European Commission set to take key decisions this Wednesday, 18 February which could absolve Public Broadcasters from State Aid Control
Following behind the scenes talks between Commission cabinets last week in Strasbourg, the EU Commission is currently planning the adoption of some key Decisions which could exempt public service operators (including public broadcasters) from state aid control – currently exercised by DG COMP. Unless changes are made to the drafts before Wednesday, public service operators could escape thorough scrutiny over the use of public money. In the case of publicly funded broadcasters, the European Publishers Council (EPC) fears that distortions of competition arising from the use of advertising revenues to support TV and new media services from publicly funded media will get worse.
Final texts have yet to be agreed by the Commissioners on how far reaching these decisions will be. The EPC is calling for proper consultation of private sector interests as well as the Member States prior to any final decisions.
EPC Chairman, Francisco Pinto Balsemão said: “Publicly funded media is the third-most state aided sector in Europe and we must ensure that the Commission adopts a framework which allows for proper scrutiny and that private sector interested parties are consulted in an open and transparent way”.
The EPC is calling on the Commission to ensure that the forthcoming decisions:
- provide for an efficiency test of the public service in question or the effects of such measures on private competitors and
- a continuation of the requirement of operators in receipt of state compensation to notify the amounts to DG Competition in Brussels.
It is believed that the Commission plans to adopt its decisions on the basis of Article 86 (3) of the EC Treaty. This provision allows for the adoption of Decisions by the Commission alone (i.e. without the involvement of the European Parliament or the Council), and by only a simple majority vote by the Commissioners.
The Decisions are due for adoption by the Commission on Wednesday, 18 February 2004.
Some of the reasons for the Commission’s initiative appear to be:
- Prodi’s wish to protect public service operators from competition rules.
- A way of dealing with the fall out of the ruling of the European Court of Justice in summer 2003 in the Altmark case, which established strict criteria for the compatibility of public financing of public services with EU state aid rules (including transparency, the ex-ante-definition of the public service in question and an efficiency-test which compared the public service operator with competing commercial operators). This new test has already been used by the Commission in recent cases, such as an investigation into the legality of public compensation paid to Dutch public service broadcasters and is deeply unpopular with the publicly funded media in Europe.
The EPC will next month 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”.
More details will follow once the Commission has announced its decisions on Wednesday.
For further information, please contact Angela Mills Wade on Tel: +44 1865 310 732 or Heidi Lambert on Tel: +44 1245 476 265.