Italian Broadcaster Still Must Repay State Aid

(CN) - An Italian broadcaster has to repay the government for state subsidies consumers obtained to buy digital TV decoders in 2004 and 2005, Europe's highest court ruled.

Italy began digitizing its TV signals in 2001, and the government passed a law granting a $185 public subsidy to consumers who wanted to buy or rent a digital decoder. That subsidy was reduced in 2005 to $86.

The television companies Centro Europa 7 Srl and Sky Italia filed complaints with the European Commission regarding the subsidies, and in 2007, the commission found the subsidies were state aid in favor of digital broadcasters.

"While stating that the transition from analogue to digital television broadcasting was a common interest objective, the commission held that the subsidy was not proportionate to the pursuit of that objective and gave rise to distortions of competition," according to a statement from the European Union's Court of Justice.

The Italian media company Mediaset sought an annulment of the commission decision before the EU General Court. The court dismissed the action, and "confirmed that the subsidy constituted an economic advantage for terrestrial broadcasters, such as Mediaset, since it had enabled them to consolidate their existing position on the market as compared with that of new competitors."

Mediaset appealed to the Court of Justice.

On Thursday, the court affirmed the decision and dismissed Mediaset's appeal.

"[T]he General Court correctly held that aid the direct beneficiaries of which are consumers may nonetheless constitute indirect aid to economic operators, such as those broadcasters," the court said.

"The General Court was also correct to reject Mediaset's argument that the Commission had not demonstrated that there was a link between the subsidy and the broadcasters in question," the statement continues.

The Court of Justice refused to calculate the exact amount of money to be recovered, leaving the decision to Italian authorities. It issued a similar decision last year.

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