registration document France Telecom 2009 - Orange.com

20 NOTES
financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
TO THE ANNUAL FINANCIAL STATEMENTS OF FRANCE TELECOM S.A.
euros. France Telecom believes that Numericâble suffered
no loss and that its claims are unfounded.
■ In July 2007, Free fi led a complaint with the French Competition
Council against France Telecom concerning the rollout of fi ber
optic networks in France. This complaint included a claim for
injunctive relief to require France Telecom to provide access
to its civil engineering facilities for purposes of implementing
high capacity broadband, and to do so at cost-oriented
tariffs, while prohibiting France Telecom from marketing
its own retail service offering or rolling out its own facilities
outside Paris until such time as these measures are taken.
On February 12, 2008, the Competition Council rejected
Free’s request for injunctive relief concerning the conditions of
access to existing civil engineering infrastructure established
on the public domain for deploying new optical local loops
on the residential market (FTTH). The Competition Council
acknowledged that France Telecom had been engaged since
October 2007 before the Telecom and Postal Regulatory
Authority (ARCEP) in a constructive process to develop an
offer to access its cable ducts. It considered that there was
no serious and immediate threat to competition justifying the
pronouncement of the measures requested. Nevertheless, it
decided to pursue its investigation into the substance of the
case. This investigation should be extended to the issue of
sharing fi ber optic cabling in buildings which is the subject of
a further complaint from Free.
■ After failing in July 2008 to obtain in a summary procedure
the suspension of the sale of the “Orange Sport” service,
Free brought substantive proceedings before the Paris
Commercial Court seeking to enjoin France Telecom from
conditioning the subscription to this service on the purchase
of an Orange broadband access subscription, together with
an order that France Telecom pay damages indemnifying a
loss estimated at 54 million euros. Neuf Cegetel joined the
proceedings, also claiming damages but calling for an expert
report to value its loss. On May 14, 2009, the Paris Court of
Appeals overturned the judgment of the Commercial Court
dated February 23, 2009, which had ordered France Telecom ,
subject to a fi nancial penalty, to cease conditioning the linear
TV broadcast of the Orange Sport service on the purchase
of an Orange broadband access subscription and which
had appointed a panel of experts to enable it to evaluate
the amount of loss incurred by Free and Neuf Cegetel. This
decision allowed France Telecom to resume marketing of the
Orange Sport service to new subscribers. SFR and Free fi led
an appeal before the French Supreme Court.
At the same time, in February 2009, Canal+ and SFR fi led
a complaint with the French Competition Authority alleging
tied sales between the Orange Sport service and the Orange
broadband Internet access offers and predatory pricing on
the tariffs of Orange Sport, and challenging the conditions
under which, in February 2008, the French professional
football league granted France Telecom the right to broadcast
football games in France. The Competition Authority opened
an investigation but, at this stage, France Telecom has no
information on these proceedings.
■ In March 2009, Vivendi and Iliad brought a joint complaint
before the European Commission for abuse of a dominant
position with respect to France Telecom ’s practices on the
local loop and broadband Internet access wholesale markets
since 2006. Vivendi and Iliad allege that France Telecom is
engaged in price squeezing on the downstream markets for
telephone services access and broadband access to multiservice
offers. The Commission has not yet decided what
action it will take as a result of this complaint.
■ On December 9, 2009, SFR announced that it had fi led
a complaint with the French Competition Authority that
France Telecom had engaged in anticompetitive practices on
the market of the reduction of zones in local communities not
yet covered by a broadband network. The company Altitude
Infrastructure fi led a similar complaint in July 2009. These
complaints challenge the time allowed and the tariffs set by
France Telecom to provide its wholesale offer to operators
that wish to respond to local communities, or the conditions
in which France Telecom itself bids in response to tender
offers issued by the local communities. At this stage of the
procedure, France Telecom has no access to the complaints
of SFR and Altitude Infrastructure.
Mobiles
■ Bouygues Telecom Caraïbe and Outremer Telecom brought
claims before the Competition Council respectively in
July 2004 and July 2005, regarding practices of Orange
Caraïbe and of France Telecom S.A. in the mobile and fi xed to
mobile markets in the Caribbean and in French Guyana. The
Competition Authority joined the two proceedings in 2007
and, on December 9, 2009 ordered Orange Caraïbe and
France Telecom S.A. to pay a fi ne of 63 million euros in total, of
which 28 million euros was payable by France Telecom S.A.
France Telecom paid the fi ne but lodged an appeal against
this decision before the Paris Court of Appeals.
At the same time as this procedure before the French
Competition Authority, described in the preceding paragraph,
in March 2009, the company Digicel (formerly Bouygues
Telecom Caraïbe) initiated legal action for damages before
the Paris Commercial Court amounting to an estimated
329 million euros, stemming from these practices.
France Telecom believes that these demands are unfounded
and that their amount would in any case appear to be totally
unjustifi ed.
8.2 Other Proceedings
Civil and commercial proceedings, arbitration
■ On and after December 2003, the former MobilCom CEO
Gerhardt Schmid (directly or through Mr Wilhelm, the courtappointed
liquidator in his personal bankruptcy) and his
spouse Sybille Schmid-Sindram (in her name or through her
company, Millenium, a shareholder of MobilCom), together
with certain other minority shareholders of MobilCom,
brought legal actions against France Telecom through
three different procedures, either for hidden domination of
MobilCom (minority shareholders’ action), or for breach of
the partnership created by the Cooperation Framework
Agreement (CFA) dated March 23, 2000 in respect of the
roll out of UMTS in Germany (Gerhardt Schmid’s action).
They claimed indemnifi cation from the prejudice allegedly
suffered because of the withdrawal from the UMTS project,
materialized by the drastic drop of the MobilCom share price,
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM