EUROPEAN COMMISSION Brussels, 16.9.2022 COM(2022) 457 final 2022/0277(COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a common framework for media services in the internal market (European Media Freedom Act) and amending Directive 2010/13/EU (Text with EEA relevance) {SEC(2022) 322 final} - {SWD(2022) 286 final} - {SWD(2022) 287 final}



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL •Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a regulation of the European Parliament and Council establishing a common framework for media services in the internal market (the ‘European Media Freedom Act’). The proposal delivers on the political commitment by President von der Leyen, who announced the initiative in her 2021 State of the Union address. In her speech, she stressed the role of information as a public good, acknowledging that media companies cannot be treated as any other businesses and that their independence must be protected at EU level. The initiative has been included in the Commission’s 2022 work programme. The media sector is part of the cultural and creative industries ecosystem, one of the 14 industrial ecosystems that are key for an inclusive and sustainable recovery and for the twin (green and digital) transition of the EU economy. At the same time, media services are not only an important and dynamic economic sector, they are also essential for a healthy civic sphere and for economic freedoms and fundamental rights, including equality. Independent media, and in particular news media, provide access to a plurality of views and are reliable sources of information to citizens and businesses alike. They contribute to shaping public opinion and help people and companies form views and make informed choices. They play a crucial role in preserving the integrity of the European information space and are essential for the functioning of our democratic societies and economies. With digital technologies, media services can increasingly be accessed across borders and through various means, while competition in the digital media space is increasingly international. The European Union is already a global standard setter in this field, with this proposal further strengthening and organising the European information space. Against this background, the proposal seeks to tackle a series of problems affecting the functioning of the internal market for media services and the operation of media service providers. In particular, media companies face obstacles hindering their operation and impacting investment conditions in the internal market such as different national rules and procedures related to media freedom and pluralism. These rules include in particular scrutiny of market concentrations for media pluralism purposes and protectionist measures affecting the operation of media companies. Such rules have created fragmentation in the internal market, impacting legal certainty for media market players and resulting in additional costs when operating across borders. The picture is further complicated by insufficient cooperation among national media regulators. The European Regulators Group for Audiovisual Media Services (ERGA) has limited scope for action, and that scope is related to audiovisual media services only. Moreover, ERGA does not have sufficient tools and resources to contribute to solving cross-border matters or practical issues in key areas of media regulation. The resulting insufficient regulatory convergence affects media market players, in particular providers of audiovisual media services and video-sharing platforms, and harms the public interest. The role of media regulators is also key in the protection from rogue media service providers, including those that are state-controlled, be it financially or editorially by certain third countries, which may prejudice or pose risks of prejudice to public security and defence. European media service providers also face increasing interference in their editorial decisions and ability to provide quality media services (i.e. services produced independently and in line with journalistic standards) in the internal market, as evidenced by the Commission’s annual rule of law reports and the Media Pluralism Monitor. The problem is driven by fragmented safeguards to prevent interference in the editorial freedom of all media and uneven independence guarantees for public service media, leading to distortions of competitive conditions in the internal market. Finally, internal market barriers and an uneven playing field result from the opaque and unfair allocation of economic resources. In particular, the opacity of and biases inherent to proprietary systems of audience measurement skew advertising revenue flows, affecting negatively in particular media service providers and disadvantaging competitors that provide audience measurement services abiding by industry-agreed standards. The internal market is also distorted by the opaque and unfair allocation of state advertising (i.e. public funds used for advertising purposes), which may be allocated preferentially to incumbent national service providers or used to favour and covertly subsidise certain media outlets that provide government-friendly views. The regulation in this area is fragmented and limited, with many Member States lacking specific rules and the existing rules varying in scope, to the detriment of legal certainty and with the ensuing risk of arbitrary or discriminatory decisions. While the gravity of the problems varies across the EU, overall they make it difficult for media service providers to use the internal market to its full potential, maintain economic sustainability and properly fulfil their societal role to inform people and businesses. The recipients of media services are also negatively impacted by an insufficient or non-independent media offer, the uneven playing field and the lacking protection of their interests. Both Parliament and Council have repeatedly called on the Commission to take action to lift barriers to the functioning of the internal media market and promote pluralism and independence in that market. In the final report of the Conference on the Future of Europe, published on 9 May 2022, in their proposals, citizens called on the EU to further promote media independence and pluralism, in particular by introducing a legislation addressing threats to media independence through EU-wide minimum standards. They also called to defend and support free, pluralistic and independent media, to step up the fight against disinformation and foreign interference, and to ensure the protection of journalists. Against this background, the proposal for a European Media Freedom Act aims to improve the functioning of the internal media market. The proposal is articulated around four specific objectives: ·Fostering cross-border activity and investment in media services by harmonising certain elements of the diverging national media pluralism frameworks, in particular to facilitate cross-border service provision. Through coordination at EU level, the proposal aims to ensure that when assessing media market concentrations independent national authorities approach media pluralism and media independence in a consistent manner. ·Increasing regulatory cooperation and convergence through cross-border coordination tools and EU-level opinions and guidelines. This will promote consistent approaches to media pluralism and media independence, and provide effective protection for users of media services from illegal and harmful content, including online and with regard to service providers (including from third countries) not following EU media standards. ·Facilitating provision of quality media services by mitigating the risk of undue public and private interference in editorial freedom. The proposal aims to guarantee that journalists and editors can work without interference, including when it comes to protecting their sources and communications. By fostering editorial independence, it also guarantees better protection for the interests of recipients of media services. ·Ensuring transparent and fair allocation of economic resources in the internal media market by enhancing transparency and fairness in audience measurement and allocation of state advertising. The proposal aims to ensure transparency, non-discrimination, proportionality, objectivity and inclusiveness of audience measurement methodologies, in particular online. It will also ensure transparency, non-discrimination, proportionality and objectivity in allocation of state advertising to media outlets, in order to minimise the risks of the misuse of public funding for partisan interests, to the detriment of other market players. It will thus promote fair competition in the internal media market. The legislative proposal is accompanied by a Recommendation, which sets out a catalogue of voluntary good practices for media companies to promote editorial independence and recommendations to media companies and Member States aimed to increase media ownership transparency. The Recommendation will contribute to mitigating the risks of unjustified interference in individual editorial decisions and enhancing access to information on media ownership. •Consistency with existing policy provisions in the policy area

