Argentina launches process to break up media group

Associated Press
** CORRECTS SPELLING OF SECOND REFERENCE TO SABBATELLA INSTEAD OF SABATELLA **  Martin Sabbatella, center, head of the government media regulation body, Federal Authority on Audiovisual Communication Services (AFSCA) and Sergio Surano, right, director of the AFSCA legal department, listen as Grupo Clarin's lawyer Damian Cassino, left, speaks during a meeting, in Buenos Aires, Argentina, Monday, Dec. 17, 2012. Sabbatella said Monday that the government will make the conglomerate and other companies comply with the law, which bars any company from owning too many different media properties. The law could require Grupo Clarin to sell off broadcast licenses as well as its majority stake in Cablevision, the cable TV network that has become the company's cash cow. (AP Photo/Daniel Dabove,Telam)
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BUENOS AIRES, Argentina (AP) — Argentina's government told the country's largest media conglomerate on Monday that it has begun a process to break up the company and auction off its media licenses.

Grupo Clarin has battled with President Cristina Fernandez for years. Fernandez argues that it is a corporate monopoly and has funded a network of pro-government newspapers and stations to challenge Clarin's dominance.

Grupo Clarin has called Fernandez's bid to break it up an illegal attempt to silence one of the government's leading critics and to stifle press freedom.

Martin Sabbatella, the head of the government media regulation body, said on Monday that the government will make the conglomerate and other companies comply with the law, which bars any company from owning too many different media properties.

It comes after a lower court judge ruled Friday that a three-year-old law against media monopolies is constitutional.

"We notified them of the start of the transfer of licenses because the law is constitutional," Sabbatella said at an impromptu press conference outside of Grupo Clarin's headquarters in Buenos Aires.

The process, which will end up with transfer of licenses, will last about 100 days. During this time, the media empire must take care of all its current holdings and keep all jobs, Sabbatella said.

Grupo Clarin said in an emailed statement that the government's action tramples on past rulings that favored the media group.

"It's totally inadmissible and illegal because it openly violates several legal rulings," Clarin said.

Clarin has said the judge's declaration lifting all injunctions in the case violates court procedures. The media group says a higher court had stayed the divestment requirement until the justice system rules definitively on challenges to the law.

The 2009 law was tweaked in Congress to specifically target Clarin, the only company that runs afoul of all its major anti-monopoly clauses. The law could require Clarin to sell off broadcast licenses as well as its majority stake in Cablevision, the cable TV network that has become the company's cash cow.

Clarin says the government cannot take away its licenses because the group lodged an appeal to Friday's ruling before Sabbatella's visit on Monday. A lower court has three days to look at it, and if it is rejected, Clarin can go before an appeals court.

Graciela Romer, a political analyst in Buenos Aires, said the case could eventually go before the Supreme Court and take anywhere from months to years.

"The government says it's in compliance to demand disinvestment and not wait for the deadlines set by the law. That's the point. The government feels like it loses ground if it leaves any room, which leads me to think that this will eventually end up in the Supreme Court," Romer said.

"But this could take from two months to two years and the government needs to resolve this without leaving any breathing room that can get in the way of achieving this historic triumph for freedom of speech, which is how the state has branded its fight with Clarin."

Gregorio Badeni, a constitutional lawyer, agreed that the case could land before the Supreme Court.

"The government cannot force Clarin to disinvest at this moment because the judge's ruling ... has been appealed," Badeni said.

The government says Clarin has 237 licenses but must abide by the law, which allows companies to only have 24 cable licenses and 10 free-to-air licenses for radio and TV, and to cover no more than 35 percent of the pay-per-view population.

Clarin says it has seven radio licenses and four open-TV ones. It also says its TV cable operator Cablevision owns 158 local licenses and that the law's 24 would limit their market.

The media group has been at odds with the government since it criticized Fernandez's handling of a tax on the key agricultural industry and a massive farmers strike in 2008.

Since then, critics of Fernandez's government say she's been out to break up the media empire. The government has sent tax agents to raid the offices of Argentina's biggest-circulation daily and suggested that the owner of Clarin could have adopted her children from babies stolen during the military regime.

It has also tried to gain control of Argentina's only newsprint maker and encouraged the national soccer association to break its contract with a cable TV channel owned by Clarin.

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Associated Press Writer Luis Andres Henao in Santiago, Chile and Jessica Weiss in Buenos Aires contributed to this report.

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