Italian TV Broadcaster|Must Repay State Aid

(CN) - Europe's highest court upheld an order forcing Italy's largest private TV broadcaster to repay millions in subsidies allowing consumers to buy digital-broadcast decoders.

Italy introduced the $185 subsidy in 2001, and in 2005 reduced the subsidy to $86. The high court's ruling means that terrestrial broadcasters must return the money gained from the subsidy, plus interest.

After satellite broadcasters complained about the subsidy, the European Commission investigated and determined that Italy's policy constituted state aid.

Digital broadcaster Mediaset SpA, founded in the 1970s by Italian Prime Minister Silvio Berlusconi, sued the commission to have the decision annulled.

The Court of Justice dismissed the entire action, ruling that the Italian measure was not technologically neutral, as consumers must buy or rent digital decoder equipment to receive the subsidy. This caused a distortion in competition, the court said, as TV broadcasters were able to consolidate their market position over satellite providers.

The exclusion of satellite providers in the policy was not justified, the Luxembourg-based court ruled, adding that it should be up to the national courts to set any recovery amount.

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