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Vivendi fires back as regulator orders stake reduction in Mediaset or Telecom Italia

French media company Vivendi has said it is considering legal action after Italian communications authority AGCOM ordered it to cut its stake in either Italian broadcaster Mediaset or telecommunications firm Telecom Italia within a year.

Vivendi is the single biggest shareholder in Italy’s main telco, with 24 per cent, and has recently built up a 28.8-per-cent interest in Mediaset. Vivendi and Mediaset are currently engaged in a bitter dispute. Mediaset, one of the leading sports broadcasters in Italy, is seeking damages from Vivendi after it stepped away from an April 2016 agreement to take full control of pay-television broadcaster Mediaset Premium.

Under the original deal, Vivendi was set to acquire 100 per cent of Mediaset Premium and exchange 3.5-per-cent stakes with Mediaset. Vivendi made a revised offer to sell a 3.5-per-cent stake in its business in exchange for a 20-per-cent shareholding in Mediaset Premium and a 3.5-per-cent stake in Mediaset, but this was rejected by Mediaset at the end of July.

AGCOM opened its investigation into Vivendi on December 21 after Mediaset filed a complaint amid the French firm building up its stake to become the biggest investor behind Fininvest, the holding company of former Italian Prime Minister Silvio Berlusconi.

In its ruling issued late yesterday (Tuesday), AGCOM said Vivendi exercised significant influence over both Mediaset and Telecom Italia and is therefore in breach of anti-trust rules. It has threatened to fine Vivendi an amount equal to between two and five per cent of its revenues unless it divests its interest.

The regulator has not specified how much Vivendi will need to divest in either company but has ordered the French group to present a “specific plan of action” within 60 days. AGCOM said the links between Vivendi, Telecom Italia and Mediaset risked a negative effect “on the existing level of competition in the markets involved and on the degree of pluralism in the media system”.

In a statement, Vivendi said: “Vivendi has always operated within Italian law, and specifically the Gasparri Law regarding the protection of media pluralism from the creation of dominant positions. In particular, it is undisputable that Vivendi neither controls nor exercises a dominant influence on Mediaset which is controlled on an exclusive basis by Fininvest with a stake close to 40 per cent.

“Vivendi reserves the right to take any appropriate legal action to protect its interests, including filing an appeal to the AGCom decision at the Regional Administrative Court (TAR) and to submit a formal complaint to the European Commission for the breach of EU law.

“Vivendi continues to be fully confident in the rule of law and is certain that finally its rights will be recognised.”

Vivendi and Mediaset’s ongoing tussles come with Mediaset Premium set to contest rights tenders for domestic Serie A football and the Uefa Champions League, both of which are due to be held in the first half of this year.