Judgment — ECLI:EU:C:2001:668
Date: 2001-12-06
Language of the case: French
Court formation: Sixth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices;Telecommunications
Concepts: Telecommunications;Public undertakings
Procedure: Action for failure to fulfil obligations - successful
Origin: France

Summary of the Judgment 
1. Competition — Public undertakings and undertakings to which Member States grant 
special or exclusive rights — Telecommunications sector — Directives 90/388 and 
96/19 — Universal voice telephone service — Traditional service provider with an 
almost complete monopoly — National scheme for sharing the net cost of universal 
service provision obligations with other organisations — Necessity — None 
(Commission Directives 90/388, Art. 4c and 96/19, Art. 1(6)) 
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SUMMARY — CASE C-146/00 
2. Approximation of laws — Telecommunications sector — Directive 97/33 — Uni­
versal voice telephone service — National scheme for sharing the net cost of universal 
service provision obligations — Criteria for setting the reference values for calculating 
the contributions required of service providers — Principle of transparency 
(Parliament and Council Directive 97/33, Art. 5(1)) 
3. Approximation of laws — Telecommunications sector — Directive 97/33 — Uni­
versal voice telephone service — National system for sharing the net cost of universal 
service provision obligations — Criteria for determining the cost components 
(Parliament and Council Directive 97/33, Art. 5(1), Annex III) 
1. Article 4c of Directive 90/388, inserted 
by Directive 96/19, on national 
schemes for sharing out the net cost 
of providing a universal fixed voice 
telephone service permits Member 
States to put in place such a scheme 
only where it is 'necessary' for sharing 
the net cost of meeting universal service 
provision obligations imposed on tele­
communications service providers with 
other organisations. That condition is 
not fulfilled where the traditional ser­
vice provider still enjoys an almost 
complete monopoly in fixed voice 
telephone services, to which the duty 
to provide a universal service applies, 
and where the Member State con­
cerned merely formulates some general 
remarks about the creation of the new 
mobile telephone market, without stat­
ing precisely how that event might have 
affected the net cost of its universal 
service. 
(see paras 25-30) 
2. Article 5(1) of Directive 97/33 provides 
that, when establishing a mechanism 
for sharing out the net cost of meeting 
universal service obligations, Member 
States must take due account of the 
principle of transparency. It is therefore 
important that the reference values 
chosen for setting any contribution 
demanded of new market entrants are 
set comparing like with like so as to 
ensure transparency and enable new 
entrants to calculate their probable 
costs and income. 
(see paras 48-50) 
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COMMISSION v FRANCE 
3. Under Article 5(3) of Directive 97/33, 
which provides that the net cost of 
universal service obligations is to be 
calculated in accordance with Annex 
III of that directive, only those costs 
that are a direct consequence of the 
provision of universal service may be 
taken into account. Establishing a level 
playing field for telecommunications 
providers requires an objective and 
transparent costs structure. It is there­
fore not permissible under Directive 
97/33 to ascribe flat-rate or imprecise 
values to the components of the net 
cost of universal service provision, 
rather than carrying out specific calcu­
lations. 
(see para. 60) 
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