BT Group PLC, the U.K.'s former phone monopoly, and its pension fund lost their bid to overturn a European Union order forcing the repayment of as much as £16.6 million ($26.6 million) in exemptions from pension rules.
The EU Court of Justice in Luxembourg rejected BT's arguments in their entirety, according to a ruling from the bloc's highest tribunal Wednesday.
The European Commission, the 28-nation EU's antitrust regulator, decided in 2009 that an exemption for the £40 billion ($64.2 billion) BT Pension Scheme, London, from contributing to the country's Pension Protection Fund was unlawful state aid. The EU probe was triggered by a complaint from one of BT's competitors.
The U.K.'s Pension Protection Fund was created in 2004 to guarantee pensions when sponsor companies go bankrupt and was financed by their contributions. BT's exemption was created under a so-called crown guarantee at the time of its privatization in 1984 to protect the staff's pensions.
“We accept but are disappointed by the court's decision,” Dan Thomas, a spokesman for BT, said by phone.
In its 2009 decision, the EU said the recovery of the aid would “restore the situation that existed prior to the granting of the aid” and that this could be “achieved once the incompatible aid is repaid by BT.”
The commission said at the time that BT set aside an amount of £16.6 million in an escrow account corresponding to the levies payable until 2008.