The European Commission (EC) approved Vivendi’s plans to take de facto control of Telecom Italia on condition the Italian operator divests its stake in media distribution firm Persidera.

In a statement, the EC explained the condition was based on Vivendi’s “significant minority stake” of 28.8 per cent in broadcaster Mediaset, which could cause a conflict when coupled with Telecom’s Italia’s Persidera holding.

“The commission found that, post transaction, Vivendi would have had an incentive to raise prices charged to TV channels in the market for wholesale access to digital terrestrial networks, where Persidera and Mediaset each hold a significant share.”

Vivendi, which is Telecom Italia’s largest single shareholder with a 24 per cent, first said it wanted to take de facto control of the Italian operator in April.

However, concerns were raised given the sizeable stakes it owns in Telecom Italia and Mediaset, which do not comply with the country’s media ownership rules.

The French group then tightened its grip on Telecom Italia after successfully appointing two thirds of the company’s board in a shareholder meeting held on 4 May.

Reuters previously reported Vivendi had offered to sell Telecom Italia’s stake in Persidera to ease competition concerns and smooth the way for EU approval. Telecom Italia owns 70 per cent of the company.

As part of its probe, the commission also investigated the relationship between Vivendi’s activities in Italy in advertising, music, TV and mobile gaming, and Telecom Italia’s fixed and mobile services.

“In this respect, the commission concluded that Vivendi would not have the ability or incentive to shut down other competitors from the relevant markets,” the EC stated.

Despite receiving a green light from the EC, Vivendi still faces scrutiny from Italian communications regulator Agcom, which is conducting a review.

In April, Agcom ordered Vivendi to cut one or both of its holdings in the Italian companies, with a mid-June deadline set for Vivendi to detail its strategy.