Action brought on 17 October 2012 - Virgin Media v Commission

(Case T-460/12)

Language of the case: English

Parties

Applicant: Virgin Media Ltd (Hook, United Kingdom) (represented by: J. Ellison, D. Slater, Solicitors, and D. Waelbroeck, lawyer)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

Declare the application admissible and well-founded ;

Annul the State aid decision SA.33540 of the Commission of 12 June 2012 published in the Official Journal of the European Union on 25 July 2012 declaring the aid measure "City of Birmingham - Digital Districts NGA Network" compatible with Article 107(3)(c) of the Treaty on the functioning of the European Union; and

Order the defendant to pay all costs and expenses in these proceedings.

Pleas in law and main arguments

In support of the action, the applicant relies on two pleas in law.

First plea in law, alleging an incorrect statement of the facts in the contested decision, which includes, inter alia:

a finding that the applicant had no competitive presence in the Digital Districts of Birmingham comprising Digbeth, Eastside and the Jewellery Quarter (the "Relevant Area");

a finding that the Relevant Area has only a modest next generation access ("NGA") broadband capability consisting of BT Group plc's planned Fibre-to-the-cabinet ("FTTC") roll-out in a part of the area;

a finding that broadband speeds in the relevant area are substantially limited to low end (20 Mbps download and 2 Mbps upload);

a finding that the market has failed because certain specific services are not available to a category of small and medium sized enterprises ("SMEs") in the area at prices they can afford;

a finding that no party had any objection to Birmingham City Council's NGA broadband scheme relating to the Digital Districts (the "Scheme");

a finding that the mapping and consultation process confirms that the Scheme will not have a negative impact upon competition.

Second plea in law, alleging an incorrect application of the State aid rules and in particular those expressed in the Community Guidelines for the application of state aid rules in relation to rapid deployment of broadband networks (OJ 2009 C 235, p. 7) (the "Broadband Guidelines"). The defendant's misapplication of the TFEU's State aid rules and the Broadband Guidelines includes, inter alia:

a failure to rebut a presumption against the legality of State aid in an area with competing residential broadband services (paragraphs 77 and 78 of the Broadband Guidelines);

a failure to show a market failure (paragraph 35 of the Broadband Guidelines), in particular to define the relevant market that had allegedly failed; and to adduce meaningful evidence to find a "failure" on the basis of price alone;

a failure to conduct a proper market consultation (paragraph 51 (a) of the Broadband Guidelines);

a failure to assess the impact of the State aid upon competition in the relevant markets in accordance with paragraphs 34 and 35 of the Broadband Guidelines.

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