This proposal is consistent with the existing EU horizontal and sectoral rules concerning media and online services. It seeks to address regulatory gaps, which affect the functioning of the internal media market. The proposal does so firstly by building on the revised Audiovisual Media Services Directive (AVMSD), which governs EU-wide coordination of national legislation for audiovisual media. It steps up cooperation within the European Regulators Group for Audiovisual Media Services (ERGA) set up by the Directive by transforming it into the European Board for Media Services (‘the Board’) and giving it a broader scope of action and additional tasks. The proposal lays down new rules related to media services, such as those on the protection of journalistic sources and communications, state advertising and audience measurement. By doing so, it complements the copyright reform, which supports the financial sustainability of the press. The proposal is fully consistent with, and complements the e-Commerce Directive and the Regulation on platform-to-business relations (P2B). It is also consistent with and complements the Digital Services Act (DSA) and the Digital Markets Act (DMA), which provide horizontal frameworks setting out harmonised rules for online services. The proposal addresses remaining sector-specific issues which the two horizontal instruments do not fully address. The proposal complements the EU competition rules, which do not directly address the impacts that market concentrations could have on media pluralism or independence, and State aid rules, which are applied on a case-by-case basis (often ex post) and do not sufficiently address the problems created by the unfair allocation of state resources to the media service providers. The proposal ensures that state advertising is systematically subject to ex ante rules on transparency, notably as regards the beneficiaries and the amounts spent, and on fair allocation of such advertising. The proposal, and in particular the state advertising provisions, are consistent with the proposal for a Regulation on the transparency and targeting of political advertising. Moreover, the proposal is complementary to and does not affect existing EU rules on transparency of ownership. The Anti-Money Laundering (AML) Directive is the main instrument to ensure beneficial ownership transparency, while the EU Company Law Directive regulates the information that in particular limited liability companies need to disclose in business registers. The AVMSD encourages Member States to adopt measures to make accessible information on the ownership structure of audiovisual media. The proposal will complement the existing framework by requiring all media service providers providing news and current affairs content to provide information on media ownership in particular on direct, indirect and beneficial owners, to recipients of media services. The proposal is also consistent with the Protocol on the system of public broadcasting in the Member States (the Amsterdam Protocol), which recognises the competence of Member States to define the public service remit of public service media and to provide for their funding insofar as such funding does not affect trading conditions and competition in the EU to an extent that would be contrary to the common interest. The Amsterdam Protocol implicitly confirms that public service media are within the scope of the internal market. The proposal is in line with the Strategic Compass for Security and Defence and relevant Council Conclusions. By strengthening the role and cooperation between media regulators, including in matters affecting the EU’s information space, the proposal complements the actions taken to develop the EU’s toolbox on Foreign Information Manipulation and Interference. The proposal is in line with the Council of Europe’s Recommendation of the Committee of Ministers to Member States on public service media governance. The recommendation states that public service media need to operate and evolve within a sustainable governance framework, which secures both the necessary editorial independence and public accountability. In view of the recent threats to journalistic sources, the proposal adds a targeted safeguard against the deployment of spyware in devices used by media service providers or journalists, building on protections provided by Directive 2002/58/EC (the ePrivacy Directive), Directive 2016/680/EU (the Law Enforcement Directive) and Directive 2013/40/EU on attacks against information systems. •Consistency with other Union policies The proposal builds on the European democracy action plan in which the Commission proposed a set of measures to promote democratic participation, fight disinformation and support free and independent media. By strengthening the protection of journalistic sources and communications, the initiative complements the Recommendation on the protection, safety and empowerment of journalists, as well as the proposal for a Directive and Recommendation on protecting persons who engage in public participation from manifestly unfounded or abusive court proceedings (‘Strategic lawsuits against public participation’). The proposal provides concrete actions in response to the European Declaration on Digital Rights and Principles for the Digital Decade, which calls for safeguarding the freedom of expression and information online, and supports the implementation of the Media and audiovisual action plan, in which the Commission set out a series of actions to strengthen financial sustainability and digital transformation of the media sector. The proposal aims at strengthening editorial independence of media service providers. In parallel, financial sustainability is a key element for protecting editorial independence from external and market pressures. As raised by stakeholders during the public consultation, the fragile economic situation of the media sector remains an issue, and has been exacerbated by the COVID-19 crisis. Securing diverse and sufficient financing sources could bolster the resilience and independence of media, and support the provision of quality services to Europeans. Consequently, the media sector has been increasingly turning to the EU for financial support, in view of the fact that the Commission has for long co-financed the independent media coverage of European affairs to foster a European public sphere. While inevitably limited in amount relative to the scale and importance of the sector, European funding is indeed well placed to contribute to the recovery of the sector from the COVID-19 pandemic, the digital transformation of news, and the experimenting across borders of new formats or new models to monetise content online. As a result, following the adoption of the Media and audiovisual action plan in December 2020, the Commission has bundled actions geared to support news media, in full respect of editorial independence. For example, it has set up MEDIA INVEST, a dedicated equity investment instrument under the InvestEU programme, designed to foster the financial capacity of European audiovisual companies. Equity support is also available to news media since 2022, combined with investment readiness actions to mobilise private investors and increase equity investment volumes. In parallel, the Commission is supporting the launch of a dedicated co-investment facility under the InvestEU programme with foundations and philanthropic organisations in order to target three specific mission areas, including ‘Media pluralism, democracy and culture’. Innovation is another focus of the bundle: under the research and innovation and digital programmes, financing is offered to develop innovative solutions, including in particular a soon-to-be-launched call to develop a European media data space. In addition, innovative research funded under Horizon 2020 and Horizon Europe helps to understand the impact of the media on citizens and democracy, and provide tools and strategies to foster a healthier and more diverse media landscape, tackling online disinformation and improving journalistic standards. Regular exchanges with the industry in the context of the European News Media Forum, also contribute to monitoring innovation