The European Commission has reached decisions in the high-profile competition law cases concerning alleged State Aid to France Télécom, and alleged discriminatory financial conditions relating to 3G mobile licensing in France.

The Competition Directorate found that State Aid incompatible with the E.C. Treaty has been granted to France Télécom, in two forms: special tax treatment, and the firm offer of a shareholders' advance (by the State entity ERAP) during the financial crisis of France Télécom.

The European Commission will require France Télécom to repay the tax advantage (no fine is imposed), and as regards the firm offer of a shareholders' advance, it made the following statement:

"The offer of a shareholder’s advance should not be seen in isolation but against the backdrop of government statements from July to December 2002. The statements created expectations and confidence on the financial markets and helped maintain France Télécom’s investment rating. If the statements had not been made, no reasonable investor would have offered a shareholder’s advance in these circumstances and assumed alone a very large financial risk. The Commission does however recognise that it is the first time that it has had to examine this type of aid. It will therefore not order the recovery of this aid.

As regards the 3G mobile licence fees, the European Commission concluded that no State Aid has been granted.

European Commission press release IP/04/981 can be accessed by clicking here.

The full text of the European Commission decisions is not yet available.