Competition in the media sector
Media have a key economic role in the EU. In 2010, the size of the audiovisual market in the European Union was €122 billion (source: European Audiovisual Observatory) and the audiovisual sector directly employed over one million people in the EU.
Media is also vital for the development of information and communication technologies (a main component of the Europe 2020 strategy) and to develop and preserve culture, information, education and democracy.
The Commission's competition department works to ensure that the competition rules are respected in the media sector.
Actions of the Commission in the fields of antitrust, merger and State aid control.
A number of media-related antitrust cases have already been pursued by the Commission and ruled on by the Court of Justice. National competition authorities and courts also apply EU antitrust rules in cooperation with the Commission.
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.
Competition restrictions hindering the development of digital book publishing initiatives should also be prevented. In the eBooks case the Commission investigated Apple and some major international e-book publishers, since it suspected that these companies may have contrived to limit retail price competition for e-books in the European Economic Area, in breach of EU antitrust rules.
In December 2012, the Commission adopted a commitment decision that rendered legally binding commitments offered by Apple and four international e-book publishers: Simon & Schuster (CBS Corp.), Harper Collins (News Corp.), Hachette Livre (Lagardère Publishing) and Verlagsgruppe Georg von Holtzbrinck (owner of inter alia Macmillan). In July 2013, the Commission adopted a similar decision with regard to Penguin, which offered substantially the same commitments as the other four publishers.
Collective management and licensing practices for content should not obstruct the development of cross-border 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. In April 2013, the General Court partially annulled and partially upheld the Commission's decision. The General Court examined for the first time and upheld the Commission's treatment of cultural diversity and protection of minority repertoires arguments raised by the collecting societies.
- IFPI case – ensured that collecting societies can compete in providing pan-European simulcasting licenses
- Online commerce roundtable – discussed how to take full advantage of opportunities to distribute content online
Switch from analogue to digital TV broadcasting
The switch from analogue to digital results in freeing substantial spectrum resources, which will become available to deploy new services and technologies (the "digital dividend"). To ensure that the digital dividend leads to new entry and broader viewer choice, EU law requires that such dividend is allocated subject to specific conditions (e.g. open, transparent and non-discriminatory procedures).
The Commission took action against Member States who favoured incumbents when assigning the rights to use the 'digital dividend' spectrum, notably against France, Bulgaria and Italy. Following the Commission's intervention, France assigned frequencies to new operators in 2012, Bulgaria took legislative steps to address the breaches and Italy took steps in order to assign new digital frequencies (multiplexes) in 2013.
As the media sector evolves rapidly, firms tend to develop new types of mergers and cooperation. Digital content is increasingly available and can be distributed across various platforms (digital terrestrial, cable, satellite, IPTV, Internet, mobile networks).
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.
The Commission analyses markets, taking into consideration the technical and regulatory developments in the 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.
In September 2012, the Commission approved proposed acquisition of EMI's recorded music business by Universal Music Group. The approval was conditional on the divestment of EMI's Parlophone label and numerous other music assets on a worldwide level.
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.
See the list of cases handled by the Commission.
The legal framework and the Commission’s policy towards public service broadcasting is further explained in:
Commission policy regarding state aid for film and audiovisual works is laid out in its 2013 Cinema Communication. 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);
- territorial spending obligations are acceptable if they do not link more than 160% of the aid amount and in any case not more than 80% of the production budget to expenditure in the granting Member State;
- 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 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 refers to aid for film production, which represents about 80% of the film support provided by EU member countries (an estimated €1.5 billion per year), for developing film projects, for promoting and distributing films and for cinemas.
See a selection of decisions which illustrate how the Commission applies its policy towards film support.
More about the Commission’s audiovisual policy:
Read about media and sports on the Sports section.