in the sector, and provide a forum to discuss the EU agenda on the matter. Following the Media and audiovisual action plan, the news media sector has become a dedicated focus of the Creative Europe programme, designed to support the cultural and creative sectors. The programme can finance partnerships between media organisations in order to innovate, test new formats or share good business practices across borders. Creative Europe also co-finances projects that promote a more pluralistic media environment: grants allow to provide protection for reporters (including legal support) and cover areas such as fact-finding, monitoring, advocacy work, informing the public and awareness raising. EU funding also supported the operations of media councils, as well as the activities of the Media Pluralism Monitor. As of 2023, the Commission will also allocate dedicated funding under the Creative Europe programme to support media that serve the public interest, such as investigative outlets, thus contributing to a pluralistic debate across borders and a more healthy democracy. The demand for media funding exceeds the funds available. The European Parliament called for the reinforcement of the funding opportunities for the news media sector, in particular through a permanent News Media Fund and by strengthening the budgets for the Cross-sectoral and Media strands under Creative Europe. The Council also invited the Commission to strengthen funding for independent journalism. With a view to complementing current EU policies, and ultimately reinforcing the financial resilience of the sector, the Commission will map public financial schemes and initiatives developed by Member States and identify financing trends and gaps. 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY •Legal basis The legal basis for this proposal is Article 114 of the Treaty on the Functioning of the European Union (TFEU), which provides for the adoption of measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

The proposal aims to address the fragmented national regulatory approaches related to media freedom and pluralism and editorial independence. This will foster a common approach and coordination at EU level, ensure the optimal functioning of the internal market for media services, and prevent the emergence of future obstacles to the operation of media service providers across the EU. In particular, the proposal aims at tackling the following issues hindering the provision of media services in the internal market: ·national restrictions related to sources and communications of journalists as service providers, affecting the production and provision of media services; ·interference in the operation of media service providers, including their editorial decisions, and diverging approaches to protection of editorial independence; ·the risk of state interference in public service media, to the detriment of a level playing field in the single market and quality of public service media; ·the market operations of rogue operators (including media service providers that are state-controlled, be it financially or editorially, by certain third countries) that create tensions in the application of the free movement rules within the Union; ·given the increasing digitalisation of media service distribution, the risks to free provision of media services on very large online platforms, to the detriment of a level playing field in the internal market; ·national media market measures affecting the operation of media service providers restricting the free movement in the Union, thereby fragmenting the internal market and leading to legal uncertainty; the same applies to national rules and procedures for the assessment of the impact of media market concentrations on media pluralism and editorial independence; ·opacity and possible biases in audience measurement systems and methodologies, leading to market distortion, to the detriment of the level playing field in the internal market; ·unfair and un-transparent allocation of state advertising expenditure to media service providers, to the detriment of other media service providers, including those established in other Member States. In addition, Article 114 TFEU is an appropriate legal basis for the creation of new structures under EU law. This is particularly relevant given the governance aspect of the initiative, which aims to foster closer cooperation between national media regulators within an EU-level Board, which would be tasked to promote the effective and consistent application of EU media rules. The EU legislator must not only comply with fundamental rights when regulating the internal market, but also balance competing fundamental rights. The present Regulation proposal constitutes a harmonious, coordinated and multi-pronged legislative framework by which the legislator contributes to the development and protection of the internal market for media services, thereby also pursuing several further legitimate public interests (including the protection of users) and reconciling in a fair manner the fundamental rights of all the individuals concerned. •Subsidiarity The objectives of the intervention cannot be achieved by Member States acting alone, as the problems are increasingly of a cross-border nature and not limited to individual Member States or to a subset of Member States. Production, distribution and consumption of media content, including news, are increasingly digital and cross-border as the internet continues to drive the transformation of traditional media business models. The provision of media services across the EU is increasingly affected by global platforms, which act as gateways to media content while being prominent online advertising providers. A common EU approach, promoting convergence, transparency, legal certainty and a level playing field for the relevant media market players is the best way to advance the internal media market. It will reduce the burden for media service providers, who have to comply with different national legal regimes when they operate in several Member States. It will enhance legal certainty for media market players, thereby promoting fair competition and cross-border investment. It will also enable media regulators to adopt coordinated responses in matters affecting the EU’s information space and in particular the protection of EU consumers’ interests. The initiative takes due account of the Protocol on the system of public broadcasting in the Member States (the Amsterdam Protocol) and Article 4(2) of the Treaty on European Union (TEU). It will not interfere with Member States’ competence to provide funding to public service media so that they can fulfil their public service remit, as conferred, defined and organised at national level, nor will it interfere with national identities or regulatory traditions in the media field. It also takes due account of stakeholders’ views; it thus follows the proposition that exceedingly uniform and detailed EU media pluralism rules would be undesirable and disproportionate, as such rules must be adapted to the historic and cultural background of each Member State. Instead, the initiative strikes the right balance between generally couched provisions and more specific rules to reach the policy objectives. •Proportionality The initiative builds on existing legal frameworks and will only focus on areas where additional EU action appears necessary for the proper functioning of the internal media market, including to ensure a level playing field and independent operation of media market players across the EU. It is limited to issues on which Member States cannot achieve satisfactory solutions on their own, and provides for a well-calibrated harmonisation that does not go beyond what is necessary to achieve the objective of establishing a common framework for the proper functioning of the internal market for media services, while guaranteeing the quality of such services. The fact that several of the proposed rules are principle-based also contributes to ensuring the proposals’ proportionality. The proposal gives rise to limited compliance and enforcement costs that will likely be offset by significant benefits for media market players and citizens. By enhancing transparency and reducing regulatory fragmentation in the market, the proposal will enhance legal certainty and fair competition while reducing market distortions. This will increase investors’ confidence and make cross-border media market transactions less burdensome, creating a positive environment for investments and free provision of media services across the EU. Citizens and businesses will also benefit from a more diverse and plural media offer, increased transparency and improved access to information.

