Italy's Antitrust Authority was at the centre of a political storm on Monday after its chairman criticised a government media reform bill, suggesting it would harm the profits of opposition chief Silvio Berlusconi's TV network.
In a Sunday television interview, Authority chief Antonio Catricala' protested that the bill would introduce a 45% cap on any given broadcaster's share of the TV advertising market.
"One cannot put a cap on turnover - advertising earnings represent a company's turnover and it would decrease business growth and enthusiasm," Catricala' told a current affairs programme aired on state broadcaster Rai.
Catricala' said that Berlusconi, whose three-channel, private network Mediaset rakes in more than 65% of the money spent on TV advertising, was right to contest the ceiling.
The office of Premier Romano Prodi issued a statement on Monday saying that "it's completely false to say that the bill sets a limit on the growth of turnover of any company operating on the advertising market.
"The bill merely establishes a maximum obtainable share. Turnover can grow as much as it likes. There is no limit to that".
But Berlusconi commented that "Catricala' agrees with us. Frankly, I don't think anyone can take a company which is on the stock market and slash its profits by a third if not out of political hatred".
The Italian TV system is currently dominated by the three-channel Rai and Mediaset, which together account for some 90% of audience share and almost 96% of the advertising market, with 66.4% going to Mediaset and 28.8% to Rai. The situation has been criticised by the Constitutional Court, the Antitrust Authority, the Communications Authority and the European Commission.
The media reform bill, which was drawn up by Communications Minister Paolo Gentiloni and has just begun its passage through parliament, overhauls a law passed in 2004 when Berlusconi was in power which critics say has boosted Mediaset's position and profits.
It would force both Mediaset and Rai to move one of their three terrestial channels to digital within 15 months of its approval, with the freed-up airwaves being sold to competitors.
Besides the 45% advertising market cap it would also reduce the amount of advertising permitted per hour of programming from 18% to 16%, with in-show advertising included in the calculation.
The bill would regulate the switch to digital, setting a deadline of November 2012 for terrestrial networks to make the shift.
It would also abolish two key aspects of the 2004 media law: the privatisation of Rai and a hugely broadened definition of the national advertising market which increased its total value to some 26 billion euros.
Critics say the definition has allowed Berlusconi's group to sell as much as 2 billion euros annually in extra advertising while still respecting a 20% ceiling on any broadcaster's share of the market.
Mediaset Chairman Fedele Confalonieri said last week that the Gentiloni reform would deprive Mediaset of a third of its turnover.
"The 45% cap on the TV advertising share alone will slash profits by a quarter," he said.
But Gentiloni said on Monday that "there are dominant positions in the Italian TV system - the Constitutional Court, the Antitrust Authority and the Communications Authority have all said so. Even children know it. This creates a problem of competition but also pluralism".
"All free countries have antitrust limits in the TV sector," the minister added.
Meanwhile, the head of the Italian journalists' union FNSI, Paolo Serventi Longhi, slammed Catricala's comments as a "scandalous" interference in parliamentary business.
Other critics pointed out that before being appointed authority chief, Catricala' was the secretary general of the then-Berlusconi cabinet.
But the opposition said Catricala's stance confirmed the validity of its protests over the media reform bill. Berlusconi's Forza Italia party accused the governing coalition of "waging a vendetta" against the opposition chief.
