GC, April 13, 2010, No T-54/07

THE GENERAL COURT (First Chamber),

Facts and procedure

1 On 12 October 2006, the Commission of the European Communities adopted Decision 2006-951-EC on the United Kingdom's application of the tax on non-domestic property to telecommunications infrastructure in the United Kingdom (No C 4-2005 (ex NN 57/2004, ex CP 26/2004)) (OJ 2006 L 383, p. 70; 'the contested decision'), in which it found that the application by the United Kingdom of Great Britain and Northern Ireland of the tax on non-domestic property to British Telecommunications plc ('BT') and Kingston Communications (Hull) plc, now KCOM Group plc ('KCOM'), from 1995 until the end of 2005 did not constitute State aid within the meaning of Article 87(1) EC.

2 By application lodged at the Registry of the Court on 19 February 2007, the applicant brought an action for annulment in part of the contested decision, in so far as the Commission wrongly found that the tax on non-domestic property applied to BT did not constitute State aid.

3 By documents lodged at the Registry of the Court on 14 May, 25 May and 1 June 2007, BT, KCOM and the United Kingdom respectively applied to intervene in support of the form of order sought by the Commission.

4 By document lodged at the Registry of the Court on 25 May 2007, Onifas Ltd applied to intervene in support of the form of order sought by the applicant.

5 By document lodged at the Registry of the Court on 11 June 2007, AboveNet Communications UK Ltd ('AboveNet'), Thus plc, Global Crossing Ltd, Gamma Telecom Ltd and VTL Ltd jointly applied to intervene in support of the form of order sought by the applicant.

6 By order of 7 September 2007, the President of the Third Chamber of the Court granted the United Kingdom leave to intervene.

7 Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the First Chamber, to which the present case was therefore assigned.

8 By order of 4 October 2007, the President of the First Chamber of the Court granted BT leave to intervene.

9 On 24 July 2008, AboveNet, Thus, Global Crossing, Gamma Telecom and VTL informed the Court that they were withdrawing their application to intervene in support of the form of order sought by the applicant. By order of 23 October 2008, the President of the First Chamber of the Court decided to remove their names from the register as applicants to intervene.

10 By documents lodged at the Registry of the Court on 29 October 2008, 26 November 2008 and 3 April 2009 respectively, Gamma Telecom, AboveNet and VTL once more applied to intervene, each on its own account, in support of the form of order sought by the applicant. The applicant has not raised any objection to those applications. By letters of 6 January, 6 February and 26 May 2009, the Commission claimed that the Court should dismiss the applications.

11 By order of 22 April 2009, the Court rejected the applications to intervene brought by Onifas and KCOM.

12 In accordance with the third subparagraph of Article 116(1) of the Rules of Procedure of the Court, the President of the First Chamber referred to the Court the decision on Gamma Telecom's, AboveNet's and VTL's applications to intervene.

Law

Arguments of the parties

13 Gamma Telecom, AboveNet and VTL submit that they have a direct and existing interest in the result of the case.

14 They submit, first, that they are active in the telecommunications sector and that they have invested considerable sums in the construction of telecommunications networks to compete with BT. They take the view that the United Kingdom's tax on non-domestic property applied to fibre optic cables owned by private sector companies in the United Kingdom represents aid that is incompatible with the common market within the meaning of Article 87(1) EC, which distorts competition between them and BT.

15 Second, following publication by the Commission of its decision to initiate the procedure laid down in Article 88(2) EC, Gamma Telecom, AboveNet and VTL provided additional evidence in support of the applicant's position, particularly as part of the comments submitted by the 'Altnet Task Force' and the 'UK Competitive Telecommunications Association' (UKCTA).