•Choice of the instrument The proposal takes the form of a regulation of the European Parliament and of the Council. In view of the issues to be addressed and given the economic, social and political context, a regulation is more suitable than a directive to ensure a consistent level of protection throughout the EU and reduce regulatory divergences that would hamper the independent provision of media services in the internal market. It will allow for a quick application of the new EU rules, thus addressing the problems faster. This will avoid a lengthy transposition process, prevent potential divergences or distortions during the transposition process, by stipulating directly applicable provisions and avoiding situations where Member States use the transposition process as a pretext to introduce or keep legislative measures that in substance run against independent media service providers or are otherwise discriminatory. The recourse to a regulation is also preferable given the initiative’s institutional component (the establishment of the Board). The choice of a regulation is equally justified by the increasing digitalisation and cross-border provision of media services, which calls for a swift, consistent approach across the internal market. By establishing directly applicable provisions, the proposed regulation will also ensure effective and efficient cooperation among national media regulatory authorities and bodies of the Member States. 3.RESULTS OF EX POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS •Stakeholder consultations The proposal is based on extensive consultation with stakeholders, in the light of the general principles and standards for consultation of interested parties by the Commission. A call for evidence announcing the initiative was published on 21 December 2021 and was open for feedback until 25 March 2022. A total of 1 473 responses were received. A public consultation was open from 10 January to 25 March 2022 and attracted 917 responses. They were both promoted through the Commission’s website, as well as through social media and specific networks. While the call for evidence aimed at gathering general feedback in response to the Commission’s announcement of the initiative, the public consultation collected views through a structured questionnaire containing specific questions regarding the initiative. In addition, the Commission organised meetings with key stakeholders and experts to gather additional evidence and data on the specific problems to be addressed by the initiative, the policy approach and its impact, as well as technical information about existing industry practices. It also conducted targeted workshops and analysed numerous position and analytical papers received in the context of the initiative’s preparation. The preparation of the impact assessment underpinning the initiative was supported by two external studies encompassing a series of individual consultations with key stakeholders. Furthermore, the Commission discussed the initiative with members of the AVMSD Contact Committee and ERGA. These expert groups provided a direct channel to consult the most relevant authorities at Member State level. To gather views of researchers and experts with particular expertise in relevant areas (such as public and constitutional law as well as media freedom and internal market), a specific workshop with representatives from academia, ERGA and the Commission was organised on 18 February 2022. The idea of a legislative proposal, regulating at least certain substantive areas, received support from citizens and most other stakeholders, including the media freedom community, consumer organisations, media regulators and ERGA, public and private broadcasters, content distributors and advertising ecosystem players. Among those stakeholders, there is wide support for a principle-based approach as opposed to no action or detailed standard-setting. Non-governmental organisations and public service broadcasters particularly supported EU-level action to introduce safeguards for editorial independence, including that of public service media, while recalling the importance of the Amsterdam Protocol. Public broadcasters specifically support safeguards for editorial integrity online and guidance on the appropriate prominence of audiovisual media services of general interest. Private broadcasters were especially in favour of common principles for media pluralism measures and audience measurement transparency, objectivity and verifiability, on the latter aspect agreeing with publishers and the advertising ecosystem players. Publishers, who are traditionally unregulated, expressed a general preference for self-regulation or a recommendation. However, they did support EU-wide measures both on protection of journalistic sources and on state advertising. Citizens strongly agreed with the need for transparency and fairness in the allocation of state advertising. Broadcasters and publishers called for effective regulation of online platforms. As regards governance, there is overall wide support for oversight based on ERGA but differing views as to its potential future status. Regulators and the media freedom community are in favour of strengthening ERGA, while companies and business associations would rather keep it in its current form. Public authorities supported in particular regulatory cooperation at EU level to facilitate common standards for media pluralism and the strengthening of the role and resources of ERGA for further EU coordination. •Collection and use of expertise The Commission has relied on a wide array of expertise for the preparation of this proposal. In addition to the public consultation and other stakeholder consultations described above, the Commission contracted two external studies to ensure a high level of coherence and comparability of analysis for all potential policy approaches. The European Audiovisual Observatory of the Council of Europe also produced a special report on governance and independence of public service media. The publication is accompanied by a comprehensive overview on the main governance safeguards for public service media in Europe. The Commission’s rule of law reports, the annual reports produced by the Media Pluralism Monitor as well as some Eurobarometer surveys provided evidence and analysis on many relevant issues. These sources were used to identify the problems, their scale in the internal media market and their drivers. The Commission has also built on the relevant Council of Europe Recommendations, which were agreed on by all Member States. Finally, to further support evidence-based analysis, the Commission conducted a review of relevant case law and an extensive literature review, covering academic literature and a wide spectrum of policy studies and reports, including by NGOs active in the area of media freedom and pluralism. •Impact assessment In line with its ‘Better Regulation’ policy, the Commission conducted an impact assessment for this proposal, examined by the Commission's Regulatory Scrutiny Board (RSB). The impact assessment report was first submitted to the RSB on 13 May, and was discussed with it during a hearing on 8 June. Following a negative opinion delivered on 10 June, the report was substantially revised and re-submitted to the RSB on 11 July. The RSB delivered a positive opinion with reservations on 27 July. The impact assessment report was further revised to accommodate the RSB’s suggestions for improvement. The opinions of the RSB, and the comments and explanations of how they have been taken into account, are presented in Annex 1 to the impact assessment.

The Commission examined different policy options to achieve the proposal’s general objective, which is to improve the functioning of the internal media market. Three policy options of different degrees of regulatory intensity were assessed: ·Option 1: Recommendation on media pluralism and independence, encouraging Member States and, in certain areas, companies in the media market to implement a set of actions to promote media pluralism, editorial independence and transparency and fairness in the media market. ·Option 2: Legislative proposal and recommendation on media independence, the former providing common rules for the internal market for media services and the latter encouraging media companies and Member States to foster media independence and transparency. ·Option 3: Enhanced legislative proposal adding on top of all the legislative elements of Option 2 further obligations for companies in the media market and regulators to foster the availability of quality media services and transparent and fair allocation of economic resources in the media market. Two sub-options were considered for the governance of the legislative instrument under options 2 and 3: ·Sub-option A: a governance system based on a board supported by a Commission secretariat; ·Sub-option B: a governance system based on a board assisted by an independent EU office. According to the Commission’s established methodology, each policy option was evaluated for economic, social and fundamental rights impacts. The preferred option is Option 2 Sub-option A. This option will meet the general objective of the intervention in an efficient, coherent, proportionate and largely effective way. In particular, the proposed legislative instrument will establish some core principles and rules for the media market, and assign important tasks to the Board, as the collective body of independent media regulators, including tasks to provide expert advice on regulatory, technical or practical aspects of media regulation, to issue opinions on market concentrations likely to affect the functioning of the internal market and to coordinate actions with regard to media service providers (including