Court of Appeals Renders Decision on the Merits

GRUPO CLARIN S.A.

Court of Appeals Renders Decision on the Merits

On 17 April 2013, Grupo Clarín S.A. (the "Company") informed the Argentine Securities Commission and the Buenos Aires Stock Exchange that on that date the Company had been served notice of a decision rendered by the Federal Court of Appeals on Civil and Commercial Matters in re "Grupo Clarín S.A. and Others v. National Executive Branch and other re: Merely Declarative Action" File No. 119/2010.

Attached are free translations of the relevant sections of the decision and of Sections 41, 45, 48 and 161 of Audiovisual Communication Services Law No. 26,522.

Enquiries:

In Buenos Aires:

Alfredo Marín/Agustín Medina Manson

Grupo Clarín

Tel: +5411 4309 7215

Email: [email protected] 

In London:

Alex Money/Clare Gallagher

Temple Bar Advisory

Tel: +44 20 7002 1080

Email: [email protected] 

In New York:

Melanie Carpenter

I-advize Corporate Communications

Tel: +1 212 406 3692

Email: [email protected]

FREE TRANSLATION

National Judicial Branch

FILE NO. 119/2010 - I - "GRUPO CLARÍN S.A. AND OTHERS V. NATIONAL EXECUTIVE BRANCH AND OTHER RE: MERELY DECLARATIVE ACTION"

Court No. 1

Secretariat No. 1

In Buenos Aires on the 17th day of April, 2013, the judges of Chamber No. 1 of the Federal Court of Appeals on Civil and Commercial Matters gather to render a decision on the case referred to in the above title […]

[Recitals from the opinion of each judge intentionally omitted]

[…]

In light of the deliberation [of the judges] and the conclusions of the preceding Agreement, having listened to the opinion of the General Attorney before this Court, the Court DECIDES: a) To confirm the dismissal of the exception of lack of standing brought in connection with Grupo Clarín S.A. and Teledigital Cable S.A.; b) To dismiss the claim of unconstitutionality brought by claimant against Sections 41 and 161 of Law No. 26.522; c) To dismiss the claim of unconstitutionality with respect to Section 45, point 1, subsections 'a' and 'b' (except for the required limitation to one signal), and point 2, subsections 'a' and 'b'; to declare that this constitutional compatibility assumes that claimant has a right to be compensated for damages that result from the divestment as provided under recitals 18 and 24 of the opinion of the preceding judge; d) to declare the unconstitutionality of the rules included under Section 45, point 1, subsection 'c' and final paragraph; point 2, subsections 'c' and 'd' and the final paragraph; and the entire point 3, including the limitation to holding ownership title to one (1) content signal provided under point 1, subsection 'b' of Section 45, Law No. 26,522; and to order their inapplicability to the licenses exploited by claimant; e) To declare the unconstitutionality of Section 48, second paragraph, Law No. 26,522; and to order its inapplicability to the licenses exploited by claimant; f) To reject the claim for damages, as claimed under this case-file; g) To revoke the decision rendered under Point 3 of the decision of pp. 3204/3232; h) to allocate costs of the litigation as incurred on both instances (Section 68, second paragraph) as incurred (Section 68, second paragraph and Section 71 of the National Code of Civil and Commercial Procedures).

Let this decision be registered, notified to all parties by the Secretariat […] -to the General Attorney at his office-and the file be duly returned.

/s/ Francisco de las Carreras

/s/ Ricardo V. Guarinoni

/s/ María Susana Najurieta

FREE TRANSLATION

Audiovisual Communication Services Law No. 26,522 dated as of October 10, 2009.

[…]

SECTION 41.- Transfer of Licenses. The audiovisual communication service licenses are not transferrable.

Exceptionally [this law] authorizes the transfer of shares or quotas of licenses after five (5) years of the term of the license have lapsed and when the transaction is necessary for the continuity of the service, respecting that the original holders of the license shall keep more than fifty per cent (50%) of the equity subscribed or to be subscribed and that represents more than fifty per cent (50%) of the corporate votes. Such transfer shall be subject to prior confirmation by the application authority, which shall issue a grounded resolution providing for the authorization or denial of the requested transfer, taking into account fulfillment of the requirements necessary for its award and the maintenance of the conditions that motivated the [original] award.

Any transfers made without the corresponding and prior approval shall be punishable with the full revocation of the awarded license and shall be absolutely null and void.

Non-profit entities. Licenses granted to non-profit private providers are not transferable.

[…]

SECTION 45.- Multiplicity of Licenses. In order to guarantee the principles of diversity, plurality and respect for local matters, [this law] sets forth limitations to the concentration of licenses.

In that regard, an individual or entity may hold title or participate in companies that hold title to broadcast service licenses subject to the following limitations:

1. At the national level:

a) One (1) audiovisual communication services license on satellite support. Title to a satellite audiovisual communication services license by subscription excludes the possibility of holding title to any other type of audiovisual communication services license;

b) Up to ten (10) audiovisual communication services licenses plus title to the registration of a content signal, in the case of sound broadcast, broadcast television and television by subscription services that use radioelectric spectrum;

c) Up to twenty four (24) licenses, without prejudice to the obligations that arise from each license granted, in the case of licenses for the exploitation of audiovisual communication services by subscription with physical link in different localities. The application authority shall determine the territorial and population scopes of the licenses.

Multiplicity of licenses -at the national level and for all services-may in no case imply the possibility to render services to more than thirty five per cent (35%) of the aggregate national population or of subscribers to the services referred under this Section, as applicable.

2. At the local level:

a) Up to one (1) Amplitude Modulated (AM) broadcast radio license;

b) One (1) Frequency Modulated (FM) broadcast radio license or up to two (2) licenses when there are more than eight (8) licenses in the primary service areas;

c) Up to one (1) subscription broadcast television license, if and only if the requesting party is not a holder of an open broadcast television services license;

d) Up to one (1) open broadcast television services license, if and only if the requesting party is not a holder of a subscription broadcast television license.

In no case shall the sum of all licenses granted in the same primary service area or group of overlapping primary service areas, exceed three (3) licenses.

3. Signals:

The holding of signal registries shall adjust to the following rules:

a) Providers listed under point 1, subsection 'b' shall be entitled to hold one (1) audiovisual services signal.

b) Providers of subscription television services may not be registered holders of any signals, except for the signal generated by such providers.

When the holder of a service requests the award of another license in the same area or an adjacent area with large overlap, the license may not be awarded when the requested service uses the only frequency available in that area.

[…]

SECTION 48.- Wrongful concentration practices.  Prior to the award of licenses or the authorization to transfer shares or quotas, [the application authority] shall verify the existence of corporate relations that reveal processes of vertical or horizontal integration of activities, whether or not related to social communications.

The multiple license regime set forth under this law may not be alleged as an acquired right in light of the general laws that, with respect to deregulation, demonopolization or antitrust may be created now or in the future.

The holding of licenses of different kinds of services are deemed incompatible when they do not comply with the limitations set forth under Sections 45, 46 and related Sections.

SECTION 161.- Conforming. Holders of licenses of the services and registries governed by this law that, as of the date of its enactment do not meet or comply with the requirements provided herein, or companies that at the time of entry into force of this law are holders of a larger quantity of licenses or with a shareholder composition that is different from the one permitted [hereunder], must conform to the provisions hereof in a term not greater than one (1) year as from the moment that the application authority establishes the transition mechanisms. Upon expiration of this term [such holders] will be subject to the measure that -in each case-correspond to such breach.

Solely for the purpose of the adjustment set forth in this Section, [the law] shall permit the transfer of licenses. The applicable provision shall be the last paragraph of Section 41.