France Telecom is likely to have to pay back €1bn in illegal subsidies it received from the French government, following an 18-month investigation by Mario Monti, the EC Competition Commissioner.

The allegations against France Telecom come in two parts:

• That the French government offered favourable tax rates, worth as much as €1bn, to unfairly favour the company between 1994 and 2002.

• That either the French government offered the telco a line of credit, or that comments from the government to suggest such credit amounted to favourable treatment.

Originally, the Commission investigated a €9bn line of credit - but could not prove it existed. It is now looking at whether comments by French government ministers in themselves offered illegal support. A decision in the case is expected before the Commission's August break. ®

Related stories

EC rules against illegal 'subsidy' of France Telecom [1]
EC fines Wanadoo 10m for predatory pricing [2]
France Telecom bail-out faces EC probe [3]

Links

1. http://www.theregister.co.uk/2004/05/12/france_telecom_illegal_aid/
2. http://www.theregister.co.uk/2003/07/16/ec_fines_wanadoo_euro_10m/
3. http://www.theregister.co.uk/2003/01/09/france_telecom_bailout_faces_ec/