WRITTEN QUESTION E-1628/99

by Antonio Tajani (PPE-DE), Francesco Fiori (PPE-DE), Giuseppe Gargani (PPE-DE), Stefano Zappalà (PPE-DE), Raffaele Fitto (PPE-DE), Guido Viceconte (PPE-DE) and Guido Podestà (PPE-DE) to the Commission

(15 September 1999)

Subject: Canal Plus-ENEL agreement: entry of the largest public electricity group into the world of digital television

In the context of the Canal Plus-ENEL agreement, ENEL, the Italian electricity board, has subscribed to a 30 % share in Telepiù, involving a disbursement of some 900 billion lire. At the same time, ENEL has increased its charges so that each family now has to pay over a million lire more per year.

What is the Commission's view of the entry of the largest public electricity group into the world of digital television?

Can the Commission ascertain the grounds for such a decision, the criteria adopted and the reasons for not investing capital in other economic sectors?

Does it consider it acceptable for a state-owned enterprise to invest public capital in a venture whose prospects and financial situation are still uncertain, creating an image and awareness among the European public that public funds are being appropriated for an investment that is risky to say the least?

Does it believe that the simultaneous increase in electricity charges to offset expenditure that is totally unrelated to the energy sector is justifiable?

Can the Commission check whether similar cases have arisen in other EU Member States?

Lastly, can the Commission assess whether the Canal Plus-ENEL affair can be considered from a market viewpoint or whether it impedes free competition? Can it also ascertain whether there are limits to the financial activity of a state-owned enterprise in a free market, especially alongside another state-owned enterprise, RAI TV?

Answer given by Mr Monti on behalf of the Commission

(18 October 1999)

The Commission, under Article 295 (ex-Article 222) of the EC Treaty, is not competent to assess the choices of a Member State regarding the ownership of undertakings. Therefore, it is not competent to assess the industrial logic of the investment decisions adopted by public or private companies, nor possible diversification strategies chosen by them.

Under state aid rules, no state aid can be detected when investments are made in circumstances that would be acceptable for a private investor operating under normal market economy conditions, i.e. when the expected return on the investment is comparable with the one a private investor operating in market economy would have required, taking into account the risk of the investment itself. The Commission has requested the Italian authorities to provide preliminary information on ENEL's acquisition of Telepiù, in order to assess the possible presence of State aid.

In particular, the Commission will ensure that ENEL's investment in Telepiù does not benefit from cross-subsidies deriving from the reserved activities of ENEL in the electricity business.

As to the possibility that similar situations exist in other Member States, the Commission recalls what it said above about Article 295 of the EC Treaty. In so far as competition rules are not infringed, Member States and public undertakings have full competence to make investments in economic activities.