from third countries) not following EU media standards. It will be possible to rely on the principles and rules established in the legislative instrument before national courts, and the Commission will be able to launch infringements proceedings, inter alia in case of systemic issues. The non-binding element of the policy package - the Recommendation - will suggest voluntary actions on two specific issues: media independence safeguards and media ownership transparency. Such a multi-layered and flexible approach will bring the desired benefits while optimising the costs for media market players and public authorities, also taking into account the lower cost of a Commission secretariat compared to the EU office. The impacts of the policy options on different categories of stakeholders are explained in detail in Annex 3 to the impact assessment. •Fundamental rights The proposed regulation, by enhancing regulatory convergence in the internal media market, safeguarding editorial independence in conjunction with media service providers’ business freedom, and increasing transparency and fairness in the allocation of economic resources, will facilitate the provision of independent and quality media services across borders, hence promoting media freedom and pluralism. The key role of the Board in the new framework, fully independent from governments and any other public or private entities, will contribute to effective and impartial upholding of freedom of expression across the EU, protected by Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’), which corresponds to Article 10 of the European Convention on Human Rights. The proposed regulation will also have a positive impact on the freedom to conduct a business (Article 16 of the Charter), by lifting obstacles to the freedom to provide services and limiting the risks of certain media market players being subject to discriminatory treatment. 4.BUDGETARY IMPLICATIONS The budgetary impact of the proposal for this regulation will be covered by the allocations laid down in the 2021-2027 multiannual financial framework under the financial allocations for the Creative Europe programme, as detailed in the legislative financial statement accompanying the proposal. 5.OTHER ELEMENTS •Implementation plans and monitoring, evaluation and reporting arrangements The Commission will establish a comprehensive framework to continuously monitor the output, results and impact of this legislative instrument. This includes in particular a new independent monitoring mechanism to identify and assess risks to the functioning of the internal market for media services. An evaluation of the instrument and a report to the European Parliament, the Council and the European Economic and Social Committee are envisaged within 4 years from its entry into force and every 4 years thereafter. •Detailed explanation of the specific provisions of the proposal

Chapter I sets out the subject matter and scope of the Regulation and the definitions of key terms used in the Regulation. In particular, it states that Chapter II and Chapter III, Section 5 of the Regulation are minimum harmonisation provisions. Chapter II contains rights of recipients of media services and rights of media service providers in the internal market. It also sets out safeguards for the independent functioning of public service media and duties of media service providers in the internal market. Chapter III lays out a framework for regulatory cooperation and a well-functioning market for media services. Section 1 provides that the independent national regulatory authorities or bodies of the Member States that are in charge of implementation of the AVMSD are responsible for the application of this Chapter and grants them appropriate powers of investigation to carry out their tasks. Section 2 establishes the European Board for Media Services, the collective body of independent media regulators, replacing and succeeding the European Regulators Group for Audiovisual Media Services (ERGA). It sets out the requirements for the independence of the Board and specifies its structure. The Board will receive administrative and organisational support, required for carrying out its tasks, from a secretariat provided by the Commission. The Chapter lists the tasks of the Board under the Regulation. Section 3 establishes rules and procedures for regulatory cooperation and convergence in the internal media market, comprising a mechanism for structured cooperation, requests for enforcement measures, guidance on media regulation matters and coordination of measures concerning third-country media services. The provisions are intended to ensure a closer cooperation among national regulatory authorities and bodies in different areas of media regulation. Section 4 addresses specific issues concerning the provision of media services in a digital environment. Regarding the provision of media services on very large online platforms, it builds on existing horizontal legislation by providing additional safeguards for editorial integrity of content provided online by media service providers that adhere to certain regulatory or self-regulatory standards, and establishing a structured dialogue between very large online platforms and relevant media ecosystem counterparts. The Section also provides for the right of customization of audiovisual media offer in devices and user interfaces controlling access to audiovisual media services and the corresponding obligation of manufacturers and developers to technically enable such customisation. Section 5 sets out a legal framework for national measures affecting the operation of media service providers and lays down requirements for national rules and procedures related to the assessment of the impact of media market concentrations on media pluralism and editorial independence. The Board will be given the task of taking position on instances where the functioning of the internal market may be affected. Section 6 establishes requirements for audience measurement systems and methodologies deployed by relevant market players. The rules are accompanied by an encouragement to draw up codes of conduct and to foster exchanges of best practices. Section 6 also provides for common requirements on the allocation of state advertising expenditure to media service providers, without affecting the public procurement rules and the State aid rules. Chapter IV sets out final provisions, in particular concerning monitoring, evaluation and reporting. The Regulation includes a mechanism for the Commission to monitor risks to the functioning of the internal market for media services on a regular basis, in consultation with the Board. The Chapter also repeals the relevant Article of the AVMSD and specifies the entry into force and the start of application of the Regulation. 2022/0277 (COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a common framework for media services in the internal market (European Media Freedom Act) and amending Directive 2010/13/EU (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee, Having regard to the opinion of the Committee of the Regions, Acting in accordance with the ordinary legislative procedure, Whereas: (1)Independent media services play a unique role in the internal market. They represent a fast-changing and economically important sector and at the same time provide access to a plurality of views and reliable sources of information to citizens and businesses alike, thereby fulfilling the general interest function of ‘public watchdog’. Media services are increasingly available online and across borders while they are not subject to the same rules and the same level of protection in different Member States. (2)Given their unique role, the protection of media freedom and pluralism is an essential feature of a well-functioning internal market for media services (or ‘internal media market’). This market has substantially changed since the beginning of the new century, becoming increasingly digital and international. It offers many economic opportunities but also faces a number of challenges. The Union should help the media sector seize those opportunities within the internal market, while at the same time protecting the values, such as the protection of the fundamental rights, that are common to the Union and to its Member States. (3)In the digital media space, citizens and businesses access and consume media content, immediately available on their personal devices, increasingly in a cross-border setting. Global online platforms act as gateways to media content, with business models that tend to disintermediate access to media services and amplify polarising content and disinformation. These platforms are also essential providers of online advertising, which has diverted financial resources from the media sector, affecting its financial sustainability, and consequently the diversity of content on offer. As media services are knowledge- and capital-intensive, they require scale to remain competitive and to thrive in the internal market. To that effect, the possibility to offer services across borders and obtain investment including from or in other Member States is particularly important. (4)However, the internal market for media services is insufficiently integrated. A number of national restrictions hamper free movement within the internal market. In particular, different national rules and approaches related to media pluralism and editorial independence, insufficient cooperation between national regulatory authorities or bodies as well as opaque and unfair allocation of public and private economic resources make it difficult for media market players to operate and expand across borders and lead to an uneven level playing field across the Union. The integrity of the internal market for