Court orders France Telecom to repay $1.7b

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France Telecom has been ordered to pay back up to €1.14 billion ($1.72 billion) to the French government, after a court ruled that tax exemptions the carrier received from 1994- 2002 were illegal.

On Monday the Luxembourg-based Court of First Instance rejected France Telecom's challenge to an EC decision that it illegally received exemptions to business tax and ordered that it pay back between €798 million and €1.14 billion.

The court said the exemption did not fully offset the full benefit that France Telecom received from a levy that it paid the French government instead of the taxes.

France Telecom can appeal the decision to the EU's highest court within two months.

The European Competition Commission ruled in 2004 that the tax arrangements were illegal, and in 2007 the European Court of Justice ruled that the government had failed to reclaim the monies as required.