II - 4315Joined Cases T-427/04 and T-17/05
French Republic and France Télécom SA
v
Commission of the European Communities
(State aid — France Télécom’s business tax regime for the years 1994 to 2002 — 
Decision declaring the aid incompatible with the common market and ordering its 
recovery — Advantage — Limitation period — Legitimate expectations — Legal 
certainty — Breach of essential procedural requirements — Collegiality — Rights of 
the defence and procedural rights of other interested parties)
Judgment of the Court of First Instance (Third Chamber), 30 November 2009   II - 4322
Summary of the Judgment
1. Commission — Principle of collegiality — Scope — Possibility for the Commission to em ­
p
ower one of its members to adopt specific categories of administrative or management 
measure
(
Arts 219 EC and 253 EC)
2. State aid — Examination by the Commission — Administrative procedure
(Art. 88(2) and (3) EC)
SUMMARY — JOINED CASES T-427/04 AND T-17/05
II - 43163. State aid — Examination by the Commission — Administrative procedure — Obligation on 
the Commission to put the parties concerned on notice to submit their observations
(
Art. 88(2) EC)
4. State aid — Concept — Special tax regime of an undertaking
(Art. 87(1) EC)
5. State aid — Commission decision — Assessment of legality by reference to the information 
available at the time the decision was adopted
(
Art. 87 EC)
6. State aid — Concept — Selective nature of the measure — Derogation from the common tax 
regime — Justification based on the nature and economy of the system — Burden of proof
(
Art. 87(1) EC)
7. State aid  — Recovery of unlawful aid  — Aid granted in breach of the procedural rules 
of Article  88 EC  — Possible legitimate expectation on the part of the beneficiaries  — 
P
rotection — Conditions and limits
(
Arts 87(1) and 88 EC; Council Regulation No 659/1999, Art. 14)
8. State aid — Commission decision finding aid incompatible with the common market and 
ordering its repayment — Possibility for the Commission to leave it to the national author­itie
s to calculate the exact amounts to be repaid
(
Art. 88(2) EC)
9. State aid  — Recovery of unlawful aid  — Ten ­year limitation period of Article  15 of 
Regulation No 659/1999 — Point at which time starts to run for the purposes of the limit a­
tion p
eriod
(
Art. 88(2) EC; Council Regulation No 659/1999, Art. 15)
1. Under Article  219 EC, the Commission 
acts by a majority of the number of its memb
ers. The principle of collegiality 
thus established is based on equality in the decision-making process as between the members of the Commission and sig-
nifies that decisions must be deliberated 
on jointly and that all the Members of the Colle
ge bear collective responsibility at 
political level for all decisions adopted.
Alt
hough the Commission may, without 
necessarily acting in breach of the prin -
ciple of collegiality, empower one of its 
II - 4317FRANCE AND FRANCE TÉLÉCOM v COMMISSION
members to adopt specific categories of 
administrative or management measure, 
the decisions by which the Commission 
rules on the existence of State aid, on its compatibility with the common market 
and on the need to order its recovery in -
volve an examination of complex factual 
and legal issues and cannot, in principle, 
be categorised as administrative or man-
agement measures. It follows that, since the enacting terms and rationale of such decisions, for which reasons must be 
stated pursuant to Article 253 EC, consti-
tute an indivisible whole, it is for the Col -
lege alone, in accordance with the prin
-
ciple of collegiality, to adopt them both. In  
pr
inciple, therefore, it is for the College 
of Commissioners alone to adopt the de -
finitive version of decisions ruling on the  
existence of State aid and on its com -
patibility with the common market. After that adoption, only small corrections of 
spelling or grammar may still be made to 
the text of that decision, since any further alteration is the exclusive province of the 
College.
H
owever, it is possible for the College of 
Commissioners to instruct one or more of its Members to adopt the definitive 
text of any decision the substance of which has already been determined in 
discussion. Where the College exercises 
that power, it is for the Community ju -
dicature, when considering the question of the irregularity of the exercise of that 
power, to ascertain whether the Col -
lege may be regarded as having adopted all t
he factual and legal elements of the 
 decision in question.
(see paras 116-119)
2. Respect for the rights of the defence is, in 
all proceedings initiated against a person 
whic
h are liable to culminate in a mea s-
ure adversely affecting that person, a fun-damental principle of Community law. That principle requires that the person 
against whom the Commission has initi-
ated an administrative procedure must have been afforded the opportunity, dur -
ing that procedure, to make known his views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission 
to support its claim that there has been 
an infringement of Community law.
In S
tate aid matters, the Commission 
cannot be required to present a complete 
analysis on the measure in question in its 
notice of intention to initiate the formal investigation procedure. The Commi s-
sion must, however, define sufficiently 
 
t
he framework of its investigation in  
or
der to enable the Member State against 
which the procedure is opened to put forward its comments on all the matters of law or fact constituting the grounds 
of the final decision by which the Com -
mission rules on the compatibility of the 
measure in question with the common 
market.
