European court ruling hits Mediaset

Berlusconi may have to give up Rete 4

By NICK VIVARELLI

ROME — The European Court of Justice has ruled that the allocation of Italy’s TV airwaves stifles competition. The finding could force Silvio Berlusconi’s Mediaset to relinquish its Rete 4 station and also impact Italian media laws.

Italian legislation “has had the effect of preventing operators without broadcasting radio frequencies from accessing the market,” the court said in a statement on Thursday.

The Brussels ruling is the result of long-gestating legal action brought by Italo network Europa 7, which had been granted an Italian broadcasting license in 1999.

At that time, under legislation meant to promote pluralism, Rete 4 was supposed to shift from terrestrial to satellite to make way for new players.

But under Italy’s subsequent revolving-door governments those laws were initially ignored and then changed, when Berlusconi was prime minister, in ways that have kept Rete 4 on-the-air and prevented Europa 7 from starting transmissions.

While the Italian government will have to take the EU ruling into account, it is unclear how this will be done and whether it will really hurt Mediaset, given that Italy at present is in the throes of a government crisis, with Berlusconi widely tipped as becoming prime minister for the third time.

“There is no risk for Rete 4,” Mediaset said on Thursday, in a statement that claimed the finding only gives Europa 7 the right to sue the Italian government for damages.

Mediaset shares, however, dropped 2.3% on news of the ruling.

Europa 7 in a statement expressed confidence that now it would soon be on-the-air and that it would also be awarded several hundred million euros in damages.

“Now there can be no more impediments from the ministry of communications or the antitrust authority, such as the ones that so far have prevented us from exercising our rights,” the Europa 7 statement said.