EC case against FT falters

15 Jul 2004

The European Commission’s plan to penalize France Telecom for receiving illegal state aid has hit a problem because of objections by the EC’s own lawyers. Solicitors are reported by the Financial Times to be uncomfortable with aspects of the draft ruling against the group, in particular official’s attempts to place monetary value on government statements of support for France Telecom. In August and October 2002 the French government announced it would take appropriate measures to support FT should it run into refinancing difficulties. The Commission sought to quantify the benefits of these statements, as well as the effect on investor confidence of a EUR9 billion credit line supposedly granted to the company but never drawn. The draft ruling reached by the Competition Commission is also believed to order France Telecom to repay EUR1.1 billion in unpaid taxes.

France, Orange Group