Berlusconi's Mediaset ordered to repay state aid

(LUXEMBOURG) - Europe's top court on Thursday ordered Mediaset, the media empire of Italian Prime Minister Silvio Berlusconi, to repay state subsidies it obtained in the sale of digital TV decoders.

The Italian government approved legislation in 2004 offering a 150-euro incentive to people who bought or rented digital terrestrial decoders to receive television signals. The subsidy was capped at 110 million euros.

The law was extended in 2005 with a lower incentive, 70 euros, with the same spending limit of 110 million euros. A consumer who chose satellite television instead of terrestrial TV did not benefit from the scheme.

The European Court of Justice ruled Thursday that the subsidies "constitute state aid which is incompatible with the common market."

The Luxembourg-based court added: "The broadcasters which benefited indirectly from that state aid are obliged to repay amounts corresponding to the advantage obtained thereby."

The court said it was up to Italian authorities to calculate the amount that must be recovered.

The subsidies offered an incentive to consumers to buy a digital terrestrial decoder and simultaneously limited the costs for broadcasters such as Mediaset, the court said.

Two Mediaset rivals, Centro Europa 7 and Sky Italia, a channel owned by Australian-born media tycoon Rupert Murdoch, had filed a complaint over the subsidy with the European Commission.

The European Union's antitrust watchdog ordered the Italian state in 2007 to recover the subsidies, saying it gave rise to competition distortions, and Mediaset subsequently challenged the decision.

Judgement of the European Court of Justice in Joined Cases C-471/09 P, C-472/09 P, C-473/09 P, C-474/09 P, C-475/09 P, C-476/09 P Diputación Foral de Vizcaya and Gobierno Vasco v Commission