UPDATE 1-EU court dismisses France Telecom fine appeal

Thu Apr 2, 2009 6:49am EDT

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(Adds European Commission reaction)

LUXEMBOURG, April 2 (Reuters) - France Telecom FTE.PA kept rivals out of the high-speed Internet market with artificially low prices, the European Union's highest court ruled on Thursday, upholding a 2003 European Commission decision.

The European Court of Justice also upheld a lower court's decision to dismiss France Telecom's appeal against a 10.35 million euro ($13.7 million) fine imposed by the EU's executive Commission for abuse of a dominant market position.

"The Court of Justice finds that the Court of First Instance did not in any way err in law in dismissing France Telecom's action," the top court said in a statement.

The Commission, the European Union's top antitrust regulator, had accused France Telecom's Wanadoo unit of charging consumers rates for high-speed network access during 2001-2002 that did not cover costs.

It had said France Telecom hoped to offset those losses with considerable profits on the prices it charged Wanadoo's competitors for access to the network.

The Court of First Instance had in January 2007 upheld the Commission's decision.

The Commission welcomed Thursday's ruling, saying it showed that dominant market operators must not abuse their position to prevent competition.

"Since the Commission's position taken in 2003, there have been many more Internet service providers in France and the price of Internet access has fallen substantially," Commission spokesman Jonathan Todd said at a regular briefing in Brussels.

"The French market is now one of the most competitive in the European Union. Broadband penetration has increased substantially," he said. (Writing by Foo Yun Chee and Bate Felix, editing by Dale Hudson)

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