The European Court of Justice has ordered France Telecom to pay business tax it says it owes dating back to 1994, upholding a 2004 decision by the European Commission.

Seven years ago, the EC ruled that the company, Europe's fourth-largest telecoms operator, paid less business tax than it should have from 1994 to 2002. Commissioners considered that to be an illegal form of state aid.

That decision was upheld by the European General Court, which prompted France Telecom, which said it had already repaid €1.02 billion, to take its case to the highest court in the EU.

The European Court of Justice statement said: "The court confirms the judgment of the General Court finding that France Telecom benefited from state aid incompatible with the common market each year from 1994 to 2002.

"The Commission's decision finding that aid existed and ordering its recovery is valid."

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