EUROPEAN

Auction for telecommu-nications licences - licences to be paid for when granted - delay in payment for licences granted after meeting conditions not constituting state aidR (BT3G Ltd and others) v Secretary of State for Trade and Industry: CA (Lord Phillips of Worth Matravers MR, Lords Justice Henry and Brooke): 17 October 2001The rules of an auction for the sale of third-generation mobile phone licences provided that associated companies could not each obtain a licence.Two associated bidders, V and O, were allowed to bid but could not obtain their licences until they ceased to be associated.Large sums were paid for the licences.

BT and O2O were granted and had to pay for their licences four months before V and O, who were at the grant of their licences in different ownership.

BT and O2O sought judicial review of decisions of the secretary of state concerned with payment for the licences, complaining that by requiring BT and O2O to pay for their licences four months earlier than V and O, the secretary of state had unfairly discriminated in favour of V and O in a manner which constituted state aid.

The judge refused the applications.

BT and O2O appealed.David Vaughan QC and Mark Brealey (instructed by Simmons & Simmons) for O2O.

Richard Gordon QC, Alan MacLean and Kelyn Bacon (instructed by Ashurst Morris Crisp) for BT.

Richard Fowler QC, Jonathan Crow and Clive Lewis (instructed by the Treasury Solicitor) for the secretary of state.

Nicholas Green QC and Andrew Henshaw (instructed by Linklaters & Alliance) for V (intervener).Held, dismissing the appeal, that it was doubtful whether the fortuitous effect of the operation of contractual conditions was capable of constituting state aid within article 87(1) of the EC Treaty; that the auction had many of the important attributes of a trade sale by competitive tender which under EC privatisation rules precluded a finding of state aid; and that no state aid had been given to V and O.