as described in paragraph 46 of the judgment under appeal.

21      Furthermore, contrary to the assertions made by BT and BTPS Trustees in support of their first ground of appeal, the General
Court’s findings regarding recital 80 to the contested decision were not intended as a series of secondary points but as a
response to the second branch of the first part of the plea raised before it.

22      It follows from the foregoing that, in its response to that plea, the General Court did not substitute grounds at any point
but carried out a review of the legality of the contested decision by responding, to the requisite legal standard, to all
the arguments invoked at first instance in that regard by BT and by BTPS Trustees.

23      Consequently, the first ground of appeal must be declared to be unfounded.

*Second ground of appeal: error of law in the assessment of the selective nature of the advantage*

 Arguments of the parties

24      By its second ground of appeal, which is structured around four arguments, BT submits that the grounds identified by the General
Court in paragraphs 47 to 52 of the judgment under appeal as a basis for dismissing the additional pension liabilities as
irrelevant are legally flawed.

25      BTPS Trustees concurs with that ground of appeal, adding that the General Court erred in law to the extent that, in paragraph 62
of the judgment under appeal, it confirmed on the basis of paragraphs 53 to 61 of that judgment the reasoning set out in recital
80 to the contested decision. BTPS Trustees argues that the General Court incorrectly assessed the reasoning set out in each
of the three indents of that recital.

26      The Commission contends that none of the arguments put forward in support of the second ground of appeal relied on by BT can
be upheld.

 Findings of the Court

27      By its first argument, BT makes reference to paragraph 47 of the judgment under appeal, in which the General Court observed,
regarding the scope of the arguments advanced at first instance by BT and by BTPS Trustees, that those parties did not rely
on ‘any indivisible link’ between the additional pension liabilities and the exemption from the PPF levy. According to BT,
the General Court drew ‘no immediate conclusions’ from that finding but relied on it in paragraph 62 of the judgment under
appeal to support its conclusion that that exemption was selective. In reality, given the link between the additional liabilities
and the guarantee, the relevant question for the General Court should have been whether those liabilities and that guarantee
were so closely linked that neither could be examined in isolation from the other for the purposes of determining whether
the legal framework of reference confers an advantage on BT.

28      With regard to those arguments, it should first be noted that the finding of the General Court, set out in paragraph 47 of
the judgment under appeal, regarding the scope of the arguments in question is not contested by BT.

29      Second, it must be emphasised that the General Court has the freedom to structure and to expound its reasoning in whatever
way it deems necessary for the purposes of responding to the pleas raised before it. Accordingly, the way in which the General
Court chooses to structure and reason its response are not open to challenge, in the context of an appeal, through claims
seeking to establish that the General Court should have undertaken its analysis in the manner expected by the applicant.

30      However, the first argument put forward by BT constitutes just such a challenge. Accordingly, BT has failed to establish why,
in its reasoning, the General Court should have drawn any such ‘immediate conclusions’ when that Court was simply clarifying,
in paragraph 47 of the judgment under appeal, the implications of the arguments submitted to it and pointing out, in paragraph 62
of that judgment, that BT and BTPS Trustees had not proved a fact which, indeed, they had made no attempt to prove.

31      As regards the complaint that the General Court should have examined the link between the additional pension liabilities and
the guarantee, it is sufficient to note that the Court addressed that question, beginning its analysis in that regard in paragraph 48
of the judgment under appeal. Moreover, the Court’s reasoning on that point is called in question by the second argument put
forward by BT, which is examined below.

32      Accordingly, the first argument cannot succeed.

33      By its second argument, BT submits that the General Court erred in law in making a distinction between, on the one hand, the
objective of protecting the rights of certain employees in the context of the change in status of their employer and, on the
other, the objective of protecting the rights of those employees in the event of the company becoming insolvent. According
to BT, it ‘should have been clear’ to the General Court that the first objective applies equally to the pension liabilities
and to the guarantee.

34      In that regard, it should be borne in mind that, in paragraph 49 of the judgment under appeal, the General Court examined
the relationship between the additional pension liabilities and the guarantee from a number of angles.

35      Thus, the General Court found that the funding by BT of the additional pension liabilities and the guarantee do indeed have
a link for the BTPS members concerned, since both mechanisms were put in place for their benefit. However, those mechanisms
cannot be regarded as indivisible, as one can exist without the other. Indeed, according to the General Court, in the case
of additional pension liabilities, the objective is to protect the rights of certain employees in the context of the change
in status of their employer, whereas, in the case of the guarantee, the purpose is to protect the rights of those employees
in the event of their employer’s insolvency.

36      Consequently, the first mechanism applies from the moment the change in the company’s status enters into force, whereas the
second mechanism applies only to a possibility, namely, the company’s insolvency.

37      It is clear that the distinction that the General Court makes between those two mechanisms is not vitiated by any error. On
the contrary, that distinction is a relevant element of the General Court’s assessment of whether a selective advantage exists.

