Media have a key economic role in the EU. In 2008, audiovisual broadcasters generated a turnover of EUR 64 billion (source: European Audiovisual Observatory), and in 2006, 1.8 million people worked in the sector (source: Eurostat).
Media is also vital for the development of information and communication technologies (a main component of the Europe 2020 strategy) as well as for the development and preservation of culture, information, education and democracy.
A number of media-related antitrust cases have already been pursued by the Commission and ruled on by the Court of Justice to bring increased consumer choice, better quality and lower prices to the sector.
Competition in content markets – access to content is crucial to enable competition in media markets. This applies to infrastructure, platforms and devices (satellite, cable and terrestrial networks, TV sets, PCs, mobile devices). Availability of content on a multi-country basis is also vital for the single market to develop and deliver the benefits of the digital era.
Collective management and licensing practices for content – should not obstruct the development of crossborder services on the internet or restrict right-holders' / users' choice.
CISAC case – banned exclusivity and membership restrictions imposed by collecting societies, as well as concerted territorial restrictions
IFPI case – ensured that collecting societies can compete in providing pan-European simulcasting licenses
Availability of premium content (sport rights, music, popular films, etc.) – the Commission has adopted antitrust decisions on, for example, joint selling of football broadcasting rights. To address competition concerns, the parties organised a competitive bidding process, limited the duration of their agreements to transfer exclusive rights to media companies and divided media rights into several packages.
Switch from analogue to digital TV broadcasting – by 2012 this will free substantial spectrum resources, which will become available to deploy new services and technologies (the "digital dividend"). EU countries may not favour incumbents when assigning the rights to use the 'digital dividend' spectrum.
Competition restrictions hindering the development of digital book publishing initiatives should also be prevented.
The rapid evolution of the media sector, including the growing availability of digital content which can be distributed across various platforms (digital terrestrial, cable, satellite, IPTV, Internet, mobile networks), increases the tendency for firms to develop new types of mergers and co-operations. Consequently, one of the Commission’s main concerns is that mergers in the media sector do not significantly impede competition and that access to key elements (whether content, technology or interconnection) is not affected.
Broadcasting – the Commission analyzes markets, taking into consideration the technical and regulatory developments in the various EU countries.
Modification of merger commitment in the Newscorp/Telepiù case – In 2010 the Commission modified a commitment imposed on News Corp in 2003 whereby Sky Italia was prevented from participating in the public tender for the allocation of digital terrestrial television (DTT) frequencies or multiplexes. The 2010 decision allows the company to bid for one multiplex, but to use it in case of a successful tender for a period of five years only to broadcast free to air TV – not pay TV.
News – in 2009 the Commission investigated the proposed acquisition of joint control of Retriever Sverige of Sweden by Swedish company Bonnier and Norwegian company Schibsted. The initial investigation revealed that articles from major Swedish newspapers controlled by Bonnier/Schibsted were a critical input for the provision of media monitoring and archive services in Sweden. Bonnier/Schibsted would have had both the ability and incentive to discriminate against Retriever Sverige's competitors in the supply of news articles. The merger was abandoned before the Commission could conclude its in-depth investigation.
Recorded music – the Commission carried out an extensive market investigation of Sony/BMG, a joint venture combining the music businesses of Sony and Bertelsmann. The merger was approved for the second time by the Commission in 2007. Shortly after that decision the EU Court of Justice set aside the 2006 annulment by the Court of First Instance of the Commission's initial 2004 clearance decision.
State aid in the media sector supports public service broadcasting and films, a recognition that government intervention may be necessary to fund services of general economic interest, to achieve economic objectives of growth and innovation, social cohesion, cultural diversity and to satisfy society's democratic, social and cultural needs. The positive effects of state aid must be weighed against the risk of crowding out private initiatives and ultimately of hindering innovation.
Public service broadcasting
To minimise the impact of state subsidies on competition, the Commission requires EU countries to define the public-service obligations broadcasters must meet and limit state aid to the actual costs of these obligations. A public service broadcaster may carry out commercial activities, provided they are financed commercially and follow normal market behaviour.
The Broadcasting Communication requires ex ante control of significant new media services launched by public service broadcasters and which should receive State aid (balancing the market impact of such new services with their public value); addresses the issue of pay services in the public service remit; and requires effective control of overcompensation and supervision of the public service mission on the national level, while offering financial flexibility for public service broadcasters.
The Communication is designed to safeguard healthy competition in the rapidly evolving media environment. Public service broadcasters can take advantage of digital technology and Internet-based services to offer high quality services on all platforms, provided they do not distort competition unduly at the expense of other media operators. European citizens and stakeholders will be able to give their views in public consultations before any new services are put on the market by public service broadcasters.
Commission policy regarding state aid for film and audiovisual works is laid out in its 2001 Cinema Communication, whose assessment criteria are due to be reviewed by the Commission by 31 December 2012. The Communication allows film-support schemes meeting the following state aid assessment criteria to benefit from the cultural derogation to the general ban on state aid in the EU Treaty:
the aid must be legal under the EU Treaty (eg, it must not affect the internal market);
the aid must be directed towards a cultural product. Each Member State must ensure that the content of the aided production is cultural according to verifiable national criteria (in compliance with the application of the subsidiarity principle);
the producer must be free to spend at least 20% of the film budget in other Member States without suffering any reduction in the aid provided for under the scheme;
the aid intensity must in principle be limited to 50% of the production budget, except in the case of difficult and low budget films
the aid must not provide supplements for specific filmmaking activities (eg. post-production).
The Cinema Communication only refers to film production, which represents about 80% of the film support provided by EU member countries (an estimated €1.5 billion per year). However, the Commission has also approved film support schemes for developing film projects, for promoting and distributing films and for installing digital projection equipment under certain circumstances.
Following a first round of public consultation on the basis of an issues paper, the European Commission has launched a second public consultation
its draft Communication on films and other audiovisual works. Three main changes are proposed in the draft Communication:
To extend the scope of activities covered by the Communication to include all phases of an audiovisual work from concept to delivery to audiences. The existing rules only apply to production support.
To limit the spending obligation in the territory granting production support to a maximum of 100% of the aid;
To require that film production support schemes that base the calculation of the aid amount on the production expenditure in a given territory, such as film tax incentives, treat any production expenditure in the European Economic Area (EEA) as eligible.
The Commission invites interested parties to submit their comments by 14 June 2012.