TV DECODER SUBSIDIES: NO CONFLICT OF INTEREST ON THE PRIME MINISTER'S PART
PRESS RELEASE
PRESS RELEASE
CONFLICT OF INTEREST: ANTITRUST FINDS PRIME MINISTER'S PROVISION OF SUBSIDIES FOR TV DECODERS WAS NOT UNLAWFUL AND MEDIASET, RTI AND SOLARI.COM ARE NOT SUBJECT TO PENALTY
The Italian Competition Authority, at its meeting on 10 May 2006, decided that the Prime Minister did not contravene Article 3 of the law on conflicts of interest by way of the regulation on State contributions for the purchase of television decoders which was included in the 2006 Budget.
This proceeding was begun on 22 December 2005 on the basis of a complaint lodged by a number of members of parliament which also included the companies Mediaset, RTI and Solari.com.
During the course of the investigation, the Authority had to evaluate whether the granting of these subsidies, based on a specific government action for which the Prime Minister was directly responsible, was such as to constitute a particular benefit to the above companies operating in the pay-TV and digital decoder markets, to the detriment of the public interest.
The total subsidy of 10 million euros foreseen in the 2006 Budget which was the subject of these proceedings, is at present limited to just two of the peninsula's Regions and applies only to open decoders (API): any financial impact on pay-TV operators would probably be of minor importance. This analysis is further confirmed by the difficulty in establishing an automatic link between the potential increase in the number of decoders resulting from the public subsidy in the 2006 Budget and the possible increase in users of pay-TV, since at least a proportion of the new owners of decoders could use the equipment just for the free viewing, using digital technology, of unencrypted television programs. It should also be remembered that the satellite operator Sky chose to use a broadcasting standard which is not one of the open ones which can benefit from these State subsidies.
Even if one were to assume a perfect correspondence between the increase in the number of publicly subsidized decoders and the increase in users of pay-TV services, a specific preferential benefit to the companies owned by the Prime Minister is hard to establish given the present structure of the market and the overwhelming share (over 90%) held by the main operator (Sky) compared with the other companies, including Mediaset and RTI, which could potentially benefit from the effects of State incentives.
As regards Solari.com, a company having operations in the decoder sector and controlled by a member of the Prime Minister's family, considering its market share is under 5%, the Authority decided that the public subsidy could not have provided a specific, preferential benefit for that company.
Based on the above considerations, then, the following conclusions were drawn:
a) the legislative provision regarding subsidies for the purchase of decoders was the responsibility of the Prime Minister, since the maxi-amendment to the 2006 Budget was the subject of a confidence vote decided on by the Council of Ministers on 14 December 2005. Given the importance of the confidence vote for the Government, the Prime Minister's absence at the time of the decision does not lessen his responsibility in the matter;
b) a charge of conflict of interest under Article 3 of law no. 215/04 over the adoption of provisions in the 2006 Budget offering State subsidies for the purchase of digital decoders cannot be levelled against the Prime Minister, given the lack of a specific, preferential financial benefit and the absence of damage to the public interest;
c) consequently there was no violation of Article 6, Paragraph 8 of law no. 215/04 by companies owned by the Prime Minister or his immediate family.
Rome, 11 May 2006