Officials of Vivendi confirmed Tuesday that they are considering legal action against an order, handed down by Italian telecommunications regulator Agcom, that requires the French media conglomerate to reduce its stake holdings in Telecom Italia (TI) or in national broadcaster Mediaset. Vivendi currently ranks as the single largest TI shareholder with a 24% stake. Although Vivendi withdrew last year from a $860 million deal to acquire Mediaset’s pay TV unit (an action which is now the subject of a pending lawsuit), Vivendi recently pursued a series of minority share purchases in Mediaset that have enabled Vivendi to build a stake of nearly 29% in the broadcaster with corresponding voting rights.

Spurred by a complaint filed by Mediaset, Agcom launched an investigation last December through which it ultimately concluded that Vivendi’s Italian shareholdings provide Vivendi with significant influence over TI and Mediaset in violation of Italian antitrust law. Agcom also declared that the current relationship among Vivendi, TI and Mediaset could produce a negative effect “on the existing level of competition in the markets involved and on the degree of pluralism” in the Italian media sector. As such, Agcom notified Vivendi that it would have one year in which to reduce its stake in either TI or Mediaset to avoid liability for fines of between two and five percent of Vivendi’s annual revenues. While the directive did not specify the amount of TI or Mediaset shares that Vivendi would be required to divest, Agcom told Vivendi that it would have to submit a “specific plan of action” within 60 days.

While voicing surprise at the ruling, a Vivendi spokesman countered that his company “has always operated within the Italian law, and specifically . . . [antitrust] law regarding the protection of media pluralism.” Stressing that Vivendi “neither controls nor exercises a dominant influence on Mediaset,” the spokesman declared that Vivendi “reserves the right to take any appropriate legal action to preserve its interests.”