Gleiss Lutz wins case for Deutsche Telekom: General Court of the European Union orders European Commission to pay damages for unlawfully withholding default interest on overpaid portion of reduced fine
A Gleiss Lutz team has successfully represented Deutsche Telekom against the European Commission before the General Court and obtained a damages award of EUR 1.75 million.
The European Commission had fined Deutsche Telekom around EUR 31 million in 2014. Deutsche Telekom provisionally paid the fine in January 2015, but brought a nullity action against the fine decision. The Court partially upheld the action in December 2018 and reduced the fine by around EUR 12 million. Although the European Commission repaid the amount, it refused to pay default interest for the period between payment of the fine and repayment of the overpaid portion.
Deutsche Telekom filed a nullity action against this decision before the General Court, as well as an action to order the European Commission to pay damages.
In its judgment of 19 January 2022, the Seventh Chamber (Extended Composition) of the General Court overwhelmingly upheld the nullity and damages suit and ordered the European Commission to pay Deutsche Telekom damages in the amount of the default interest it had refused to pay.
This judgment strengthens the rights of companies that have been fined by the European Commission. If these fines are cancelled or reduced by a court after they have been provisionally paid, the Commission is generally obliged to pay default interest on the overpaid amount. According to the General Court, the interest serves as lump-sum compensation for withholding the use of the money paid, and is intended to encourage the European Commission to exercise particular caution when imposing large, immediately payable fines.
The following Gleiss Lutz team represented Deutsche Telekom in the proceedings: Dr Christian von Köckritz (partner, lead), Dr Ulrich Soltész (partner), Philip Lohs (all EU/Competition/Antitrust, Brussels), Dr Petra Linsmeier (partner, Competition/Antitrust, Munich).