media services may also be challenged by providers that systematically engage in disinformation, including information manipulation and interference, and abuse the internal market freedoms, including by state-controlled media service providers financed by certain third countries. (5)Moreover, in response to challenges to media pluralism and media freedom online, some Member States have taken regulatory measures and other Member States are likely to do so, with a risk of furthering the divergence in national approaches and restrictions to free movement in the internal market. (6)Recipients of media services in the Union (natural persons who are nationals of Member States or benefit from rights conferred upon them by Union law and legal persons established in the Union) should be able to effectively enjoy the freedom to receive free and pluralistic media services in the internal market. In fostering the cross-border flow of media services, a minimum level of protection of service recipients should be ensured in the internal market. That would be in compliance with the right to receive and impart information pursuant to Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’). It is thus necessary to harmonise certain aspects of national rules related to media services. In the final report of the Conference on the Future of Europe, citizens called on the EU to further promote media independence and pluralism, in particular by introducing legislation addressing threats to media independence through EU-wide minimum standards. (7)For the purposes of this Regulation, the definition of a media service should be limited to services as defined by the Treaty and therefore should cover any form of economic activity. This definition should exclude user-generated content uploaded to an online platform unless it constitutes a professional activity normally provided for consideration (be it of financial or of other nature). It should also exclude purely private correspondence, such as e-mails, as well as all services that do not have the provision of audiovisual or audio programmes or press publications as their principal purpose, meaning where the content is merely incidental to the service and not its principal purpose, such as advertisements or information related to a product or a service provided by websites that do not offer media services. The definition of a media service should cover in particular television or radio broadcasts, on-demand audiovisual media services, audio podcasts or press publications. Corporate communication and distribution of informational or promotional materials for public or private entities should be excluded from the scope of this definition. (8)In the digitalised media market, providers of video-sharing platforms or very large online platforms may fall under the definition of media service provider. In general, such providers play a key role in the content organisation, including by automated means or algorithms, but do not exercise editorial responsibility over the content to which they provide access. However, in the increasingly convergent media environment, some providers of video-sharing platforms or very large online platforms have started to exercise editorial control over a section or sections of their services. Therefore, such an entity could be qualified both as a video-sharing platform provider or a very large online platform provider and as a media service provider. (9)The definition of audience measurement should cover measurement systems developed as agreed by industry standards within self-regulatory organisations, like the Joint Industry Committees, and measurement systems developed outside such self-regulatory approaches. The latter tend to be deployed by certain online players who self-measure or provide their proprietary audience measurement systems to the market, which do not necessarily abide by the commonly agreed industry standards. Given the significant impact that such audience measurement systems have on the advertising and media markets, they should be covered by this Regulation. (10)State advertising should be understood broadly as covering promotional or self-promotional activities undertaken by, for or on behalf of a wide range of public authorities or entities, including governments, regulatory authorities or bodies as well as state-owned enterprises or other state-controlled entities in different sectors, at national or regional level, or local governments of territorial entities of more than 1 million inhabitants. However, the definition of state advertising should not include emergency messages by public authorities which are necessary, for example, in cases of natural or sanitary disasters, accidents or other sudden incidents that can cause harm to individuals. (11)In order to ensure that society reaps the benefits of the internal media market, it is essential not only to guarantee the fundamental freedoms under the Treaty, but also the legal certainty which the recipients of media services need for the enjoyment of the corresponding benefits. Such recipients should have access to quality media services, which have been produced by journalists and editors in an independent manner and in line with journalistic standards and hence provide trustworthy information, including news and current affairs content. Such right does not entail any correspondent obligation on any given media service provider to adhere to standards not set out explicitly by law. Such quality media services are also an antidote against disinformation, including foreign information manipulation and interference. (12)This Regulation does not affect the freedom of expression guaranteed to individuals under the Charter. The European Court of Human Rights has observed that in such a sensitive sector as audiovisual media, in addition to its negative duty of non-interference, the public powers have a positive obligation to put in place an appropriate legislative and administrative framework to guarantee effective pluralism. (13)The free flow of trustworthy information is essential in a well-functioning internal market for media services. Therefore, the provision of media services should not be subject to any restrictions contrary to this Regulation or other rules of Union law, such as Directive 2010/13/EU of the European Parliament and of the Council providing for measures necessary to protect users from illegal and harmful content. Restrictions could also derive from measures applied by national public authorities in compliance with Union law. (14)The protection of editorial independence is a precondition for exercising the activity of media service providers and their professional integrity. Editorial independence is especially important for media service providers providing news and current affairs content given its societal role as a public good. Media service providers should be able to exercise their economic activities freely in the internal market and compete on equal footing in an increasingly online environment where information flows across borders. (15)Member States have taken different approaches to the protection of editorial independence, which is increasingly challenged across the Union. In particular, there is growing interference with editorial decisions of media service providers in several Member States. Such interference can be direct or indirect, from the State or other actors, including public authorities, elected officials, government officials and politicians, for example to obtain a political advantage. Shareholders and other private parties who have a stake in media service providers may act in ways which go beyond the necessary balance between their own business freedom and freedom of expression, on the one hand, and editorial freedom of expression and the information rights of users, on the other hand, in pursuit of economic or other advantage. Moreover, recent trends in media distribution and consumption, including in particular in the online environment, have prompted Member States to consider laws aimed at regulating the provision of media content. Approaches taken by media service providers to guarantee editorial independence also vary. As a result of such interference and fragmentation of regulation and approaches, the conditions for the exercise of economic activities by media service providers and, ultimately, the quality of media services received by citizens and businesses are negatively affected in the internal market. It is thus necessary to put in place effective safeguards enabling the exercise of editorial freedom across the Union so that media service providers can independently produce and distribute their content across borders and service recipients can receive such content. (16)Journalists and editors are the main actors in the production and provision of trustworthy media content, in particular by reporting on news or current affairs. It is essential therefore to protect journalists’ capability to collect, fact-check and analyse information, including information imparted confidentially. In particular, media service providers and journalists (including those operating in non-standard forms of employment, such as freelancers) should be able to rely on a robust protection of journalistic sources and communications, including against deployment of surveillance technologies, since without such protection sources may be deterred from assisting the media in informing the public on matters of public interest. As a result, journalists’ freedom to exercise their economic activity and fulfil their vital ‘public watchdog’ role may be undermined, thus affecting negatively access to quality media services. The protection of journalistic sources contributes to the protection of the fundamental right enshrined in Article 11 of the Charter.

