News Corp. Italy Unit Claims Mediaset Bias by Telecom Agency

Rupert Murdoch’s News Corp. (NWSA) has turned to the Italian courts in its fight against Mediaset SpA (MS), suing a regulator for allegedly favoring former Prime Minister Silvio Berlusconi’s media company.

News Corp.’s local pay-television unit Sky Italia Srl filed a complaint against the Rome-based telecommunications authority known as Agcom, a Sky spokesman said yesterday, asking not to be named citing company policy.

Sky is seeking about 100 million euros ($130 million) from Agcom for thwarting its efforts in the advertising market with rules that, since 2011, have benefited Mediaset, according to two people familiar with the lawsuit who asked not to be identified because of the ongoing litigation. Mediaset isn’t named as a defendant, the people said.

The civil complaint, filed to the regional court in Lazio, claims Agcom’s old board led by former President Corrado Calabro distorted the advertising market when it lifted a rule in 2011 requiring Berlusconi’s company to separate its ad sales for digital and analog TV channels as a way to block packaged offers, according to the people.

Agcom and Mediaset spokesmen declined to comment. The Sky Italia spokesman declined to discuss details of the lawsuit.

Photographer: Giuseppe Cacace/AFP via Getty Images

The Sky Italia headquarters stand in Milan. Close

The Sky Italia headquarters stand in Milan.

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Photographer: Giuseppe Cacace/AFP via Getty Images

The Sky Italia headquarters stand in Milan.

‘Relatively Minor’

“A 100 million-euro request seems to suggest News Corp. Italy Unit thinks it could have got one more percentage point of the advertising market under different rules,” said Sarah Simon, an analyst at Berenberg Bank. “This is relatively minor if you put this in the context of Mediaset’s nearly 60 percent share of the market.”

Mediaset’s share of the Italian TV-ad market reached 62 percent in 2012, worth 2.4 billion euros, according to researcher Nielsen. Sky Italia controlled about 80 percent of the smaller pay-TV segment last year. Its share was worth 344 million euros.

In 2006, Mediaset formed Digitalia ’08 Srl to sell ads for new digital channels, to work alongside its historical ad-sales company, Publitalia ’80 SpA. Five years later, with the switch-over from analog to digital TV, Mediaset returned to relying on Publitalia as its main advertising contractor.

Today Mediaset uses separate ad agencies, focusing ads on free channels through Publitalia, and using Digitalia to sell ads for the Milan-based company’s pay-TV unit Premium.

Mediaset shares gained 7.8 percent to 2.82 euros at the close of trading in Milan. The company has a market value of 3.3 billion euros. In New York, News Corp. rose 2.4 percent to $32.92 at 2:37 p.m. for a market value of $76.3 billion.

To contact the reporter on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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