By DPA,
Luxembourg : The European Union’s court Tuesday threw out an appeal from a digital-TV company owned by the family of Italian Prime Minister Silvio Berlusconi, ordering it and other broadcasters to pay back possibly millions of euros in illegal state aid.
Berlusconi, a media baron turned politician, has regularly been accused of abusing his position to support his business interests. The ruling by the European Court of Justice (ECJ) orders his government to claim money back from his family’s company, Mediaset.
The General Court, the ECJ’s lower chamber, “dismisses the action in its entirety” and holds that the state aid in question “confers an indirect advantage on digital terrestrial broadcasters to the detriment of satellite broadcasters,” a court statement said.
The case dates back to 2004, when the Italian government offered a subsidy of 150 euros ($183 at current prices) to anyone who bought or rented a digital television decoder.
The law was officially aimed at speeding up Italy’s transfer to digital TV.
But the subsidy only applied to decoders of land-based digital TV signals, not satellite signals. That represented a huge advantage for Mediaset, which specialises in terrestrial digital TV, and a corresponding handicap for satellite-TV channels such as Sky.
“The selective nature of the measure resulted in a distortion of competition between digital terrestrial broadcasters and satellite broadcasters,” the court said.
Following complaints from Sky Italia and other operators, the EU’s executive, the European Commission, ruled in 2007 that the subsidies were illegal and demanded that the Italian government claim back money, equivalent to the value of the commercial boost they received, from the TV companies which benefited from it.
Mediaset challenged that ruling, arguing that it honestly believed the subsidy was in line with EU rules, which say that state aid is not allowed to favour one type of technology over another.
The court rubbished that claim, saying, “a diligent business operator should have known … that the measure at issue was not technologically neutral.”
A spokeswoman for the European Commissioner for Competition, Joaquin Almunia, welcomed the ruling.
“The commission can approve subsidies to help consumers equip themselves with the latest TV technology, but subsidies have to be technology neutral, so they cannot favour one group of companies vis-a-vis another,” Amelia Torres said.
It now falls to the Italian courts to calculate how much money Mediaset and other companies involved have to pay back.