On January 19, 2022, the General Court ordered the Commission to pay default interest on the excess amount of a fine paid by Deutsche Telekom. The interest relates to a €31 million fine the Commission imposed on Deutsche Telekom in October 2014 for infringing Article 102 TFEU by implementing margin squeezing practices in the Slovak broadband market. Before paying the fine in 2015, Deutsche Telekom appealed to the General Court which, in 2018, reduced its fine to €19 million.
In 2019, the Commission repaid the €12 million to Deutsche Telekom, but refused to pay default interest on this amount on the basis that it only had to repay the fine plus any interest yields generated after the fine payment. Deutsche Telekom appealed this refusal, requesting the General Court to order the Commission to pay default interest of 3.55% per annum to compensate Deutsche Telekom’s deprival of the €12 million caused by the Commission’s defective decision.
The General Court found that, by refusing to pay default interest, the Commission infringed its duty to take the necessary measures to comply with a judgment under Article 266 TFEU. Article 266 TFEU precludes the Commission from controlling the scope of repaying after a fine reduction or annulment.
The General Court dismissed the Commission’s argument that default interest should only arise after the judgment reducing or annulling the fine. Reiterating its case law, the General Court affirmed that its unlimited fine jurisdiction under Article 261 TFEU and Article 31 of Regulation EC No. 1/2003 when reviewing a Commission decision applies from the outset (“ex tunc”). Consequently, the excess amount paid by Deutsche Telekom should be considered unduly paid on, and default interest should start accruing from the date of the fine payment, not the date of the judgment finding that the fine was unduly high.
This judgment follows the Court of Justice’s Printeos ruling, which established that the accrual of default interest from the moment of paying a fine incentivizes the Commission to give “particular attention” when adopting fining decisions.
Editors: Conor Opdebeeck-Wilson and Thorsten Schiffer