SUMMARY — JOINED CASES T-427/04 AND T-17/05
II - 4318Accordingly, the mere fact that, in the  
c
ontested decision, the Commission  
altered its analysis as regards the nature  
of the State measure at issue cannot  
en
tail, with regard to the Member State 
concerned, infringement of the rights of 
the defence unless the information con -
tained in the decision initiating the for -
mal investigation or, subsequently, pr o-
vided during the exchange of arguments during the administrative procedure, had not enabled the national authorities to 
discuss properly all the matters of law or 
of fact contained in the contested dec i-
sion. On the other hand, the differences 
between the contested decision and the 
decision initiating the formal investig a-
tion, arising as a result of the Commi s-
sion’s review, on its own initiative, of the arguments, in whole or in part, put for -
ward by the said Member State, cannot 
give rise to an infringement of that Mem-
ber State’s rights of defence.
(s
ee paras 136-138)
3. In the context of the administrative pr o-
c
edure regarding State aid, undertakings 
which receive aid are considered only to be ‘interested parties’ in that procedure. It follows that the undertaking which 
received aid, far from enjoying the same 
rights of defence as those which indi-viduals against whom a procedure has 
been instituted are recognised as having, 
has only the right to be involved in the administrative procedure to the extent appropriate in the light of the circum -
stances of the case.M
oreover, whilst the Commission cannot 
be required to present a complete analy -
sis of the aid at issue in its notice of inten   -
tion to initiate the procedure under  
Ar
ticle 88(2) EC, it must define sufficiently  
t
he context of its investigation so as not 
to render meaningless the right of inter -
ested parties to submit their comments. 
For that reason, the right of the inter -
ested parties to information does not go 
beyond the right to be heard by the Com -
mission. In particular, it cannot extend to the general right to comment on all the potentially key points raised during the formal investigation procedure.
(s
ee paras 146-149)
4. The concept of advantage for the pur -
p
oses of Article 87(1) EC extends to any 
measure which exempts an undertaking from a charge which it would otherwise have to bear. The concept of aid is wider 
than that of a subsidy because it em -
braces not only positive benefits, such as 
subsidies themselves, but also measures 
which, in various forms, mitigate the 
charges which are normally included in the budget of an undertaking and which, without being subsidies in the strict 
sense of the word, are therefore similar in 
character and have the same effect. A c-
cordingly, a measure by which the public 
authorities grant to certain undertakings 
a tax exemption which, although not involving a transfer of State resources, 
places the persons to whom the tax e x-
emption applies in a more favourable 
financial situation than other taxpayers 
constitutes State aid for the purposes of 
Article 87(1) EC.
II - 4319FRANCE AND FRANCE TÉLÉCOM v COMMISSION
Where the Commission examines a 
measure likely to constitute State aid, it 
is required to take into consideration all 
the effects of that measure for the poten -
tial beneficiary and, in particular, to de -
termine, if necessary, the specific charges imposed on an advantage. On the other hand, the mere fact that a specific e x-
emption measure is offset, from the r e-
cipient’s point of view, by an increase in a specific charge which is different from and unconnected with the former does 
not save the former from categorisation 
as State aid.
Thus, determination whether over-tax -
ation of an undertaking in a certain  
p
eriod, by reason of a fixed levy, offsets a 
tax differential from which it benefited in another period therefore depends on the analysis of the objective characteristics of 
that fixed levy and on whether it may be 
regarded as a charge which is connected with the advantage for the undertaking 
concerned as a result, in certain circum -
stances, of its liability to tax under a sp e-
cial tax regime.
(s
ee paras 195-196, 206-208)
5. The lawfulness of a decision concerning 
State aid is to be assessed in the light of 
t
he information available to the Commi s-
sion at the time when the decision was adopted. Consequently, the undertaking whic
h benefited from an aid cannot  
argue before the court that the information  
u
sed by the Commission in the contested 
decision was unrealistic where the Com-
mission relied on figures communicated 
to it by the Member State during the ad -
ministrative procedure.
(s
ee paras 219, 224)
6. For the purposes of applying Article 87(1)  
EC, the question to be decided is  
whe
ther, under a particular statutory 
scheme, a State measure is such as to f a-
vour certain undertakings or the produc -
tion of certain goods as compared with other undertakings which are in a legal and factual situation that is comparable 
in the light of the objective pursued by 
the measure at issue. However, the con -
cept of State aid does not refer to State measures which differentiate between 
undertakings and which are therefore 
prima facie selective, where that differ -
entiation arises from the nature or the 
overall structure of the system of charges 
of which they form part.
