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UPDATE 2-Italy EconMin spoke to Vivendi CEO over media law, Mediaset tussle - source

* Vivendi says draft law would breach EU principles

* French group at loggerheads with Italy’s Mediaset

* EconMin favours a deal between Vivendi and Mediaset

* Italy is preparing broader media reform (Adds details and background)

ROME, Nov 20 (Reuters) - Italy’s economy minister Roberto Gualtieri spoke with the head of Vivendi by telephone on Monday to discuss the French media group’s concerns about a draft bill potentially curbing its activities in Italy, a source close to the matter said.

Gualtieri also told Arnaud de Puyfontaine he hoped a solution could be found to a long-standing dispute between Vivendi and Italy’s top commercial broadcaster Mediaset, the source added, asking not to be named.

Vivendi holds 29% of Mediaset, which is controlled by the family of former Italian Prime Minister Silvio Berlusconi, and a 24% stake in Italy’s former phone monopoly Telecom Italia.

The talks come as Berlusconi is offering an olive branch to Gualtieri and Prime Minister Giuseppe Conte, saying his opposition Forza Italia party could vote in favour of Rome’s new measures to cushion the impact of the coronavirus crisis.

Rome has drafted legislation, under discussion in parliament, that would require Italy’s communications watchdog to investigate for up to six months companies operating directly or through other entities in the country’s telecom and media sectors.

The source said Gualtieri had told de Puyfontaine the draft legislation was a temporary measure ahead of new media regulation. The call was “friendly and constructive”, he added.

Vivendi and Mediaset declined to comment.

The French media company told Italy last week it was ready to lodge a formal complaint with the European Commission over the bill, a letter seen by Reuters showed.

Gualtieri said in a television interview on Friday he had asked for clarification following the letter, without giving further details.

The draft bill comes after the European Union’s top court ruled in September that an Italian law setting market share thresholds to prevent excessive power concentration in the telecom and media sectors was against EU rules.

That ruling strengthened Vivendi’s hand in its dispute with Mediaset, but the draft bill, if approved, would buy the Italian group time until a broader reform is in place.

The two companies have resumed discussions since the EU court verdict but have so far failed to reach a compromise, several sources familiar with the matter said. (Reporting by Giuseppe Fonte; Additional reporting by Elvira Pollina; Editing by Giselda Vagnoni, Stephen Jewkes, Jane Merriman and Jan Harvey)

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