Vivendi will complain to EU if Italy enacts law curbing its business - letter

* Draft law breaches EU principles, Vivendi tells Italy’s PM

* French group also sent a letter to EU

* May challenge Rome’s plan to create broadband player - sources

ROME, Nov 18 (Reuters) - French media firm Vivendi has told Italy it is ready to lodge a formal complaint with the European Commission over a draft law limiting its position in the country, according to a letter seen by Reuters.

The Paris-based company, controlled by billionaire Vincent Bollore, is a key player in Italy as it holds a 24% stake in former phone monopolist Telecom Italia (TIM) and 29% of top commercial broadcaster Mediaset.

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

The bill “breaches the principles of legality and legal certainty and... the right to property, which are all protected by EU law and international conventions,” Vivendi CEO Arnaud Depuyfontaine wrote in a Nov. 13 letter to Prime Minister Giuseppe Conte and the economy and industry ministers.

“Faced with the adoption of the amendment, Vivendi would regretfully have no other choice, in order to preserve its legitimate rights and interests, than filing a formal complaint with the EU Commission.”

The French group sent a second letter with similar content to the European Commissioner for the internal market, Thierry Breton, three sources close to the matter told Reuters.

Two of the sources added that if the government pushed ahead with its draft law, Vivendi may withdraw its support for Rome’s plan to create a national broadband operator by merging TIM’s landline grid with state-backed company Open Fiber.

Vivendi declined to comment on this story. (Reporting by Giuseppe Fonte and Elvira Pollina, editing by Gavin Jones and Elaine Hardcastle)