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EU says RAI, Mediaset must repay 2004, 2005 decoder subsidies

European Union regulators said Italy's RAI state television network and private broadcaster Mediaset SpA must repay €200 million ($260 million) in subsidies for the purchase of digital broadcast decoders given in 2004 and 2005.

The subsidies were for individuals who purchased digital terrestrial decoders, while satellite technology was excluded. News Corp.'s Sky Italia SpA is Italy's main satellite TV provider. „The commission is not ready to accept state support that creates unnecessary distortions of competition between transmission platforms,” Competition Commissioner Neelie Kroes said in an e-mailed statement today. The government of former Prime Minister Silvio Berlusconi, who owns Mediaset, originally introduced the grants. Mediaset and RAI together command about 90% of the prime-time TV viewing audience, and more than 90% of advertising revenue. EU regulators began an investigation into the subsidies on December 21, 2005. The commission said subsidies for technology that doesn't favor one platform over another are compatible under state-aid rules, including grants given out in 2006. (Bloomberg)