EU Court:EUR1.2 Million German Fee For O2 Phone Numbers Illegal

BRUSSELS -(Dow Jones)- The European Court of Justice Thursday ruled that Germany wasn't entitled to charge the German unit of phone company O2 PLC a EUR1.2 million fee for the allocation of phone numbers.

The amount charged to O2 Germany by the German telecommunications authority in 1999 represents 0.1% of the estimated annual sales generated by the numbers allocated.

O2 Germany took the matter to court, arguing that it had been treated unfairly compared with former state monopoly Deutsche Telekom, which had received a reserve of 400 million phone numbers for free.

Judges agreed with O2's argument and ruled that treating the former state monopoly more favorably than its competitors represented unfair practice that could hinder access to the market for new entrants.

The matter will now return to the German federal court that originally ruled on the case. However, the European court's interpretation is binding for the German judges.

Also affected by the ruling was regional telecommunication provider ISIS Multimedia Net GmbH, a unit of mobile communication provider Arcor, itself a majority-owned unit of the U.K.'s Vodafone Group.

ISIS Multimedia Net was charged EUR19,000 by the telecommunication authority in 1999 and also appealed the decision.

Both companies could recover most of the money they paid the German state. According to E.U. law, a fee paid for the allocation of phone numbers can't be higher than the administrative costs generated.

The EUR1.2 million and EUR19,000 paid by O2 and ISIS Multimedia Net, respectively, significantly exceeded the administrative costs.

The amount the two companies can recover from the telecommunication authority has yet to be determined by the German court.

-By Nadine Goertz, Dow Jones Newswires; +32 2 741 1 480; nadine.goertz@dowjones.com

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Posted to the site on 20th October 2005