European court mandates France Telecom pay back state aid

A European court has denied France Telecom's appeal of a European Commission ruling that it should repay $1.5 billion in state aid. Europe's second-highest court, the Court of First Instance, held up the EU's ruling that France Telecom got this aid from 1994 until 2002 via a special tax regime.  

Through this special tax regime, the telco only had to pay the French government an annual fee versus paying local taxes including business taxes. In making its ruling, the court said that only having to pay the annual fee and not local taxes gave it a financial advantage over competitive telecom players. Although the EU did not reveal the amount that France Telecom would have to repay to the government, estimates say it could be between $1.2 billion to $1.4 billion.

For more:
- Wall Street Journal has this article

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