Brussels, 25/01/2007 (Agence Europe) - The European Commission has decided that subsidies for digital decoders granted by Italy in 2006 do not violate EC Treaty state aid rules (Article 87(1)) as they were offered for all decoders, regardless of the transmission platforms, are therefore technology-neutral, and proportionate to the objective of promoting the transition to digital TV and to interoperability. However, the Commission also decided that subsidies provided in 2004 and 2005 were incompatible under the state aid rules, because they did not allow consumers the free choice of transmission platform and created an undue distortion of competition by excluding satellite technology.
Following complaints from terrestrial and satellite television channels, the Commission opened a formal investigation procedure into subsidies awarded in 2004 and 2005 to consumers to allow them to purchase or hire digital decoders. After consulting market operators, the Commission concluded that the subsidies provided an indirect advantage to the incumbent terrestrial television broadcasters and to the cable operators insofar as they allow them to develop their digital audience. The Commission recognised that public intervention could be beneficial in the switchover to digital to overcome a specific market failure or to ensure social or regional cohesion. It was categorical, however, in its assertion that this intervention must be the most appropriate means and be limited to the minimum necessary so as not to unduly distort competition. The exact criteria for determining compliance with these conditions are set out in Article 87 of the EC Treaty and were raised and clarified in the decision on subsidies to digital television in the German Land of Berlin-Brandenburg (see EUROPE 9066). Referring to that decision, the Commission considered that some of the Italian subsidies did not comply with Community rules. It decided, therefore, that the broadcasters who had benefited the most from the subsidies should reimburse the state aid.
Competition Commissioner Neelie Kroes stressed the impartiality of the Commission on this matter. “These two decisions,” she said, “show once again that the Commission is committed to help the transition to digital TV and to interoperability. But the Commission is not ready to accept state support that creates unnecessary distortions of competition between transmission platforms”. (cd)