ECJ Finds In Favor Of Vivendi, Says Italy’s Law To Block Deal Unlawful

The European Union’s top court ruled on Thursday that an Italian law that forced Vivendi to forfeit two thirds of its stake in Italian broadcaster Mediaset violates the bloc’s rules, a court ruling said. 

The Court of Justice ruling could strengthen Vivendi’s hand in a long-running dispute, helping the French group to regain voting rights for its full stake in Mediaset, controlled by the family of Italy’s former Prime Minister Silvio Berlusconi. 

Vivendi, led by French billionaire Vincent Bollore, and Mediaset have been embroiled in a legal dispute since the French conglomerate withdrew from a deal to buy Mediaset’s pay TV unit in 2016. The French group, which is also a major shareholder in Italy’s biggest phone company Telecom Italia, subsequently built up a hostile 28.8% stake in the Italian broadcaster. 

Italy’s communications watchdog ruled in 2017 that Vivendi’s stakes in Mediaset and Telecom Italia broke rules designed to prevent a concentration of power in the telecoms and media sectors and ordered it to reduce one of its holdings to below 10%. 

To comply, Vivendi transferred two-thirds of its voting rights in Mediaset into an arm’s-length trust, which has been barred from voting at the Italian group’s shareholder meetings. 

Vivendi had challenged Italy’s communications regulator’s decision on its Mediaset and Telecom Italia stakes in an Italian court, which referred the case to the EU court. 

The Court on Thursday ruled that the Italian law excessively limited the right to do business anywhere in the EU, compared to the need to protect the variety of sources in the media sector, following on the advice of the Advocate General in December 2019. 
“The Italian provision sets thresholds which bear no relation to the risk to media pluralism”, the ruling said.