16 In its observations lodged at the Registry of the Court on 6 January, 6 February and 26 May 2009, the Commission notes that the applications to intervene of Gamma Telecom, AboveNet and VTL were made after the expiry of the six-week time-limit laid down in Article 115(1) of the Rules of Procedure. Further, the Commission notes that these new applications to intervene were made after an earlier joint application had been withdrawn. In this respect, the Commission points out that Gamma Telecom, AboveNet and VTL chose to withdraw their first application to intervene rather than put it in order. In the Commission's submission, making a further application to intervene is therefore incompatible with economy of procedure. Accordingly, if the Court is required to deal with new applications to intervene it should only accede to them if the right to intervene is very clearly established by those applications.

17 The Commission contends further that Gamma Telecom, AboveNet and VTL have not shown a direct interest in the result of the proceedings. The fact that they submitted observations during the investigation initiated by the Commission does not automatically give them a direct interest in the result of the case.

18 Furthermore, the fact that Gamma Telecom, AboveNet and VTL invested considerable sums in the construction of networks to compete with BT has not been proven. Even if it were the case, the Commission contends that Gamma Telecom and AboveNet have not shown that they occupy telecommunications infrastructure in a manner that renders them liable to the tax on non-domestic property. According to the Commission, Gamma Telecom's business model seems to be to own a network that it makes available to other telecommunications operators, it being the latter that actually provide telecommunications services to users.

19 The Commission claims that, in order to demonstrate an interest in the result of the case, Gamma Telecom, AboveNet and VTL should have shown, at the very least, that they are telecommunications operators that compete with BT and that they occupy telecommunications infrastructure in a manner that renders them liable to the tax on non-domestic property. As it is, the applications to intervene contain no clear information in that regard.

20 Finally, the memoranda of association of Gamma Telecom and AboveNet are drafted in such general terms that they are of no assistance in establishing the interest of the two companies in the result of the case.

21 Consequently, the Commission contends that the Court should dismiss the applications to intervene of Gamma Telecom, AboveNet and VTL and order them to pay the costs.

22 In its observations lodged at the Registry of the Court on 6 February and 20 May 2009 in support of the applications to intervene of AboveNet and VTL, the applicant submits essentially that, first, the sums invested by AboveNet in the construction of telecommunications networks to compete with BT are proven by the accounts of AboveNet that are a matter of public record and, second, AboveNet and VTL operate fibre optic cable networks, are competitors of BT and of the applicant and are liable to the tax on non-domestic property because they use those cables.

Findings of the Court

23 The Commission contends, in the first place, that the applications to intervene of Gamma Telecom, AboveNet and VTL were made after the expiry of the six-week time-limit laid down in Article 115(1) of the Rules of Procedure.

24 It must be recalled in this respect that, under Article 115(1) of the Rules of Procedure, '[a]n application to intervene must be made either within six weeks of the publication of the notice referred to in Article 24(6) or, subject to Article 116(6), before the decision to open the oral procedure as provided for in Article 53'.

25 According to Article 116(6) of the Rules of Procedure, '[w]here the application to intervene is made after the expiry of the period of six weeks prescribed in Article 115(1), the intervener may, on the basis of the Report for the Hearing communicated to him, submit his observations during the oral procedure'.

26 The case-law shows that Article 115(1) in conjunction with Article 116(6) of the Rules of Procedure allows parties to intervene on the basis of the Report for the Hearing during the oral procedure, subject to their application to intervene being lodged before the opening thereof (order in Case T-52-00 Coe Clerici Logistics v Commission [2002] ECR II-2553, paragraph 25, and order of the President of the Eighth Chamber of 16 September 2008 in Case T-291-06 Operator ARP v Commission, not published in the ECR, paragraph 3).

27 In the present case, given that the notice in the Official Journal of the European Union referred to in Article 24(6) of the Rules of Procedure was published on 14 April 2007, the applications to intervene of Gamma Telecom, AboveNet and VTL, which were lodged at the Registry of the Court on 29 October 2008, 26 November 2008 and 3 April 2009, respectively, were brought after the expiry of the six-week time-limit provided for in Article 115(1) of those rules, but before the Court had taken the decision to open the oral procedure.

