T-Mobile parent wins $2 million in back interest on reduced EU fine

LUXEMBOURG (CN) — The EU owes Europe’s largest telecommunications provider $2 million, the bloc’s second-highest court ruled Wednesday. 

A copy of the ruling was not available in English by press time, but a statement from the General Court traces the dispute back to 2014 when the European Commission — the EU’s executive body — found that Deutsche Telekom had violated antitrust rules by squeezing out broadband competitors in Slovakia via its subsidiary Slovak Telekom.

The commission fined Deutsche Telekom 31.1 million euros ($35 million), an amount that the Berlin-based company appealed but still paid. Eventually the lower EU court reduced the fine by 12 million euros ($13 million), and a higher court upheld that decision last year. 

Although the EU refunded the difference, it refused to pay interest, arguing that it had not itself earned interest on the money. During the period from when Deutsche Telekom paid the fine in 2015 until when the EU was ordered to reduce the fine in 2018, interest rates were negative. Deutsche Telekom, which is known in the United States as T-Mobile, again complained to the Luxembourg-based court. 

On Wednesday, the five-judge panel found that failing to pay Deutsche Telekom the interest incurred was a “serious breach” of EU law. Regardless of the EU’s ability to earn interest on the money, the court concluded, Deutsche Telekom could not use that money to further its business interests. “The commission is not entitled to determine the conditions under which it will pay default interest,” the court said in a statement. 

Using the standard rate of 3.55% set by the European Central Bank, the court calculated that the EU owed 1.8 million euros ($2 million) to Deutsche Telekom. Although in the Deutsche Telekom case the total interest was relatively small, for larger fines, the EU could find itself on the hook for billions of euros. 

In a dispute that dragged on for six years, the commission unsuccessfully pursued a $15 billion fine against Apple for a sweetheart tax deal with Ireland. The EU has also fined Google’s parent company Alphabet $5 billion for anti-competitive behavior, in a case that is still ongoing. The seventh chamber dismissed this concern, arguing that the EU must already take into account the fact that fines may be reduced on appeal. 

Wednesday’s decision could be appealed. The commission has not yet said whether it plans to do so. 

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