The bur
den of proving the existence 
of justification in the nature or overall 
structure of that system lies in principle 
with the Member State. It follows that an undertaking which has benefited from 
a State measure cannot, in the context 
of an action for annulment, rely in sup-port of its arguments on facts of which 
SUMMARY — JOINED CASES T-427/04 AND T-17/05
II - 4320the Commission was unaware at the time 
when it adopt
ed the contested decision.
(see paras 228-229, 232)
7. It follows from the principle of the pr o-
t
ection of legitimate expectations, which 
is especially applicable in relation to the review of State aid pursuant to Article 14 of Regulation No 659/1999 laying down 
 
de
tailed rules for the application of  
Article  88 EC, that the protection of the legitimate expectations of the recipient 
of State aid can be relied upon, provided 
that the recipient has sufficiently precise assurances, arising from a positive action taken by the Commission, which leads 
him to believe that a measure does not 
constitute State aid for the purposes of Article 87(1) EC. If the Commission does 
not give an express opinion on a measure  
which has been notified to it, on the 
other hand, its silence cannot, on the basis 
of the principle of the protection of the 
legitimate expectations of the recipient undertaking, preclude recovery of that  
aid.
For that reason, in view of the mandatory 
nature of the review of State aid carried  
out by the Commission pursuant to 
Article 88 EC, recipient undertakings may  
not, in principle, entertain a legitimate 
expectation that the aid is lawful unless it 
has been granted in compliance with the pr
ocedure laid down in the said article. A 
diligent businessman should normally be 
able to determine whether that procedure has been followed. Accordingly, a Mem-
ber State whose authorities have granted 
aid contrary to the procedural rules laid down in Article 88 EC may not plead the 
legitimate expectations of the recipients 
in order to justify failure to comply with the obligation to take the steps necessary to implement a Commission decision in -
structing it to recover the aid.
The p
ossibility of a recipient of aid which 
is granted unlawfully relying on exce p-
tional circumstances on the basis of which it legitimately assumed the aid to 
be lawful and therefore opposed its r e-
payment cannot however be excluded, if 
there is evidence to demonstrate the e x-
istence thereof.
M
oreover, notification of a State measure  
which may afford an advantage to an  
undertaking is the mechanism, provided for  
under t
he Treaty, which makes it possible 
for Member States to ensure that they do not grant unlawful aid and for undertak -
ings to ensure that they do not benefit 
from such aid. However, where a special 
tax regime constitutes a procedure for imposing business tax which derogates from the general law and relates to two 
 
under
takings, the possibility of it  
b
eing State aid cannot be automatically 
excluded. In that regard, in the absence 
of special circumstances, where aid is 
implemented without prior notification to the Commission, so that it is unla w-
ful under Article 88(3) EC, the recipient 
II - 4321FRANCE AND FRANCE TÉLÉCOM v COMMISSION
of the aid cannot then have a legitimate 
 expectation that the aid is lawful.
(see paras 261-263, 270, 276)
8. The Commission is not required, in a de-
c
ision ordering the recovery of unlawful 
State aid, to state the exact amount of the 
aid to be recovered. In this area, Com -
munity law requires merely that recov -
ery of aid granted unlawfully restore the position to the status quo ante  and that 
repayment be made in accordance with 
the rules of national law, subject to the 
requirement that they do not restrict the scope and effectiveness of Community law. It is therefore sufficient if it is po s-
sible to calculate the amount of the aid to be recovered, without overmuch dif -
ficulty, on the basis of the information 
given in the decision. Accordingly, the 
Commission may confine itself to declar -
ing that there is an obligation to repay the 
aid at issue and leave it to the national a u-
thorities to calculate the exact amount of 
aid to be repaid, particularly where that 
calculation requires tax and social sec u-
rity systems, the detailed rules of which 
are laid down in the applicable national 
legislative provisions, to be taken into 
account.
(s
ee paras 297-299)9. Under Article  15(1) of Regulation 
No 659/1999, the powers of the Commi s-
sion t
o recover unlawful aid are subject  
to a limitation period of 10 years. It is ap -
parent from Article  15(2) of the said  
r
egulation that the point at which time 
starts to run for the purposes of the limi -
tation period is the date on which the aid whose recovery is ordered by the Com -
mission may be regarded as having been granted, that is to say, where the grant of the aid depends on the adoption of legal -
ly binding acts, the date on which those acts are adopted.
Wher
e a legal act establishes a special tax 
regime applicable in the future, the limi -
tation period cannot be regarded as star t-
ing as from the date on which that act was adopted, on which date it is impo s-
sible to determine with certainty whether that special regime confers an advantage which might constitute State aid. By con -
trast, the date on which a first advantage is actually granted must be taken into account. That is the case with aid which 
consists not in special tax provisions a p-
plicable to the beneficiary, but in a tax 
differential representing the difference 
between the amount of the business tax 
contributions which it would have had to pay if it had been subject to the tax under the general law and the amount which it 
was actually charged under the special 
tax provisions to which it was subject.
(s
ee paras 318, 320, 322, 324)