(17)The protection of journalistic sources is currently regulated heterogeneously in the Member States. Some Member States provide an absolute protection against coercing journalists to disclose information that identify their source in criminal and administrative proceedings. Other Member States provide a qualified protection confined to judicial proceedings based on certain criminal charges, while others provide protection in the form of a general principle. This leads to fragmentation in the internal media market. As a result, journalists, which work increasingly on cross-border projects and provide their services to cross-border audiences, and by extension providers of media services, are likely to face barriers, legal uncertainty and uneven conditions of competition. Therefore, the protection of journalistic sources and communications needs harmonisation and further strengthening at Union level. (18)Public service media established by the Member States play a particular role in the internal media market, by ensuring that citizens and businesses have access to quality information and impartial media coverage, as part of their mission. However, public service media can be particularly exposed to the risk of interference, given their institutional proximity to the State and the public funding they receive. This risk may be exacerbated by uneven safeguards related to independent governance and balanced coverage by public service media across the Union. This situation may lead to biased or partial media coverage, distort competition in the internal media market and negatively affect access to independent and impartial media services. It is thus necessary, building on the international standards developed by the Council of Europe in this regard, to put in place legal safeguards for the independent functioning of public service media across the Union. It is also necessary to guarantee that, without prejudice to the application of the Union’s State aid rules, public service media providers benefit from sufficient and stable funding to fulfil their mission that enables predictability in their planning. Preferably, such funding should be decided and appropriated on a multi-year basis, in line with the public service mission of public service media providers, to avoid potential for undue influence from yearly budget negotiations. The requirements laid down in this Regulation do not affect the competence of Member States to provide for the funding of public service media as enshrined in Protocol 29 on the system of public broadcasting in the Member States, annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union. (19)It is crucial for the recipients of media services to know with certainty who owns and is behind the news media so that they can identify and understand potential conflicts of interest which is a prerequisite for forming well-informed opinions and consequently to actively participate in a democracy. Such transparency is also an effective tool to limit risks of interference with editorial independence. It is thus necessary to introduce common information requirements for all relevant media service providers across the Union that should include proportionate requirements to disclose ownership information. In this context, the measures taken by Member States under Article 30(9) of Directive (EU) 2015/849 should not be affected. The required information should be disclosed by the relevant providers on their websites or other medium that is easily and directly accessible. (20)Media integrity also requires a proactive approach to promote editorial independence by news media companies, in particular through internal safeguards. Media service providers should adopt proportionate measures to guarantee, once the overall editorial line has been agreed between their owners and editors, the freedom of the editors to take individual decisions in the course of their professional activity. The objective to shield editors from undue interference in their decisions taken on specific pieces of content as part of their everyday work contributes to ensuring a level playing field in the internal market for media services and the quality of such services. That objective is also in conformity with the fundamental right to receive and impart information under Article 11 of the Charter. In view of these considerations, media service providers should also ensure transparency of actual or potential conflicts of interest to their service recipients. (21)To mitigate regulatory burdens, micro enterprises within the meaning of Article 3 of Directive 2013/34/EU of the European Parliament and of the Council should be exempted from the requirements related to information and internal safeguards with a view to guaranteeing the independence of individual editorial decisions. Moreover, media service providers should be free to tailor the internal safeguards to their needs, in particular if they are small and medium-sized enterprises within the meaning of that Article. The Recommendation that accompanies this Regulation provides a catalogue of voluntary internal safeguards that can be adopted within media companies in this regard. The present Regulation should not be construed to the effect of depriving the owners of private media service providers of their prerogative to set strategic or general goals and to foster the growth and financial viability of their undertakings. In this respect, this Regulation recognises that the goal of fostering editorial independence needs to be reconciled with the legitimate rights and interests of private media owners. (22)Independent national regulatory authorities or bodies are key for the proper application of media law across the Union. National regulatory authorities or bodies referred to in Article 30 of Directive 2010/13/EU are best placed to ensure the correct application of the requirements related to regulatory cooperation and a well-functioning market for media services, envisaged in Chapter III of this Regulation. In order to ensure a consistent application of this Regulation and other Union media law, it is necessary to set up an independent advisory body at Union level gathering such authorities or bodies and coordinating their actions. The European Regulators Group for Audiovisual Media Services (ERGA), established by Directive 2010/13/EU, has been essential in promoting the consistent implementation of that Directive. The European Board for Media Services (‘the Board’) should therefore build on ERGA and replace it. This requires a targeted amendment of Directive 2010/13/EU to delete its Article 30b, which establishes ERGA, and to replace references to ERGA and its tasks as a consequence. The amendment of Directive 2010/13/EU by this Regulation is justified in this case as it is limited to a provision which does not need to be transposed by Member States and is addressed to the institutions of the Union. (23)The Board should bring together senior representatives of the national regulatory authorities or bodies referred to in Article 30 of Directive 2010/13/EU, appointed by such authorities or bodies. In cases where Member States have several relevant regulatory authorities or bodies, including at regional level, a joint representative should be chosen through appropriate procedures and the voting right should remain limited to one representative per Member State. This should not affect the possibility for the other national regulatory authorities or bodies to participate, as appropriate, in the meetings of the Board. The Board should also have the possibility to invite to attend its meetings, in agreement with the Commission, experts and observers, including in particular regulatory authorities or bodies from candidate countries, potential candidate countries, EEA countries, or ad hoc delegates from other competent national authorities. Due to the sensitivity of the media sector and following the practice of ERGA decisions in accordance with its rules of procedure, the Board should adopt its decisions on the basis of a two-thirds majority of the votes. (24)Without prejudice to the powers granted to the Commission by the Treaties, it is essential that the Commission and the Board work and cooperate closely. In particular, the Board should actively support the Commission in its tasks of ensuring the consistent application of this Regulation and of the national rules implementing Directive 2010/13/EU. For that purpose, the Board should in particular advise and assist the Commission on regulatory, technical or practical aspects pertinent to the application of Union law, promote cooperation and the effective exchange of information, experience and best practices and draw up opinions in agreement with the Commission or upon its request in the cases envisaged by this Regulation. In order to effectively fulfil its tasks, the Board should be able to rely on the expertise and human resources of a secretariat provided by the Commission. The Commission secretariat should provide administrative and organisational support to the Board, and help the Board in carrying out its tasks. (25)Regulatory cooperation between independent media regulatory authorities or bodies is essential to make the internal market for media services function properly. However, Directive 2010/13/EU does not provide for a structured cooperation framework for national regulatory authorities or bodies. Since the revision of the EU framework for audiovisual media services by Directive 2018/1808/EU of the European Parliament and of the Council, which extended its scope to video-sharing platforms, there has been an ever-increasing need for close cooperation among national regulatory authorities or bodies, in particular to resolve cross-border cases. Such a need is also justified in view of the new challenges in the EU media environment that this Regulation seeks to address, including by entrusting national regulatory authorities or bodies with new tasks. (26)To ensure the effective enforcement of Union media law, to prevent the possible circumvention of the applicable media rules by rogue media service providers and to avoid the raising of additional barriers in the internal market for media services, it is essential to provide for a clear, legally binding framework for national regulatory authorities or bodies to cooperate effectively and efficiently. (27)Due to the pan-European nature of video-sharing platforms, national regulatory authorities or bodies need to have a dedicated tool to protect viewers of video-sharing platform services from certain illegal and harmful content, including commercial communications. In particular, a mechanism is needed to allow any relevant national regulatory authority or body to request its peers to take necessary and proportionate actions to ensure enforcement of obligations under this Article by video-sharing platform providers. In