Vivendi has been hoarding stakes in both Telecom Italia and Mediaset and the Italian communication authority – Agcom – has said it’s got to pick one or the other.

Agcom has been investigating Vivendi’s increasing stakes in the two Italian media/telecoms companies. It currently owns 24.9% of TIM (the artist formerly known as Telecom Italia), which is the maximum it’s allowed before being compelled to make a formal acquisition bid. It owns even more of Mediaset, but isn’t subject to the same restrictions as the Silvio Berlusconi remains the majority shareholder via his company Fininvest.

It has long been clear that Vivendi’s strategy towards TIM has been to exercise as much control over it as it can without actually owning it. Another feature of that strategy has been regular attempts to populate the non-executive board with allies and even its own execs.

While Vivendi doesn’t seem to have broken any rules in accumulating strong positions within each company, the combination of the two seems to be in conflict with the ‘Gasparri Law’, brought into effect in 2005. The law seems designed to protect media plurality and came about while Berlusconi was Italian Prime Minister, presumably to provide reassurance against his own corporate ambitions.

The Agcom announcement, as far as we can tell from Google Translate, essentially orders Vivendi to significantly reduce its position in one of the companies within a year and to set out its plans for doing so within two months.

Vivendi is predictably displeased with this ruling, issuing the following statement: “Vivendi has always operated within Italian law, and specifically the Gasparri Law regarding the protection of media pluralism from the creation of dominant positions. In particular, it is undisputable that Vivendi neither controls nor exercises a dominant influence on Mediaset which is controlled on an exclusive basis by Fininvest with a stake close to 40%.

“Vivendi reserves the right to take any appropriate legal action to protect its interests, including filing an appeal to the AGCom decision at the Regional Administrative Court (TAR) and to submit a formal complaint to the European Commission for the breach of EU law. Vivendi continues to be fully confident in the rule of law and is certain that finally its rights will be recognized.”

If Agcom has failed to comply with European law there’s a good chance Vivendi’s appeal will eventually succeed, but that’s likely to take a while and it’s not clear whether any appeal will also suspend the terms of the ruling. Either way it looks like Vivendi’s Italian ambitions may be on hold for a while.