May 31, 2008 / 2:01 PM / 12 years ago

UPDATE 2-Italy court rejects Mediaset appeal to EU ruling

(Adds Mediaset CEO paragraphs 6-7)

ROME, May 31 (Reuters) - A top Italian court on Saturday rejected an appeal by broadcaster Mediaset SpA (MS.MI), owned by Prime Minister Silvio Berlusconi, against a European Union ruling that held the way frequencies were shared out was unfair.

The Council of State, Italy’s highest court on administrative matters, said the government should abide by a European Court of Justice ruling in January which strengthened a small region broadcaster’s fight against Mediaset.

The immediate impact on Mediaset, which shares a TV near-duopoly with state broadcaster RAI, was unclear. The government said it would wait until the court issued its reasoning.

Regional broadcaster Europa 7 has been in litigation for years. It claimed damages because it was not allocated TV frequencies despite winning broadcasting rights in 1999.

It says its frequencies were given unlawfully to Mediaset channel Rete 4 which did not initially have a concession but later had provisional licences formalised.

Mediaset Chairman Fedele Confalonieri said: “Europa 7 has no rights over Rete 4’s frequencies.”

“There is no shadow over the legitimacy of Rete 4’s frequencies,” he told reporters on the sidelines of a conference in Trento, northwest Italy, adding that Europa 7 could claim for damages in a legal process that would last under October.

The EU court said in January: “The exclusive allocation of radio frequencies to a limited number of incumbent operators without any time restriction ... is in breach of principles ... on freedom to provide services.”

A government official declined to say how the ruling would be implemented.

“It is all very complicated,” Industry undersecretary Paolo Romani told Reuters, saying he expected to receive the court’s reasoning on Tuesday.

“Then we will understand what has been said.”

Berlusconi’s position as Italy’s biggest media mogul has led critics to say he is unfit for office as his ownership of the TV networks conflicts with the role of prime minister.

The conservative leader has always denied a conflict of interest. Berlusconi returned to power after a landslide election win in April after about 20 months in opposition.

(Additional reporting by Valentina Za in Trento)

Reporting by Giuseppe Fonte; writing by Robin Pomeroy; editing by Christopher Johnson

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