Tighter State Aid Rules for Public TV Channels

Abstract

In July 2009 the European Commission replaced its ‘old’ Communication on the application of State aid rules to public service broadcasting (OJ 2001 C 320/5; hereafter: Broadcasting Communication 2001) by a modernised Broadcasting Communication (hereafter: new Communication). The new Communication is based on experiences gained in its—often very controversial—decision making practice, which takes into consideration the technological changes of the present and the future media environment. During the last 30 years broadcasting has undergone major changes. In the 1980s the broadcasting market was gradually opened to competition and Member States started to allow private operators to broadcast. Since then private competitors still seem to struggle against their main competitors, that is, the State funded public service broadcasters which have vast financial means at their disposal. In some Member States the funding of public broadcasters amounts literally to billions of Euros. In the first place, private competitors complain about the very wide scope of public broadcasters’ activities, especially criticising that this also includes purely commercial programmes, like entertainment and sports. It is indeed often surprising that some Member States still try to label endless soap operas, reality shows, gossip programmes, and martial arts as a ‘public service’. In addition, the private competitors’ concerns focus on the possibility given to public broadcasters to generate significant advertising revenues in addition to their State funding which distorts the prices of advertising below a price level which is in line with normal market conditions. This reduces the revenue of private competitors, whereas public broadcasters are in a position to compensate the resulting lower revenues by their own public compensation. After many years of debate, the Commission first adopted the Broadcasting Communication 2001, which set out the framework governing State funding of public service broadcasting. Since then, the Commission has become very active in this field and has meanwhile adopted over 20 decisions concerning the financing of public service broadcasters, which have further clarified the application of the rules (an overview of this decision can be found at ,http://ec.europa. eu/competition/sectors/media/decisions_psb.pdf. ). In the meantime, technological changes have fundamentally altered the broadcasting and audiovisual market. There has been a multiplication of distribution platforms and technologies, such as digital television, IPTV, mobile TV, and video on demand. Again, due to their unrivalled financial strength, many public channels were able to make enormous investments in these fields, thereby enabling them to stay at the forefront of these technological developments, in particular in the field of online services. As a result of this process, on 2 July 2009 the European Commission adopted after extensive public consultations a revised Broadcasting Communication based on its recent decision making practice in individual cases.