The Italian Council of Ministers recently submitted proposed legislation to the Senate which would regulate competition and plurality of ideas in the Italian media. These matters are addressed in Article 2 of the proposed law, the first Article of which establishes a Communications Authority to regulate such matters, among other things (see separate entry of this date in Business Monitor for a discussion of the Authority).

The area of "media" to which the regulations apply includes: radio, television, all other newer forms of communications and multimedia, and the press, including in electronic forms. The proposed law seeks to protect the freedom and plurality of expression guaranteed by Article 21 of the Italian Constitution. It prohibits (i) acts, (ii) behavior, (iii) agreements, and (iv) mergers leading to the creation of a dominant position in the media that, by impeding (i) liberty of thought, (ii) free formation of opinion, (iii) diversity of information available, (iv) free access to information, or (v) the development of an efficient and competitive national system of information substantially eliminate or reduce plurality and competition in the market.

Previously, the Law of August 6, 1990, no. 223, Article 15(4) attempted such regulation by fixing a maximum number of networks that could be granted to a single broadcaster, but the Italian Supreme Court struck down this limit in December of 1994, leaving in place temporary legislation and giving the Government until August of 1996 to correct the matter. The proposed legislation, with some urgency, attempts to meet this deadline.

Under the new rules, a single communications group could not hold national broadcasting licenses for more than 20% of the programs scheduled on the annual list which the Authority will prepare. A further limit is placed on the percentage of the Italian market's media revenue for which a single communications group could account. The sources listed for such revenue are: financing for public services, net of taxes, advertising, tele-sales, sponsorships, and contracts with public entities. The limits are set at 30% for television broadcasting, radio, and cable or satellite television groups, at 25% for television broadcasting groups that derive more than 20% of their gross revenue from "pay TV", and at 20% of the combined broadcasting and printed media sectors for groups that participate in both sectors.

The Authority would review for evidence of market dominance at the time licences are renewed, or when it becomes aware of an alleged violation in some other way. The proposed legislation requires the Authority to establish an investigation procedure including notice to the parties and a hearing with opportunity to provide evidence. The Authority would be able to prohibit transactions, order their undoing, or require that companies reduce the size of their operations. These duties would be performed in coordination with the Italian Antitrust Authority.

As discussed in another entry on this data base, the Minister of Post and Telecommunications, Mr. Antonio Maccanico, has stated that if Parliament fails to pass the legislation, the Government may itself issue it in the form of a temporary decree. This is partially the result of the need for compliance with the Supreme Court decision discussed above. Given this urgency, the competition and plurality rules discussed herein could well enter into force, on a precarious, renewable sixty day basis, in August.

The content of this article is intended to provide general information on the subject matter. It does not substitute the advice of legal counsel.