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EPC media alerts: April 2004

The monthly update on EU media issues

Broadcasting

EPC, Association of Commercial Television (ACT) and Association Européenne des Radios (AER) call for rigorous application of state aid rules to publicly-funded broadcasters following publication of White Paper.

For the first time, Europe’s leading private media organisations have come together to commission a detailed White Paper amounting to a frank exposé of the most striking examples of anti-competitive behaviour by the publicly funded media. This major publication from the EPC, ACT and AER coincides with the Commission’s current consultation on the future relationship between public services (including publicly-funded broadcasting) and State Aid rules. Commission officials are due to meet again this month to continue discussions on this issue.

With public broadcasting the third most subsidised industry in Europe, the report concludes that years of over-funding and under-regulation of publicly funded broadcasters (PFBs) have undermined the competitiveness of the television industry as well as adversely affecting multi-channel television, TV programme production, radio broadcasting, internet content and the press.

According to the report, entitled "Safeguarding the Future of the European Audiovisual Market", PFBs received 82.2 billion euros of State Aid between 1996 and 2001. It took the Commission over 10 years to deal with some of the complaints against the PFBs. This delay, compounded by:

  1. inadequate financial transparency in publicly-funded broadcasting,
  2. the failure of Member States to properly define the remit of publicly funded broadcasters in receipt of State Aid, has resulted in an unprecedented level of market distortion in a liberalised market, evidence of which is detailed in the White Paper.

Specifically, ACT, AER and the EPC contend that PFBs have benefited and will continue to benefit from:

  • Forecast growth in State Aid to European PFBs of 4.8%, more than 20% ahead of forecast GDP growth over the period 2001-2004;
  • Lack of independent regulation: over half of Europe’s PFBs do not fully comply with the independent regulation requirement set out in the Commission’s Communication on the application of State Aid rules to public service broadcasting;
  • Options to capture commercial revenues in addition to State Aid, something not permitted in other liberalised sectors according to the EU Treaty.

EPC Chairman Francisco Pinto Balsemão said: "Whilst we all support distinctive public service broadcasting, we do not support activities that distort markets or run contrary to the letter or spirit of the EU Treaty. We believe, and our White Paper clearly demonstrates, that a combination of massive State Aid and inappropriate regulation is affecting trading conditions and competition within Member States distorting in particular the advertising market for TV and other media, including the press and new media. The logical conclusion of our study is that publicly funded broadcasters should in future be prevented from having access to commercial revenues when also in receipt of State Aid".

To this, ACT Director General Ross Biggam added: "Every European State has a unique broadcasting system. But there are some common competition issues, such as the need for independent regulation and for financial transparency. These will become more, not less, important as Europe’s media markets move towards the digital future. We will continue to debate these important issues with EU and national institutions".

AER Chairman Sergio Natucci concluded: "As the Commission debates the future of State Aid rules for services of general interest - including broadcasting - we call on everyone involved in the decision-making process to consider what is at stake for the European audiovisual sector. Especially now, on the eve of EU enlargement, we ask the Commission, as champion of fair competition, to ensure that any decisions taken on this issue strengthen , not weaken, the existing procedures in order to guarantee, not hamper, the future development of a vibrant, pluralistic audiovisual industry in Europe".

Click here for the white paper.

 

Market abuse

EPC’S persistence on market abuse implementation starts to pay off

The EPC’s persistence in trying to persuade the Commission to stick to its original promises to ensure that only a very small part of the market abuse directive should affect financial journalists, appears to be finally paying off. At least ten Member States have raised concerns about the way in which the directive would affect the press at a meeting of the European Securities Committee. At the same meeting, the Commission came prepared with a statement which clearly described the exact effects on the media, giving clear guidance to member states on how they should limit their implementing measures to all but the very basic activity of share tipping. The EPC is carrying out more work at national level to ensure that regulators understand the implications for the media and do not impose additional constraints. The EPC has been battling hard against a directive drawn up financial services experts which has hugely negative implications for financial journalism. It is hoped that the Commission’s positive response to the EPC’s continued consultation will provide some protection against a directive that was set to threaten the freedom of financial journalism.

For the full background to the issue, click here.

EPC White Paper to expose anti-competitive behaviour of publicly-funded media

Later this month, the EPC will be publishing a frank exposé of the most egregious examples of anti-competitive behaviour by the publicly funded media showing, amongst other things, how this distorts the advertising market for TV and other media, including the press and new media. This "White Paper" is being drawn up by EPC in association with the private TV and radio broadcasters of Europe. Francisco Pinto Balsemão says that "Although some anti-competitive behaviour is currently under scrutiny following a stream of complaints from private media companies over the past 11 years, we want to make sure that Decisions taken this week strengthen, not weaken the existing procedures".

 

Advertising

Media industry commits to improving self-regulation

On 25 June 2023 in Brussels, the EPC and other representatives of the advertising business will sign a Charter committing the media industry to improving self-regulation and to supporting the extension of self-regulation to the ten new European Member States.

For additional information or to register, please visit the European Advertising Standards Alliance’s web site www.easa-alliance.org or telephone Sara McClintock at +32 2513 7806.

