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Italian law capping Vivendi's Mediaset stake breaches EU law, court adviser says

An Italian law that prohibits Vivendi SA from holding a 28.8% stake in Mediaset SpA is contrary to European Union rules, an adviser to the bloc's top court said.

Advocate General Manuel Campos Sánchez-Bordona told the Court of Justice of the European Union that the law limited the "freedom of establishment," or the right of companies from other EU member states to enter Italy's media sector. He added that such a law must be in line with the need to protect the variety of information sources.

The statement came in response to a case filed by Vivendi against Italian telecom regulator Autorità per le Garanzie nelle Comunicazioni, which ruled against the former's stake-building in Mediaset in 2016. The French media group also holds a 24.68% stake in Telecom Italia SpA, which has a 44.7% share of Italy's telecom market.

Existing Italian laws prohibit electronic communications companies with a market share of 40% and above to hold a stake of more than 10% in big TV, radio and publishing entities. In response, Vivendi agreed to transfer its holding in Mediaset beyond the threshold to a blind trust.

Vivendi recently filed lawsuits against Mediaset's plan to create a pan-European holding company for its Italian and Spanish operations as well as its stake in Germany's ProSiebenSat.1 Media SE. The two companies failed to reach an out-of-court settlement.