28 As regards the Commission's argument that bringing a second application to intervene is contrary to economy of procedure and that leave to intervene should be granted only if the applicant clearly establishes its interest in intervening, it must be noted that there is nothing in the Statute of the Court of Justice of the European Union or the Rules of Procedure which precludes a new application to intervene from being lodged following the withdrawal of an earlier application, as long as the time-limits laid down in Article 115(1) of the Rules of Procedure are observed, or imposes more onerous conditions in respect of such an application.

29 As regards, in the second place, the Commission's argument that Gamma Telecom, AboveNet and VTL have not shown their interest in the result of the case, it should be recalled that, under the second paragraph of Article 40 of the Statute of the Court of Justice, which is applicable to the procedure before the General Court by reason of the first paragraph of Article 53 of that statute, any person establishing an interest in the result of a case, with the exception of cases between Member States, between institutions of the Union or between Member States and institutions of the Union is entitled to intervene in that case.

30 It has consistently been held that the concept of an interest in the result of the case, within the meaning of that provision, is to be understood as meaning a direct, existing interest in the grant of the form of order itself in support of which the application to intervene was submitted and not as an interest in relation to the pleas in law or arguments put forward. The expression 'solution' is to be understood as meaning the operative part of the final judgment which the parties ask the Court to deliver. It is necessary, in particular, to ascertain whether the prospective intervener is directly affected by the contested decision and whether his interest in the result of the case is established (order in Case T-15-02 BASF v Commission [2003] ECR II-213, paragraph 26, and order of 8 November 2006 in Case T-273-04 Brandt industries v Commission, not published in the ECR, paragraph 31 and the case-law cited).

31 Further, it is necessary to distinguish between prospective interveners establishing a direct interest in the ruling on the specific act whose annulment is sought and those who can establish only an indirect interest in the result of the case by reason of similarities between their situation and that of one of the parties (orders in Case C-76-93 P Scaramuzza v Commission [1993] ECR I-5715 and I-5721, paragraph 11; order of the President of the Second Chamber in Case T-191-96 CAS Succhi di Frutta v Commission [1998] ECR II-573, paragraph 28, and order in BASF v Commission, paragraph 27).

32 Finally, it must be recalled that, according to consistent case-law, an undertaking in competition with a beneficiary of State aid has an interest in the result of a case concerning that aid (order in Case T-330-94 Salt Union v Commission [1995] ECR II-2883, paragraph 17; order of the President of the Sixth Chamber of 6 June 2008 in Case T-423-05 Olympiaki Aeroporia Ypiresies v Commission, not published in the ECR, paragraph 19).

33 In the light of the foregoing, it should therefore be examined whether Gamma Telecom, AboveNet and VTL have an interest in the result of the case.

34 By way of a preliminary point, it should be recalled that the Court does not take a decision on the admissibility of the main action when it decides by order, pursuant to the third subparagraph of Article 116(1) of the Rules of Procedure, on an application to intervene (order in Brandt industries v Commission, paragraph 27).

35 Gamma Telecom, AboveNet and VTL made their respective applications in support of the form of order sought by the applicant. In the main action, the applicant seeks the annulment of Article 1 of the contested decision in so far as the Commission found that the application by the United Kingdom of the property tax to BT, from 1995 until the end of 2005, did not constitute State aid within the meaning of Article 87(1) EC.

36 In their respective applications to intervene, Gamma Telecom, AboveNet and VTL submit that they are active in the fixed-line telecommunications sector and that they have invested considerable sums in the construction of telecommunications networks to compete with BT. VTL adds that it is in rateable occupation of telecommunications infrastructure under licence from BT.

37 In its observations on the applications to intervene of Gamma Telecom, AboveNet and VTL, the Commission states in essence that the prospective interveners have not shown that they compete with BT and have not adduced evidence that they are in occupation of telecommunications infrastructure and thus liable to the tax on non-domestic property.

