EU court gives Murdoch a win over Berlusconi TV company

(LUXEMBOURG) - A European court dismissed on Tuesday an appeal by Mediaset, the television company owned by Italian Prime Minister Silvio Berlusconi, ordering it and other broadcasters to repay illegal state aid.

The decision backs up the European Commission's opinion that the subsidies handed over in 2004-5, as part of Italy's switchover from analogue to digital broadcasting, were disproportionate and distorted competition as the measure at issue did not apply to digital satellite decoders.

The EU order followed a complaint by satellite broadcasters including Sky Italia, wholly-owned by media tycoon Rupert Murdoch's News Corp.

Berlusconi owns the three biggest commercial television stations and controls state television, leading to accusations of conflicts of interest.

The ruling by the European Court of Justice in Luxembourg says the government must claim money back handed to Mediaset.

"The Italian subsidy granted for the purchase or rental of digital terrestrial decoders constitutes state aid and must be recovered," the court ruled.

The measure "is not technologically neutral and confers an indirect advantage on digital terrestrial broadcasters to the detriment of satellite broadcasters," the court ruling added.

Mediaset had maintained that it legitimately believed that the received subsidy was consistent with the EU commission's policy of promoting the digital broadcasting system.

Italy's switchover to digital TV began in 2001 and must be finished by 2012.

A 2004 law allowed a state subsidy of 150 euros for every user switching to terreststrial digital TV.

Judgement of the General Court in case T-177/07 - Mediaset v Commission : full texts