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MEMORANDUM TO THE EUROPEAN COMMISSION 
CONCERNING PROPOSED EU LEGISLATION ON MEDIA CONCENTRATION

Introduction

The European Publishers’ Council (EPC)  has produced this Memorandum to re-state the salient points from EPC submissions made over the past four and half years since the Commission’s publication of the original Green Paper in December 1993 on the subject of media concentration. 

We wish to re-state these important points now, before  the European Commission takes a final decision as to whether or not it wishes to proceed with a draft directive.  We wish to make it clear that we remain fundamentally opposed to legislation at the European level to regulate media concentration and pluralism as, in our view, an internal market directive will not meet its stated objectives of removing barriers to cross-border investment or stimulating growth in the media sector.  On the contrary, we believe media specific legislation to regulate media concentration will discriminate disproportionately against traditional media companies such as publishers. 

Background

Our comments are made against the following background:
 

  • The European Publishers’ Council (EPC) has always accepted in good faith that the Commission wanted to initiate EU legislation in the area of media concentration to help, not hinder, the development of European media companies.  The EPC represents many of Europe’s most successful players in the media sector in Europe and as such has submitted views throughout the pre-legislative, consultative phase with a view to informing the Commission’s thinking in this area. 
  • The EPC, since it was founded in January 1991, has supported in principle and contributed in detail to the development of many Commission initiatives emanating from DG XV including the Directives on Data Protection and on the Legal Protection of Databases; also the Green Papers on Encryption, Copyright, Commercial Communications, Electronic Commerce and the draft Directive for Regulatory Transparency in the field of new Information Society services. In addition we have worked closely with a number of other Directorates-General in other areas which affect our business including the Directive on Distance Selling, the review of the Broadcasting Directive, the control of harmful and illegal content on the Internet, the Protection of Minors and Human Dignity and forthcoming Commission Green Papers in the areas of Convergence and the Information Society generally. The initiative on media concentration, together with the draft directive to ban all forms of tobacco advertising, are the only proposals from the Commission that we have consistently opposed in their entirety. 
  • On the basis that the various drafts for a Directive on media concentration have received virtually unanimous opposition from the very companies the Commission has set out to help, we would ask the Commission now to consider withdrawing its proposals for legislation in this area. 
  • The EPC recognises that a very small number of companies have either not opposed EU intervention or have sought solutions to problems which they face at national level through EU harmonisation .  This minority opinion does not in our view justify a detailed directive at EU level which would not benefit the majority. 
  • Instead we would urge the Commission to consider alternative methods of dealing with individual requests for intervention, for example through existing mechanisms for bringing infringement proceedings or scrutiny under EU competition regulation.
Why the proposed directive will not meet its stated objectives of removing barriers to cross-border investment.

1.  There is no case for an internal market directive because the barriers that exist are commercial (often connected with acquisition and exploitation of rights), cultural and linguistic, not legal. No amount of harmonising legislation would remove these barriers.  Actual restrictions, e.g. those based on nationality and the monomedia press limits in France and Italy, are simply not addressed in the draft directive. 

2.  A very detailed directive is not justified at a time when other parts of the Commission are seeking ways to find solutions to the regulatory framework for the whole media and communications scene, including new players such as Microsoft, under competition policy. 

3.  Publishers feel a directive which deals only with newspapers, TV and radio unfairly discriminates against traditional media; Microsoft has agreed joint ventures and strategic alliances with many publishers for on-line activity; the same is true of telecoms companies.  Neither computer companies nor telecoms companies will be caught by a media ownership directive, even though their media market share will be increasing year on year.  A publisher’s share of such a joint venture would be counted in any calculation for cross-media audience under the terms of the multi-media threshold whereas Microsoft or a Telecoms company could forge an alliance with a TV company without such constraints.

4.  Publisher-based media companies with existing, or ambitions for, cross-media ownership are totally against the multi-media limit of 10% which would adversely affect the majority of EPC members either immediately or within a very short period of time.

5.  As we have said in all our submissions, it is impossible to assess audience share using a combination of different measurements which bear no relationship to each other, i.e. time spent versus copies sold.  Furthermore, a 30% share of the press market could never equate in terms of investment or advertising revenues to 30% of the TV market.  So an averaged figure would always discriminate unfairly against publishers. 

6.  The proposed discretionary exemption by Member State governments would not solve these problems.  No media company will be prepared to invest large sums of money if vulnerable to the whim of a government.  No company wants to approach potential investors in such a weak and uncertain position.  No potential investor will be prepared to make the financial commitments necessary on the basis of a political decision. 

7.  EPC believes that, once a proposal for a directive is before the European Parliament, MEPs will call for very stringent restrictions on cross-media ownership which would be totally unacceptable to industry (and possibly Member States).
 

The Realities of Convergence

The EPC is aware that the European Commission is addressing the question of convergence at the moment and that specifically, the regulatory implications of the convergence of the telecommunications, audiovisual and publishing sectors will be dealt with in a separate Green Paper. The EPC’s submissions on media concentration have always tried to put our views into the context of the market, and the changes to that market, in which publishers compete on a day to day basis.   Already since the Commission’s Green Paper on Media Concentration was first published in December 1993, many of the changes that were then only predicted have become a reality. The forthcoming Green Paper on Convergence offers a timely opportunity to take a much needed, broader view.

With the advent of digital technologies, particularly the introduction of digital television, European consumers will be able to receive hundreds of different information and entertainment services from all over the world.  Many of these new services will be interactive, changing the face of media as we know it today.  The convergence of traditional media companies with new players, new types of electronic services and new forms of delivery will lead to lowered barriers to entry and increased consumer choice. 

A converged multimedia market, with a glut of choice, reduces the need for regulators artificially to promote plurality through media-specific legislation.  As pictures travel along telephone wires and television sets are routinely fitted with modems to supply Internet services, a new, more generalised approach to regulation based on competition policy will more appropriate.  We recognise that both the telecommunications and media sectors are prone to concentration as successful companies attract more customers and profitable companies attract offers of take-over, merger or joint venture.  In such a competitive business environment we welcome vigilant antitrust regulation.  Many concentrative joint ventures involving media companies already fall within the Commission’s competence and the EPC has always supported the Commission’s moves to reduce the thresholds and simplify procedures under the EU Merger Regulation.

With dramatic increases in Internet use and the start of digital television the regulatory framework must evolve to recognise the natural shift away from the historical need for centralised regulatory controls which were necessary in days of spectrum scarcity and move towards helping the consumers find new ways to control what they receive in the home.  Plurality will be guaranteed by the unprecedented increases in media sources and content. 

Self-regulation by content providers will play a major part in content control in the future as global networks proliferate. Voluntary rating systems, together with technical means of protecting and filtering content, will be important contributions to content control.  Regulators face new challenges in terms of consumer protection such as ensuring confidentiality of data where electronic networks are used for ordering goods or services, for electronic payments and private communications. Consumer protection will be aided by technology, combined with best practice to provide users with secure systems for their transactions and the protection of their privacy. 

The European Publishers’ Council
16 June 2023