The European Commission took a swipe at Italian Prime Minister Silvio Berlusconi's media empire on Wednesday by launching an investigation into public grants to buyers of digital decoders for terrestrial television in Italy.
The Commission said the probe aimed to discover whether aid worth more than 200 million euros ($238 million) was distorting competition, since the grants were offered for decoders using cable technology but not satellite broadcasting.
"Even if the direct beneficiaries of the grant are final consumers, the measure may constitute an indirect advantage to the current terrestrial television broadcasters and to the terrestrial network operators," the EU executive said in a statement.
"The measure seems to favour incumbent terrestrial operators."
EU Competition Commissioner Neelie Kroes said: "In this case, the subsidy seems to help free to air operators to enter the pay-TV market." While the Commission did not name the beneficiaries, Berlusconi's family controls Mediaset SpA, which is by far Italy's biggest private broadcaster.
Telecom Italia's media arm has also benefited from the subsidies and the two networks are banking on digital technology to provide a chunk of their future revenues.
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