The Regional Administrative Court of Lazio on transparency obligations regarding ownership structures of a newspaper publishing company

With its decision of July 8, 2020 the Regional Administrative Court of Lazio (“TAR Lazio”) rejected an appeal filed against a resolution adopted by the Italian Communications Authority (respectively the “AGCOM Resolution” and “AGCOM”) concerning transparency obligations regarding the ownership structures of a newspaper publishing company.

In particular, amongst others, the Court was called to decide whether certain newspapers publishing companies were subject to the dominant influence of a third party and, hence, if the relevant transparency obligations applied.

Pursuant to Italian law (Article 1, paragraph 8, of Law No. 416 of August 5, 1981), any natural or legal person effectively controlling a newspaper publishing company, including indirectly or through fiduciary entrustment, has the obligation to communicate such control to the Register of Communication Operators kept by the AGCOM.

The abovementioned transparency obligation is aimed at keeping information disseminated by the press true, objective, and impartial. Indeed, there is a risk that newspaper publishing companies with financial difficulties may be financed by entities willing to use them to exploit information in support of their own economic or political interests. In order to promote the independence of newspapers, Italian law introduced a system of public monetary aid to publishing companies, together with the transparency obligations described above; those obligations serve primarily to allow public control over the validity of sources of information and, secondarily, to prevent cases of abnormal concentration of editorial power.

The provisions of law addressing the issue at stake provide a definition of control by:

  1. referring, in general, to Article 2359 of the Italian Civil Code (which sets forth the statutory notion of control and that dominant influence is a form of control); and
  2. specifying that dominant influence is deemed to exist, unless proven otherwise, in the presence of certain financial or organizational relationships, i.e. (i) communication of profits and losses; (ii) the coordination of the management of the publishing company with that of other companies in order to pursue a common goal or to limit competition between the companies themselves; (iii) a different distribution of profits or losses, as regards the subjects or the size, from what would have occurred in the absence of the relationships themselves; (iv) the attribution of powers greater than those deriving from the number of shares or quotas held; and (v) the attribution of powers to persons other than those legitimized on the basis of the ownership structure in the choice of the directors and managers of the publishing companies as well as the directors of the newspapers edited.

Having described the applicable legal framework, the dispute in question hinged on whether the defendant actually held control or could exercise a dominant influence over certain newspaper publishing companies and, thus, whether or not the communication obligations would apply. In particular, the decision is interesting due to the reasoning put forth by the TAR Lazio on (i) the elements that should be taken into consideration to determine whether a dominant influence exists and, furthermore, (ii) the relationship between the notion of control under Article 2359 of the Italian Civil Code and the notion of dominant influence in the editorial sector.

According to the TAR Lazio, not only can dominant influence be triggered by contractual relationships, such as corporate control or purchase of capital goods that place a company in a position of clear economic dependence, but dominant influence may also be construed by examining a series of elements that, given their frequency, become systematic, organic, and stable over time. As provided by law and mentioned above, these elements may also have an economic and organizational nature. In the case at hand, the elements found by the TAR are the broad powers of delegation and decides autonomously how monetary funds are allocated, and another could be that the advertising spaces in the newspaper are sold to the alleged controller with the ultimate aim of disseminating a specific political message.

Indeed, according to the TAR Lazio, generally speaking the phenomenon of control is identified and qualified in different ways in various sectors and, therefore, coming up with a single fixed notion of such concept is not possible.

This is particularly true in the editorial sector, where, as mentioned above, there are specific public interests as to transparency of ownership structures and specific parameters to determine whether a dominant influence exists are provided by law.

In the case at hand, the TAR Lazio concluded that while each element collected during the investigation per se does not lead to the conclusion of the presence of control, the elements in the aggregate confirm the existence of a position of de facto control exercised by the alleged controller over the newspaper publishing companies.

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