Action brought on 19 February 2007 - Vtesse Networks v Commission

(Case T-54/07)

Language of the case: English

Parties

Applicant: Vtesse Networks Ltd. (St. Albans, United Kingdom) (represented by: H. Mercer, Barrister)

Defendant: Commission of the European Communities

Form of order sought

Annul Article 1 of the decision insofar as it determined that the application by the United Kingdom of the tax on non-domestic property to BT plc from 1995 to the end of 2005 does not constitute aid within the meaning of Article 87(1) EC;

order the Commission to pay Vtesse's costs of this action.

Pleas in law and main arguments

The applicant seeks the annulment of Commission Decision 2006/951/EC¹ of 12 October 2006 finding that the application by the United Kingdom of the tax on non-domestic property to BT plc and Kingston Communications plc from 1995 until the end of 2005 does not constitute aid within the meaning of Article 87(1) EC.

The applicant alleges that the Commission failed to consider and/or to investigate the competitive disadvantage suffered by the applicant vis-à-vis BT plc at the margin when bidding alongside BT plc for contracts with customers for high capacity retail leased lines using optical fibres.

The applicant submits that the Commission erred in law in the application of Article 87(1) EC in particular by failing to define the relevant market and thereby failing to identify the advantage in fact granted by business rates to BT plc in relation to competition at the margin.

Furthermore, the applicant claims that the Commission committed a manifest error of appraisal of the significance and relevance of the class of contracts where the applicant competed with BT plc and failed to investigate sufficiently the facts of competition at the margin leading to the Commission's reliance on a market share for BT plc of 12% when the most relevant market share for BT plc was, according to the applicant, 78%.

Finally, the applicant contends that the Commission did not sufficiently reason the contested decision with regard to the competition actually occurring between the applicant and BT plc.

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¹ - Commission Decision of 12 October 2006 - 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) - notified under document number C(2006) 4378) (OJ 2006 L 383, p. 70).