(MENAFN - AFP) Italy's markets watchdog said Wednesday that French media group Vivendi had "de facto control" over Telecom Italia but the Italian operator said it would contest the decision.
Vivendi's role in Italy's telecommunications sector has come under growing scrutiny since the company built up a stake of 23.94 percent in Telecom Italia and took 28.8 percent of the country's biggest commercial broadcaster, Mediaset.
If Vivendi is found guilty of failing to have notified the Italian authorities of its control of Telecom Italia, it risks a minimum fine of 300 million euros ($356 million).
"After a thorough analysis of the current laws and the facts on the ground, (markets watchdog) Consob has concluded that Vivendi's stake in Tim qualifies as de facto control," a statement said.
Vivendi, the biggest shareholder in Telecom Italia (Tim), has consistently denied controlling the company, saying that it only exercises "management and coordination activities" since July.
Telecom Italia said it "will take all legal action to defend its interests and is confident that its actions have been correct and its arguments solid."
Vivendi meanwhile said it "formally contests that interpretation and will appeal to the competent courts," adding that the group "has always complied with applicable laws and regulation."
The Italian government is looking into whether Vivendi breached an obligation to notify Rome of its controlling role at Telecom Italia, a company considered a strategic national asset.
"In strategic sectors, companies have an obligation to communicate," an official source said.
On April 18, Italy's telecoms watchdog Agcom gave Vivendi one year to reduce its stake either in Mediaset or Telecom Italia and Vivendi had 60 days to present its plan of action.
Vivendi will transfer 19.19 stake of Mediaset to an "independent subsidiary" and will not be authorised to sell its stake in Mediaset to Telecom Italia, according to Vivendi's plan published Wednesday by Agcom.