Mediaset Chairman Blasts Google, Facebook for 'Neo-Colonialism'

2:58 PM PST 04/30/2014 by Eric J. Lyman
Mediaset headquarters in Milan

Fedele Confalonieri said it was unfair that foreign companies paid low taxes in Italy as founder Silvio Berlusconi battled his own tax evasion problems.

ROME -- The chairman of Silvio Berlusconi’s Mediaset this week blasted big Internet companies including Google, Facebook and Amazon for business practices he said represented a kind of “neo-colonialism” in that they made money in Italy without paying taxes there.

The remarks from Mediaset chairman Fedele Confalonieri came as the company is shopping its Mediaset Premium pay TV service to foreign buyers and as Berlusconi, the company’s founder, is involved in his own tax evasion imbroglio.

Confalonieri told Mediaset shareholders that the international media giants like Google, Facebook and Amazon “generate revenue in Italy but do not pay taxes, which looks to us like a kind of neo-colonialism.” It’s a situation Italy and other countries have tried to confront in the past by establishing strict transfer pricing rules, but in his comments, Confalonieri -- who said those companies have an unfair advantage over Mediaset and other domestic competitors -- called for a global Internet tax to help level the playing field.

Mediaset’s controlling shareholder Berlusconi was convicted last year of tax fraud and false accounting in a series of deals to acquire content from U.S. film studios. Confalonieri himself was not named in the probe. Most recently, Berlusconi was in the news for failing to show up for community service he was to perform as a result of the conviction. Berlusconi called his punishment “ridiculous.”

Confalonieri’s comments also come as a Mediaset subsidiary, Mediaset Premium, is looking for foreign investors. The company said over the weekend it had attracted some interest from “various international operators for a possible partnership,” though without naming names. It is unlikely that Google, Facebook and Amazon are among those reportedly sniffing around a possible deal.

In addition to Mediaset Premium, Mediaset’s holdings include three national television networks in Italy, one in Spain, several print media and the Medusa film production and distribution house.

Twitter: @EricjLyman

comments powered by Disqus