Case T-427/04: Action brought on 13 October 2004 by French Republic against Commission of the European Communities
Date: 2005-01-22
Institutions: Court of First Instance
Subjects: European Commission, France, State aid, action for annulment (EU), control of State aid, tax system, telecommunications industry

22.1.2005

EN

Official Journal of the European Union

C 19/31

Pleas in law and main arguments:

In support of its action, the applicant relies, first, on an infrin-
gement of essential procedural requirements and the rights of
the defence. According to the applicant, the Commission based
its decision on factors, namely ministerial proposals of 12 July
2002, which are outside the scope of the procedure as defined
by the decision to open the procedure. The applicant claims
that the Commission should have extended the procedure by
adopting a new decision to open it.

The applicant also relies on an error of law in relation to the
concept of State aid within the meaning of Article 87(1) EC.
According to the applicant, the Commission wrongly applied
the principle of the private investor who is fully informed of
the conditions of a market economy. According to the appli-
cant, since the ministerial proposals did not amount
to a
commitment on the part of the State and could not be cate-
gorised as State aid, the principle of the fully-informed private
investor was not applicable. The applicant also maintains that
the Commission wrongly held there to be aid on the basis of
two separate events which, taken separately, it would have to
accept did not comprise the elements necessary for the categor-
isation of State aid to apply. Those events are the statements of
July 2002 and the draft shareholder's advance of December
2002.

Thirdly, the applicant claims that the Commission committed a
manifest error of assessment when it took the view that an
analysis of the contents of the interview of 12 July 2002
allowed it to be concluded that the State was giving an under-
taking as a shareholder, which would have had an influence on
the markets in December.

submits

the applicant

Lastly,
the reasoning adopted
contains contradictions and inadequacies which lead to the
contested decision being vitiated on the ground of a lack of
proper reasoning.

that

Action brought on 13 October 2004 by French Republic
against Commission of the European Communities

(Case T-427/04)

(2005/C 19/65)

(Language of the case: French)

An action against the Commission of the European Commu-
nities was brought before the Court of First Instance of the

European Communities on 13 October 2004 by the French
Republic, represented by its Agents Ronny Abraham, Géraud
de Bergues and Stéphanie Ramet, with an address for service in
Luxembourg.

The applicant claims that the Court should:

— annul in its entirety Commission Decision No C(2004)361
of 2 August 2004 concerning State aid paid by France to
France Télécom;

— order the Commission to pay the costs.

Pleas in law and main arguments:

The contested decision in this case held that the business tax
regime applying to France Télécom (FT) between January 1994
and December 2002 constituted State aid which was incompa-
tible with the common market.

In support of its claims, the applicant argues, first, that the
Commission committed a manifest error of assessment and an
error of law. In that regard,
it challenges the Commission's
analysis of the tax regime applying to FT under Law No 90-
568 of 2 July 1990 on the organisation of the French Postal
Service and France Télécom. This had led the Commission to
treat the levy paid by FT between 1991 and 1993 as being of a
mixed character, whereas it was purely fiscal in nature and to
take the view that FT had been subject to two separate tax
regimes between 1991 and 2002, whereas there had been a
single regime, divided into two periods. The defendant should
accordingly have applied an offset in respect of the 1991-2002
period.

The applicant also claims infringement of Article 15 of Regu-
lation No 659/1999 laying down detailed rules for the applica-
tion of Article 93 of the EC Treaty, inasmuch as the Commis-
sion should have held that there had been a period of ten years
between the day when the alleged aid had been granted, 2 July
1990, being the date on which Law No 90-568 completely and
definitively established the tax regime in question, and the first
request for information from the defendant on 28 June 2001.

The applicant also relies on the principle of legitimate expecta-
tions, in that the contested decision requires the recovery of aid
from FT, and of its own rights of defence, in that the Commis-
sion made a finding as to the existence of aid without having
given the French authorities the opportunity of commenting on
an essential element of its arguments, namely the mixed char-
acter of the levy paid by FT between 1991 and 1993.