# CE2004088EN.01053601.xml

| 8.4.2004 | EN | Official Journal of the European Union | CE 88/536 |
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8.4.2004

EN

Official Journal of the European Union

CE 88/536

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(2004/C 88 E/0548)

WRITTEN QUESTION E-0806/04

by Antonio Di Pietro (ELDR) to the Commission

(15 March 2004)

Subject:   Tremonti Law — Mediaset

Subject:

By law No 489 of 8 August 1994 (‘Tremonti Law’) the Mediaset company, which operates in the information and media sector, was granted tax reductions of at least LIT 243 billion. As a direct result of these reductions, Mediaset has considerably strengthened its own dominant position on the market, cancelled out huge budgetary losses and been quoted on the stock exchange. The law's decision-making procedures were, for the most part, established by the head of the media company, who was at the same time Prime Minister, and hence faced with an obvious conflict of interest. In the restricted television segment of the market, the Mediaset company is in actual fact the main if not exclusive beneficiary of the law. The beneficiary's involvement in the decision-making procedures of the provision or act constitutes a serious violation of competition law if it occurs, as was undoubtedly the case, ‘in a way which may be regarded as having affected their outcome, at least where its position on the market is significantly affected by the measure’ (conclusions of Advocate-General Jacobs, of 21 March 1991, Extramet).

It is also a serious violation of competition law for the company to seek, through its representatives, to have measures adopted in its favour, with a view to strengthening its dominant position or excluding third parties from the market (Milan Court of Appeal, 9 to 13 July 1998 and judgment of 22 March — 16 June 2000), as was clearly the case here. Conflicts of interest are also extremely prejudicial to the organisations in which they arise.

Will the Commission explain why it has so far refrained from adopting any measures to protect the media market in Italy, which has clearly been seriously undermined by the above violations of competition law, given that the Commission's failure to act could also, in this particular case, result in it being impossible to prosecute these violations, thereby causing considerable prejudice to the Community and national markets and finances?

Answer given by Mr Monti on behalf of the Commission

(30 April 2004)

(30 April 2004)

Following a complaint, the Commission already considered the subject matter of the question and concluded that there were insufficient grounds to prolong its investigation of the case, given that there was no indication of a possible infringement of the Community law of competition.

As regards the claim that participation of the undertaking in the decision-making procedures of the law represents a violation of competition law in view of a conflict of interest, the Commission considers the following: the Community law of competition does not include any reference to the conflict of interest, therefore the Commission does not have the legal means to deal with a situation of conflict of interest in itself, independently of its effect on the market. The Commission, however, can deal with a situation of abuse of dominance or of State aid.

However, regarding dominance, the mere fact that Mediaset benefited under Law No 489 of 8 August 1994 from tax legislation which is not aimed at Mediaset only, or even at radio and television companies only, cannot be described as an abuse of a dominant position.

In addition, in the case in question, the conflict of interest is supposed to have altered competition by means of legislation granting tax relief. Distortions of competition due to advantages granted through State resources are assessed under the State aid rules of the Treaty. It is consolidated case law that article 87 ‘does not distinguish between the measures of State intervention concerned by reference to their causes or aims but defines them in relation to their effects’. What the Commission has to consider is whether a measure fulfils the Treaty definition of State aid. The elements referred to in the question of the Honourable Member do not show that this is the case and the possibility that a conflict of interest may have played a part in the drafting of such a measure cannot alter this assessment.

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