French ban on TV ad s for alcohol gets initial approval

The First Advocate General at the EU Court of Justice, Antonio Tizzano, has concluded that the French ban on TV ads for alcohol is not in breach with either the EU principle of freedom to provide services or the Television Without Frontiers Directive. Tizzano argued that the ban is not disproportionate and is justified on the basis of protection of public health. The case was brought when the French TV ad ban meant that brand names of alcohol beverages could not be visible for any TV coverage appearing in France of football matches, whether played at home or abroad. Whilst this is an important opinion, the final judgement will not be delivered until a later date.

Copyright

Enforcement directive welcomed as first step in fight against piracy and counterfeiting

The EPC and other organisations in the creative sector welcomed a vote by the European Parliament on 9 March adopting an Enforcement Directive designed to improve tools for fighting piracy and counterfeiting in the EU. The Council is due to adopt the directive formally in the coming weeks.

 

Media pluralism

Publishers question need for new legislation

The EP's Citizens' Rights Committee own-initiative Report on Media Pluralism calls for action in a number of areas, including the call for a directive to safeguard media pluralism along with annual pluralism reports. The report looks into whether or not Article 11 (2) of the Charter of Fundamental Rights is at risk of violation, with reference to new EU member states as well as existing ones. The article stipulates: "The freedom and pluralism of the media shall be respected".

Whilst the EPC supports efforts by Member States to guarantee media pluralism, it questions the need for any new legislation at EU level and supports the Commission’s view that it lacks the legal competence to bring forward such as directive despite the EP’s argument that that where Member States fail to take adequate measures, the EU has a political, moral and legal obligation to ensure within its competence that media pluralism is respected. Specifically, the Committee believes protection of media diversity should become the priority of EU competition law and the dominant position of a media company should be considered as an obstacle to media pluralism in the EU. Legislation should be adopted at EU level to prohibit political figures from having major economic interests in the media, it says.

In addition, the Committee calls for an annual report on pluralism to be drawn up. The EU Constitution should contain a provision on the need to ensure pluralism in the media. Member States should incorporate in their constitutions an active duty to promote respect for freedom and diversity of the media. MEPs take the view that there are sufficient concerns to warrant a detailed examination of the situation by the Commission, which should be followed by appropriate legislative proposals. A preliminary study carried out by the European Institute for the Media (EIM) shows that in each of the eight countries examined (France, Germany, Ireland, Italy, Netherlands, Poland, Sweden and UK) there are issues which require further investigation. The committee notes that in Spain government pressure on the public service broadcaster TVE resulted in ignoring the facts regarding responsibility for the terrorist attacks of 11 March. Furthermore, it says, there is a clear risk of serious and persistent breaches of the right to freedom of expression and information in Italy.

The complete study by the EIM is due in June and will contain final comparative conclusions based on the situation in all 25 current and new Member States.

To read the full Committee report, click here.

The report will be discussed at the plenary at the end of this month.

The Commission itself has published two papers on digital television and interoperability in which they make several references to media pluralism, but in a positive way given that digital television is expanding choice etc. Nevertheless, there remains a question mark in their minds over the possible dominance of some players in the digital TV market. Media pluralism is likely to continue to receive attention at European level during this consultation and during the forthcoming work on the Television Without Frontiers Directive. Several other EP committees are also due to adopt reports in the coming weeks on media pluralism.

 

Rome II

MEPs delay ROME II decisions until after EP elections

Publishers will be relieved to hear that MEPs have decided to delay decisions on ROME II, a crucial legal instrument concerning the application of non-contractual law, the content of which has huge implications for the media industry in that it will decide where publishers will be legally liable in any legal case against them - in the country where their publication has been purchased and read or the country of publication. Publishers continue to fight to preserve the country of origin principle which would safeguard them from the complexity of 25 different legal frameworks and from prosecutors picking and choosing members states from which to litigate which would potentially bring them the greatest gain.

The first reading will now not take place until after the elections.

The current text states that damages should be calculated based on the circulation of a publication in the place where a case is brought. However, it does not provide legal certainty and still means that publishers would have to check several different privacy and/or defamation laws before publication.

 

Nutritional claims

Controversial dossier may not survive elections

The vote in the Environment Committee will definitely be delayed which means that the First Reading will have to be postponed as the Environment and Legal Committees must agree a text before it goes to plenary. With several thorny issues still outstanding - namely, nutritional profiling, the issue of "psychological benefit" claims and the use of medical associations to support claims, there is disagreement between the EP and the Commission about the possibility (proposed by the EP Rapporteur) that a separate directive dealing with nutritional claims would be more democratic rather than leaving such decisions to a committee of national civil servants. To add to the debate, a German member of the Council Working Group has proposed that the proposal should include a ban on claims directed at children - a proposal that has won some support from members of the Environment Committee. Some German MEPs have even tabled a motion to scrap the proposal altogether and start again…All in all, hardly the recipe for a quick solution and a controversial issue a new Parliament may be reluctant to take up in the near future.

 

 

 

For more information on any of the following issues, contact Heidi Lambert Communications Tel: +44 1245 476 265.

Internet regulation
Market abuse
Tobacco advertising
Children's advertising
Jurisdiction and applicable law
Duty to trade fairly
Sales promotion

Contacts

Angela Mills, Director of  EPC: Tel: +32 2 231 1299 (Brussels) or +44 1865 310 732 (UK) angela.mills@epceurope.org.

Heidi Lambert: Tel: +44 1245 476 265 heidilambert@hlcltd.demon.co.uk.