In order to secure the funding of public broadcasting after the reduction of advertising on public television channels, Article 33 of French Law No. 2009-258 of 5 March 2009 on audiovisual communication and the new public television service, codified in Article 302 bis KH of the French General Tax Code, introduced a 0.9% turnover tax on telecommunications operators whose revenues for end-users services exceed € 5 million.

The adoption of this charge provoked strong reactions from French telecom operators which criticized it for having no connection with their activity and thus being unjustified. Considering that this charge infringes Directive 2002/20/EC of 7 March 2002 on the authorisation of electronic communications networks and services so-called “Authorisation Directive”, the European Commission initiated infringement proceedings against France and finally referred the case to the ECJ which resulted in the decision of 27 June 2013.
 
Article 12 of the “Authorisation Directive” states that “any administrative charges imposed on undertakings providing a service or a network under the general authorisation or to whom a right of use has been granted shall (…) cover only the administrative costs which will be incurred in the management, control and enforcement of the general authorisation scheme and of rights of use and of specific obligations as referred to in Article 6(2)”.
 
The European Commission considers that the charge at issue falls within the scope of the “Authorization Directive” since it is imposed on telecom operators in the framework of the general authorization scheme. However, the basis for this charge is not the administrative costs of the general authorisation scheme as required by article 12 "but elements relating to the operator’s activities or turnover”. In addition, this charge is not intended to fund the activities of the French regulation authority. Therefore, according to the European Commission, the charge at issue would not be compliant with European Union law.
 
The ECJ, for its part, adopted a diametrically different analysis. It observes that the basis for this charge is not the general authorization scheme for accessing the telecommunications services market or the granting of rights to use radio frequencies or numbers. It considers that this charge is in relation to the “operator’s activity of providing electronic communications services to end-users in France”. The ECJ concludes that the charge at issue is not an administrative charge within the meaning of article 12 of the “Authorisation Directive” and does not fall within its scope. The ECJ thus ruled against the European Commission’s claim.
 

This decision is of major importance since it allows, at the European Union scale, the possibility for Member States to impose non-administrative charges on the provision of electronic communications services.
 
At the national level, the ECJ decision also has a significant impact. First, it benefits to the French State which will avoid the repayment of the sums collected under this tax since 2009 whose total amount was estimated in the budget law for 2013 to € 1.3 billion. The collection of this special charge will continue to provide an inflow of approximately € 250 million per year which secures the current public broadcasting funding scheme. This decision could also support the broader vision of “a funding scheme of the creation of content by all those who benefit from its distribution” in a context of convergence as noted by the ARP i.e the Civil Society of Writers, Directors, Producers (Société civile des Auteurs, Réalisateurs, Producteurs).

This decision is, however, a real disappointment for electronic communications operators already weakened by difficult economic conditions, fierce competition and the need to invest significantly in new high-speed infrastructures.

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