38      The second argument is accordingly unfounded.

39      As regards the third argument, which alleges an error of law in connection with the finding that there is no link between
the guarantee and the additional pension liabilities even though those mechanisms were adopted at the same time and in the
same regulations, it is sufficient to point out that, in the first two sentences of paragraph 50 of the judgment under appeal,
the General Court simply rejected the submission made by BT and by BTPS Trustees to the effect that the two mechanisms in
question are indivisible elements so far as BT is concerned, emphasising that the presence of a ‘temporal link’, owing to
the fact that those two mechanisms were adopted in the same regulations, is not significant.

40      In addition — and contrary to the position argued for by BT — the General Court was in no way prevented, by the mere fact
of having recognised that there was such a ‘temporal link’, from addressing later in that paragraph the question whether the
two mechanisms were linked in terms of their respective substantive content or from concluding, on the basis of its analysis
of that question, that there was no link between those mechanisms which could be regarded as indivisible.

41      Accordingly, the third argument cannot be upheld.

42      As regards the fourth argument, whereby the General Court is criticised for finding that the guarantee is not linked to the
additional pension liabilities because the guarantee would not be implemented unless the company were to become insolvent,
whereas in reality both mechanisms provide additional protection for BT’s employees, it should be noted that that argument
relates to the findings of the General Court in the fourth, fifth and sixth sentences of paragraph 50 of the judgment under
appeal. In those sentences, the General Court observed that there was no link, whether in terms of law or logic, between the
additional pension liabilities and the guarantee, since in reality those two mechanisms were not, as purported, indivisible.

43      By that reasoning, the General Court has shown to the requisite legal standard that that guarantee is underpinned, from its
inception, by considerations which are broader than those concerning the protection of additional pension liabilities. Furthermore,
those liabilities are imposed on BT while it remains in operation, whereas the guarantee does not apply unless that company
becomes insolvent.

44      It follows that the General Court did not err in law in discounting the supposed link between the two mechanisms.

45      Accordingly, the fourth argument must also be rejected.

46      As regards the line of argument relied on by BTPS Trustees, it should be noted that it relates to paragraphs 53 to 61 of the
judgment under appeal, which state the General Court’s findings regarding the arguments submitted by BT and by BTPS Trustees
concerning the merits of the reasoning set out by the Commission in the three indents of recital 80 to the contested decision.
That part of the judgment under appeal is the subject of the third ground of appeal, which is examined below.

47      The second ground of appeal must therefore be rejected in its entirety.

*Third ground of appeal: error of law in the examination of the grounds of the contested decision*

 Arguments of the parties

48      BT submits that, in paragraph 56 of the judgment under appeal, the General Court reproduces the reasoning set out by the Commission
in the first indent of recital 80 to the contested decision. The Court does not explain, however, how that reasoning is relevant
to the question of whether the advantage is selective.

49      BT also submits that, in paragraphs 57 and 58 of the judgment under appeal, the General Court focuses, not on the separation
in time between the PPF and the additional pension liabilities, but rather on the proximity in time between those liabilities
and the guarantee. Thus, the General Court did not make it clear whether it accepted or rejected the reasoning put forward
by the Commission in the second indent of recital 80 to the contested decision, which is based on precisely the separation
in time mentioned above.

50      As regards the reasoning relied on by the Commission in the third indent of recital 80 to the contested decision, BT argues
that, in paragraph 59 of the judgment under appeal, the General Court construed that reasoning as meaning that the Commission
was maintaining that there was no exclusive link between the additional pension liabilities and the guarantee, since the latter
was to be applied — where appropriate — to other kinds of liabilities. However, the General Court did not explain why the
fact that, as conceived, the guarantee also applied to situations besides pensions was legally relevant for the purposes of
justifying the contested decision. The supposedly exclusive nature of that link is legally irrelevant and as a consequence
the General Court, by endorsing that aspect of the grounds of the contested decision, itself erred in law.

51      In addition, BT submits that, in paragraph 60 of the judgment under appeal, the General Court sought to rely on its own grounds
for disregarding the additional pension liabilities when assessing whether there was a selective advantage, thereby substituting
its own grounds for those set out by the Commission in the contested decision.

52      Lastly, BT alleges that, in paragraph 61 of the judgment under appeal, the General Court carried out an ‘inadequate’ examination
of the grounds of the contested decision. It is ‘unclear ... whether the General Court accepted any of the reasons given by
the Commission as valid, and if so, on what basis it did so’.

53      The Commission contends that the third ground of appeal is unfounded.

 Findings of the Court

54      By its third ground of appeal, BT makes reference to the findings of the General Court regarding the merits of the reasoning
set out by the Commission in the three indents of recital 80 to the contested decision. In essence, BT and BTPS Trustees (see
paragraphs 25 and 46 above) complain that the General Court made errors of reasoning in its assessment of the merits of that
recital and that it substituted grounds in paragraph 60 of the judgment under appeal.

55      In that regard, it should be borne in mind that, in the context of an appeal, the purpose of review by the Court of Justice
is, primarily, to examine to what extent the General Court took into consideration, in a legally correct manner, all the arguments
relied upon at first instance by the appellant (judgment in *France Télécom* v *Commission*, C‐202/07 P, EU:C:2009:214, paragraph 41 and the case‐law cited).

