Italian government uses ‘golden power’ to challenge Vivendi control of TIM

It looks like the Italian government has decided Vivendi is being too cheeky in its attempts to control operator TIM without going to the trouble of buying it.

The PM is taking the unprecedented step of using a so-called ‘golden power’ (which it’s important to spell correctly), to exercise influence over the strategic decisions made by TIM. This move appears to be a direct response to concerns that Vivendi is managing to control TIM despite owning less than a quarter of its shares.

The apparent legal justification for the move seems to be concern about national communications infrastructure, including the Sparkle and Telsy subsidiaries, falling into extra-national hands. Acknowledging receipt of the notification from the government, TIM made the following statements:

“The Presidency of the Council of Ministers requires TIM, Sparkle and Telsy to issue responsibility for the functions relating to company activities deemed significant for national security to a member of the Board of Directors of each of the aforementioned companies who is an Italian citizen, who has Security Clearance, and is approved by the Government for the role. The powers must include responsibility for a special organizational unit (Security Organization) in charge of relevant activities.

“The aforementioned organizational unit, which is to be involved in governance processes and in particular in all decision-making processes pertaining to strategic activities and the network, must be entrusted to a security official chosen from a shortlist of three names proposed by the Department of Information Security of the Presidency of the Council of Ministers.

“Each of the companies mentioned above must provide prior information on every and all decisions that may reduce or transfer technological, operating, and industrial capacity in the strategic activities.

“The Company is examining the measure and has a 90-day term to comply with the various requirements. Thereafter, on a half-yearly basis, it will be required to transmit a report stating the measures it has adopted in order to comply with the various requirements.”

Vivendi isn’t explicitly named in any of this and hadn’t offered any public comment at time of writing, but it’s hard to imagine any other reason for the Italian government taking such an exceptional step. As Huawei has found in the US, governments take any prospect of foreign interference in their telecoms networks seriously and Vivendi will need to consider its next step very carefully.

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