CJEU: The Italian subsidy for DTT receivers constitutes State aid

posted on 17 August, 2011   (public)

The Court of Justice of the European Union, by its judgment dated 28 July 2011, confirmed that the Italian subsidies for the purchase of digital terrestrial decoders in 2004 and 2005 constitute State aid which is incompatible with the common market.

Specifically, by its Finance Law in 2004 and 2005, Italy granted a public subsidy to consumers who purchased or rented digital terrestrial equipment, excluding, though, those who chose digital satellite equipment. Following complaints of those whose interests were affected, the European Commission adopted a decision according to which, the subsidies in question constituted State aid, for the purposes of Article 87(1) EC, in favour of digital terrestrial broadcasters. For that reason, the Commission ordered recovery of the aid.

By application lodged at the Registry of the General Court on 23 May 2007, Mediaset, a digital terrestrial programmes broadcaster, brought an action seeking annulment of the abovementioned decision of the Commission. However, the General Court dismissed that action and confirmed that the subsidy constituted an economic advantage for terrestrial broadcasters. Mediaset appealed to the Court of Justice, who also endorsed the reasoning of the General Court.

Indeed, the Court stated that the subsidy at issue constituted an economic advantage in favour of terrestrial broadcasters since it permitted them to build up an audience and caused, therefore, a distortion of competition. Furthermore, the measure was neither proportionate nor neutral. The digitisation of television signals, according to the Court, is not a circumstance that could justify the exclusion of the satellite platform from the scope of the measure at issue, which represents unjustified technological discrimination

Source: Court of Justice of the European Union, Case C-403/10 P.