56      Nevertheless, according to settled case-law of the Court of Justice, the duty incumbent upon the General Court under Article 36
and the first paragraph of Article 53 of the Statute of the Court of Justice of the European Union to state reasons for its
judgments does not require the General Court to provide an account that follows exhaustively and one by one all the arguments
put forward by the parties to the case. The reasoning may therefore be implicit, on condition that it enables the persons
concerned to understand the grounds of the General Court’s judgment and provides the Court of Justice with sufficient evidence
to exercise its powers of review on appeal (judgment in *France* v *Commission*, C‐559/12 P, EU:C:2014:217, paragraph 86 and the case-law cited).

57      It is in the light of that case-law that the various arguments submitted by BT in support of its third ground of appeal must
be examined.

58      First, as regards the argument alleging that the General Court failed to explain the relevance of the reasoning set out in
the first indent of recital 80 to the contested decision, which stated that the benefit secured to employees in the event
of the company’s bankruptcy was of ‘little interest, if any, to ... shareholders’, it should be borne in mind that, in paragraph 56
of the judgment under appeal, the General Court stated that the Commission’s assertion had to be seen in the context of that
institution’s findings regarding the impact on BT (and, accordingly, on its shareholders) of the various parts of the ‘package
of measures’. It can be seen from those findings that the shareholders were affected only by mechanisms which added value
to — or subtracted value from — the undertaking in question. Thus, the guarantee, which took effect only in the event of BT’s
bankruptcy and only for the benefit of its employees, was of no interest to BT’s shareholders and, accordingly, could not
be regarded as giving them an advantage.

59      Secondly, as regards the argument that the General Court did not take a position on the reasoning set out in the second indent
of recital 80 to the contested decision, it is important to point out that, in paragraph 58 of the judgment under appeal,
the General Court held that no temporal link existed between the additional pension liabilities and the advantage arising
from a reduced contribution to the PPF, as those two mechanisms were adopted 20 years apart.

60      Thus, in that paragraph of the judgment under appeal, the General Court explained why it was necessary to endorse the Commission’s
conclusion that there was no link between the duration of the PPF levy and the additional pension liabilities. The General
Court also observed that, in any event, the fact that those liabilities and the guarantee were adopted or exist in the same
time frame does not mean that they constitute indivisible elements, the temporal aspect being of little importance in the
circumstances.

61      Thirdly, as regards BT’s complaint about paragraph 59 of the judgment under appeal, which also concerns the reasoning set
out by the Commission in the second indent of recital 80 to the contested decision — more specifically, the possibility of
a ‘substantive link’ between the alleged burdens placed on BT and the liabilities to which the guarantee applies — it is sufficient
to note that, in that paragraph, the General Court observed that there was no ‘exclusive’ link between the additional pension
liabilities and the guarantee — which had, moreover, been acknowledged by BT — with the result that, if there was a link,
it had to be categorised as not substantively discernible.

62      In those circumstances, and contrary to BT’s assertions, the General Court provided reasons to the requisite legal standard
for concluding that the reasoning set out by the Commission in support of the contested decision in the second indent of recital
80 thereto was well founded.

63      As regards the complaint brought on the basis of a supposed substitution of grounds in paragraph 60 of the judgment under
appeal, it should be noted that the General Court was entitled to remind the parties, at the end of that paragraph, that it
had already responded, in paragraphs 47 to 52 of that judgment, to the arguments put forward by BT and by BTPS Trustees regarding
the supposed link between the guarantee and the additional pension liabilities.

64      It follows that the General Court correctly assessed the reasoning set out by the Commission in the third indent of recital
80 to its decision.

65      It cannot therefore be said that the General Court substituted any grounds.

66      Lastly, as regards paragraph 61 of the judgment under appeal, it should be borne in mind that, in that paragraph, the General
Court categorised the Commission’s statement in the third indent of recital 80 to the contested decision ‘not as a legal argument,
but as an observation which ... assumes secondary importance in the statement of reasons set out in [that] decision concerning
the existence of a selective economic advantage’.

67      It can be seen from paragraphs 47 to 62 of the judgment under appeal as a whole that the General Court rejected the arguments
relating to the third indent of recital 80 to the contested decision because, in view of the secondary importance of the considerations
set out therein, relating to the fact that the liabilities in question could have given rise to advantages for BT, those arguments
were not capable of establishing that there had been an error on the part of the Commission regarding the existence of a selective
economic advantage.

68      BT’s final argument is therefore also unfounded.

69      Accordingly, the third ground of appeal must also be rejected in its entirety.

70      It follows from all of the foregoing that the appeal must be dismissed in its entirety.

**Costs**

71      Under Article 184(2) of its Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs.
Under Article 138(1) of those rules, which apply to the procedure in an appeal by virtue of Article 184(1) thereof, the unsuccessful
party must be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since BT and BTPS
Trustees have been unsuccessful and the Commission has applied for costs, they must be ordered to pay the costs.

On those grounds, the Court (Second Chamber) hereby:

1.      **Dismisses the appeal;**

2.      **Orders British Telecommunications plc and BT Pension Scheme Trustees Ltd to pay the costs.**

[Signatures]

---

[\*](#Footref*) Language of the case: English.