38 It must be noted, first, that in its defence the Commission does describe Gamma Telecom, AboveNet and VTL as competitors of BT, albeit in general terms.

39 Further, it is appropriate to recall, as stated in the contested decision, and uncontested by the parties, that, in the United Kingdom, the tax on non-domestic property is levied on land, buildings and rateable plant and machinery. Business rates are levied on telecommunications infrastructure just as on other business properties. Plant and machinery that are rateable for telecommunications infrastructure are cables, fibres, wires, conductors or any system of such items used or intended to be used in connection with the transmission of communications signals. It is also common ground between the parties that liability for the tax on property falls on the person in occupation of the rateable hereditament, that is to say the person who is in actual, exclusive and non-transient occupation of the hereditament.

40 The application to intervene submitted by VTL and the annexes to it show that VTL is using BT's telecommunications infrastructure under a licensing agreement. The Commission does not contest that fact. It follows that the Commission cannot claim that VTL does not compete with BT and demand proof from VTL that it is liable to the tax on that infrastructure.

41 As regards AboveNet, the Court finds that the applicant's observations on AboveNet's application to intervene and its annexes show, first, that AboveNet's principal activity is 'the provision of high bandwidth optical services over the company's fibre optic network' and, second, that it has paid the tax on the telecommunications infrastructure since it appears on the 2000 and 2005 rating lists drawn up by the Valuation Office Agency, an executive agency of the tax authorities.

42 Finally, as regards Gamma Telecom, point 115 of the contested decision describes the company as a telecommunications operator and indicates its rate liability for 2005, which means that the Commission cannot contest the fact that Gamma Telecom is a competitor of BT.

43 In addition, in their respective applications to intervene, Gamma Telecom, AboveNet and VTL assert that they are members of the Altnet Task Force and UKCTA, which the Commission does not question. In the comments submitted by the Altnet Task Force and UKCTA in the course of the procedure provided for in Article 88(2) EC, annexed to the applications to intervene, it was stated explicitly that the Altnet Task Force and UKCTA represent fixed-line telecommunications operators that compete with BT and, more specifically, that Gamma Telecom and VTL are members of the Altnet Task Force.

44 Moreover, it must be pointed out, as stated in point 4 of the contested decision, that Gamma Telecom, AboveNet and VTL participated in the procedure provided for in Article 88(2) EC by submitting comments in their own name and through the Altnet Task Force and UKCTA.

45 In the light of all the foregoing considerations, it must be concluded that it is apparent from the documents in the file that Gamma Telecom, AboveNet and VTL compete at least to some extent with BT. It follows that they must be granted leave to intervene.

46 In accordance with paragraphs 24 to 27 above, the rights of Gamma Telecom, AboveNet and VTL will be those provided for in Article 116(6) of the Rules of Procedure (see, to that effect, order of the President of the Third Chamber of 30 January 2008 in Case T-444-04 France Télécom v Commission, not published in the ECR, paragraphs 16 and 17, and order in Olympiaki Aeroporia Ypiresies v Commission, paragraph 31).

Costs

47 Pursuant to Article 87(1) of the Rules of Procedure, a decision as to costs is to be given in the final judgment or in the order which closes the proceedings.

48 At this stage in the proceedings, costs must therefore be reserved.

On those grounds,

THE GENERAL COURT

hereby orders:

1. Gamma Telecom Ltd, AboveNet Ltd and VTL Ltd are granted leave to intervene in Case T-54-07 in support of the form of order sought by Vtesse Networks Ltd.

2. Pursuant to Article 116(6) of the Rules of Procedure of the Court, the Registrar shall in due time communicate to Gamma Telecom Ltd, AboveNet Ltd and VTL Ltd the Report for the Hearing, on the basis of which they may submit any observations during the oral procedure.

3. The costs are reserved.