Berlusconi Facing Antitrust Probes Over Digital TV Subsidies

by Ulrika Lomas, for LawAndTax-News.com, Brussels

03 January 2006

Following the European Commission's decision to launch an antitrust investigation into subsidies offered to purchasers of digital decoders in Italy, the country's competition authority announced that it would be examining the role of Prime Minister Silvio Berlusconi in the matter.

The EC last month revealed that it would be examining the subsidies for digital decoders granted by the Italian authorities in 2004 and 2005.

The measures provided public grants to buyers of decoders which receive programmes in digital terrestrial technology.

According to the Commission:

"The subsidy is not technology-neutral because although it is also offered for decoders using cable technology, it is not available for decoders using satellite broadcasting."

"The Commission’s investigation will aim at establishing whether these incentives are liable to distort competition. EC Treaty state aid rules require Member States not to grant aids or subsidies which distort or threaten to distort competition within the EU’s Single Market."

In 2004 and 2005 Italy paid out grants to consumers worth over €200 million in order to buy or rent digital decoders, without notifying the measure to the Commission.

Consequently, the Commission received two complaints from terrestrial and satellite television operators, which argued that even if the direct beneficiaries of the grant are final consumers, the measure may constitute an indirect advantage to the current terrestrial television broadcasters and to the terrestrial network operators.

The separate but parallel national investigation into whether Berlusconi violated Italian conflict of interest rules was reportedly prompted by complaints from several Italian legislators into money set aside for the subsidies in the 2006 budget.

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