Italian law limiting Vivendi's Mediaset stake breaches EU law - adviser

BRUSSELS, Dec 18 (Reuters) - An Italian law that prevents French media firm Vivendi holding nearly a third of shares in Italy’s Mediaset breaches European Union law, an adviser to the bloc’s highest court said on Wednesday.

The advice to judges at the Court of Justice of the European Union (CJEU) is part of a three-year legal battle sparked by Vivendi’s move to raise its stake in Mediaset to 29% in 2016. Mediaset considered the move hostile.

The court’s judges, who are not obliged to follow the advocate general’s opinions but usually do, would normally rule in two to four months after such an opinion is given.

Mediaset complained to the Italian telecoms watchdog AGCom in 2016, saying Vivendi had violated Italian rules to protect plurality in Italy’s media industry by buying such a big stake.

AGCom ruled in 2017 that the move was against Italian law. In response, Vivendi transferred 19.19% of its Mediaset shares to an independent company but it also challenged the decision.

Manuel Campos Sanchez-Bordona, advocate general to the EU court, said national legislation could prevent ownership being too concentrated but said such laws must be proportionate.

He said an Italian court would decide if the law was proportionate but said the legislation had defined the communications sector too restrictively, setting a very low ceiling for revenues controlled by one company.

He also said Vivendi was not in a position to exert considerable influence on Mediaset.

Vivendi and Mediaset have been at odds since the French conglomerate pulled out of an 800 million euro ($882 million) agreement in 2016 to buy Mediaset’s loss-making pay-TV unit.

Vivendi has also challenged Mediaset’s plans to merge its domestic and Spanish business to become a pan-European company.

$1 = 0.9073 euros Reporting by Jonas Ekblom; Editing by Philip Blenkinsop and Edmund Blair