Italian legislation restricting access to the Italian media sector for companies from other Member States is contrary to the European Union’s right of establishment, according to the conclusions delivered on Wednesday 18 December by the Advocate General of the Court of Justice of the EU in Case C-719/18.
In order to safeguard the pluralism of information, these regulations prohibit any company from collecting, directly or indirectly, through controlled or related companies, revenues exceeding 10% of the total revenues of the ‘Integrated Communications System’ (ICS) where that company at the same time holds a share exceeding 40% of the total revenues of the electronic communications sector in Italy.
However, in 2016, Vivendi, the French parent company of a group operating in the media and communication sector, acquired 28.8% of the share capital of Mediaset, an Italian company in the same sector, while Vivendi already held a significant position in the Italian electronic communications sector.
Mediaset therefore accused Vivendi of violating Italian regulations. This accusation was contested by the latter company on the grounds that the regulation is contrary to the right of establishment enshrined in Article 47 of the TFEU.
Although the Advocate General acknowledged that the protection of pluralism of information can in theory justify the adoption of national measures restricting the freedom of establishment, he also stressed that such measures must be proportionate to this objective.
However, the Italian legislation seems disproportionate in three respects.
First, he considers that it defines the scope of the electronic communications sector too narrowly.
Secondly, he considers it disproportionate to set at 10% the maximum percentage of ICS revenues that can be collected by companies whose revenues in the electronic communications sector exceed 40% of the total revenues of that sector.
Finally, he considers that it is disproportionate to calculate the income of related companies as if they were controlled companies, when the company (Vivendi) holding a share of the voting rights in another company (Mediaset) greater than these figures is not, de facto, in a position to exercise a significant influence on the latter.
To consult the Advocate General’s Opinion (in French): https://bit.ly/2tvz6sk (Original version in French by Damien Genicot)