CJEU on Italian subsidies for the purchase of digital terrestrial decoders

The Court confirms that the Italian subsidies for the purchase of digital terrestrial decoders in 2004 and 2005 constitute State aid which is incompatible with the common market The broadcasters which benefited indirectly from that State aid are obliged to repay amounts corresponding to the advantage obtained thereby
Under the process of digitisation of television signals commenced in Italy in 2001, digitisation was to have been accomplished and transmission in analogue mode to have ceased definitively by December 2006. The deadline for the cessation of analogue transmission was postponed, on two occasions, until 30 November 2012.
By its 2004 Finance Law, Italy granted a public subsidy of €150 to every user of the broadcasting service who purchased or rented equipment for the reception, free-to-air, of television signals transmitted using digital terrestrial technology (T-DVB/C-DVB). The subsidy ceiling was set at €110 million. While the 2005 Finance Law continued that measure within the same spending limit of €110 million, the subsidy for each digital decoder was reduced to €70.
In order to benefit from the subsidy it was necessary to purchase or rent digital terrestrial TV equipment. Consequently, a consumer who chose digital satellite equipment could not receive the subsidy.
The television companies Centro Europa 7 Srl and Sky Italia filed complaints in respect of those subsidies with the Commission. By a decision adopted in 20071, the Commission effectively held that the subsidies in question constituted State aid in favour of digital terrestrial broadcasters offering pay-TV services and cable pay-TV operators. While stating that the transition from analogue to digital television broadcasting was a common interest objective, the Commission held that the subsidy was not proportionate to the pursuit of that objective and gave rise to distortions of competition. The measure was therefore not ‘technologically neutral’, as it did not apply to digital satellite decoders2. For that reason, the Commission ordered recovery of the aid. Here to read more.