News Corp. sues Berlusconi firms

Lawsuits charge that the companies distorted competition

ROME -- The long-simmering feud between media tycoons Silvio Berlusconi and Rupert Murdoch finally boiled over when Murdoch's News Corp. filed suit against two Berlusconi firms and News Corp's Sky Italia unit appears to be set to battle against Berlusconi's Mediaset in the digital television sector.

The heated up battle is the latest in a series of difficult personal developments for Berlusconi, Italy's prime minister, who is going through a divorce and who is swamped with scandals related to prostitution and alleged sexual relations with minors.

The suits from Murdoch, filed over the weekend, are against Publitalia and RTI, the advertising arm and television operations arm, respectively, of Berlusconi's vast media empire. The suits charge that the companies distorted competition in the television sector by refusing advertising from Sky Italia.

Meanwhile, Monday's editions of Corriere della Sera report that Murdoch is looking to acquire Rete A, the digital network owned by Gruppo Espresso in a deal that could involve long-time Murdoch ally Tarak Ben Ammar, the Franco-Algerian media mogul. The deal would pit Sky Italia against Mediaset in the fast-developing digital television sector -- a sector Mediaset has said it wants to focus on.

Sky already dominates satellite television in Italy, while Mediaset is the country's leading private terrestrial broadcaster. But the digital television sector is still in play, and is likely to become more important as both Mediaset and state broadcaster RAI are required to migrate their networks to that platform by 2012.