case the use of such mechanism does not lead to an amicable solution, the freedom to provide information society services from another Member State can only be restricted if the conditions set out in Article 3 of Directive 2000/31/EC of the European Parliament and of the Council are met and following the procedure set out therein. (28)Ensuring a consistent regulatory practice regarding this Regulation and Directive 2010/13/EU is essential. For this purpose, and to contribute to ensuring a convergent implementation of EU media law, the Commission may issue guidelines on matters covered by both this Regulation and Directive 2010/13/EU when needed. When deciding to issue guidelines, the Commission should consider in particular regulatory issues affecting a significant number of Member States or those with a cross-border element. This is the case in particular for national measures taken under Article 7a of Directive 2010/13/EU on the appropriate prominence of audiovisual media services of general interest. In view of the abundance of information and the increasing use of digital means to access the media, it is important to ensure prominence for content of general interest, in order to help achieving a level playing field in the internal market and compliance with the fundamental right to receive information under Article 11 of the Charter of Fundamental Rights of the Union. Given the possible impact of the national measures taken under Article 7a on the functioning of the internal media market, guidelines by the Commission would be important to achieve legal certainty in this field. It would also be useful to provide guidance on national measures taken under Article 5(2) of Directive 2010/13/EU with a view to ensuring the public availability of accessible, accurate and up-to-date information related to media ownership. In the process of preparing its guidelines, the Commission should be assisted by the Board. The Board should in particular share with the Commission its regulatory, technical and practical expertise regarding the areas and topics covered by the respective guidelines. (29)In order to ensure a level playing field in the provision of diverse audiovisual media services in the face of technological developments in the internal market, it is necessary to find common technical prescriptions for devices controlling or managing access to and use of audiovisual media services or carrying digital signals conveying the audiovisual content from source to destination. In this context, it is important to avoid diverging technical standards creating barriers and additional costs for the industry and consumers while encouraging solutions to implement existing obligations concerning audiovisual media services. (30)Regulatory authorities or bodies referred to in Article 30 of Directive 2010/13/EU have specific practical expertise that allows them to effectively balance the interests of the providers and recipients of media services while ensuring the respect for the freedom of expression. This is key in particular when it comes to protecting the internal market from activities of media service providers established outside the Union that target audiences in the Union where, inter alia in view of the control that may be exercised by third countries over them, they may prejudice or pose risks of prejudice to public security and defence. In this regard, the coordination between national regulatory authorities or bodies to face together possible public security and defence threats stemming from such media services needs to be strengthened and given a legal framework to ensure the effectiveness and possible coordination of the national measures adopted in line with Union media legislation. In order to ensure that media services suspended in certain Member States under Article 3(3) and 3(5) of Directive 2010/13/EU do not continue to be provided via satellite or other means in those Member States, a mechanism of accelerated mutual cooperation and assistance should also be available to guarantee the ‘effet utile’ of the relevant national measures, in compliance with Union law. Additionally, it is necessary to coordinate the national measures that may be adopted to counter public security and defence threats by media services established outside of the Union and targeting audiences in the Union, including the possibility for the Board, in agreement with the Commission, to issue opinions on such measures, as appropriate. In this regard, risks to public security and defence need to be assessed with a view to all relevant factual and legal elements, at national and European level. This is without prejudice to the competence of the Union under Article 215 of the Treaty on the Functioning of the European Union. (31)Very large online platforms act for many users as a gateway for access to media services. Media service providers who exercise editorial responsibility over their content play an important role in the distribution of information and in the exercise of freedom of information online. When exercising such editorial responsibility, they are expected to act diligently and provide information that is trustworthy and respectful of fundamental rights, in line with the regulatory or self-regulatory requirements they are subject to in the Member States. Therefore, also in view of users’ freedom of information, where providers of very large online platforms consider that content provided by such media service providers is incompatible with their terms and conditions, while it is not contributing to a systemic risk referred to in Article 26 of Regulation (EU) 2022/XXX [the Digital Services Act], they should duly consider freedom and pluralism of media, in accordance with Regulation (EU) 2022/XXX [the Digital Services Act] and provide, as early as possible, the necessary explanations to media service providers as their business users in the statement of reasons under Regulation (EU) 2019/1150 of the European Parliament and of the Council. To minimise the impact of any restriction to that content on users’ freedom of information, very large online platforms should endeavour to submit the statement of reasons prior to the restriction taking effect without prejudice to their obligations under Regulation (EU) 2022/XXX [the Digital Services Act]. In particular, this Regulation should not prevent a provider of a very large online platform to take expeditious measures either against illegal content disseminated through its service, or in order to mitigate systemic risks posed by dissemination of certain content through its service, in compliance with Union law, in particular pursuant to Regulation (EU) 2022/XXX [the Digital Services Act]. (32)It is furthermore justified, in view of an expected positive impact on freedom to provide services and freedom of expression, that where media service providers adhere to certain regulatory or self-regulatory standards, their complaints against decisions of providers of very large online platforms are treated with priority and without undue delay. (33)To this end, providers of very large online platforms should provide a functionality on their online interface to enable media service providers to declare that they meet certain requirements, while at the same time retaining the possibility not to accept such self-declaration where they consider that these conditions are not met. Providers of very large online platforms may rely on information regarding adherence to these requirements, such as the machine-readable standard of the Journalism Trust Initiative or other relevant codes of conduct. Guidelines by the Commission may be useful to facilitate an effective implementation of such functionality, including on modalities of involvement of relevant civil society organisations in the review of the declarations, on consultation of the regulator of the country of establishment, where relevant, and address any potential abuse of the functionality. (34)This Regulation recognises the importance of self-regulatory mechanisms in the context of the provision of media services on very large online platforms. They represent a type of voluntary initiatives, for instance in a form of codes of conduct, which enable media service providers or their representatives to adopt common guidelines, including on ethical standards, correction of errors or complaint handling, amongst themselves and for themselves. Robust, inclusive and widely-recognised media self-regulation represents an effective guarantee of quality and professionalism of media services and is key for safeguarding editorial integrity. (35)Providers of very large online platforms should engage with media service providers that respect standards of credibility and transparency and that consider that restrictions on their content are frequently imposed by providers of very large online platforms without sufficient grounds, in order to find an amicable solution for terminating any unjustified restrictions and avoiding them in the future. Providers of very large online platforms should engage in such exchanges in good faith, paying particular attention to safeguarding media freedom and freedom of information. (36)Building on the useful role played by ERGA in monitoring compliance by the signatories of EU Code of Practice on Disinformation, the Board should, at least on a yearly basis, organise a structured dialogue between providers of very large online platforms, representatives of media service providers and representatives of civil society to foster access to diverse offers of independent media on very large online platforms, discuss experience and best practices related to the application of the relevant provisions of this Regulation and to monitor adherence to self-regulatory initiatives aimed at protecting society from harmful content, including those aimed at countering disinformation. The Commission may, where relevant, examine the reports on the results of such structured dialogues when assessing systemic and emerging issues across the Union under Regulation (EU) 2022/XXX [Digital Services Act] and may ask the Board to support it to this effect.

(37)Recipients of audiovisual media services should be able to effectively choose the audiovisual content they want to watch according to their preferences. Their freedom in this area may however be constrained by commercial practices in the media sector, namely agreements for content prioritisation between manufacturers of devices or providers of user interfaces controlling or managing access to and use of audiovisual media services, such as connected televisions, and media service providers. Prioritisation can be implemented, for example, on the home screen of a device, through hardware or software shortcuts, applications and search areas, which have implications on the recipients’ viewing behaviour, who may be unduly incentivised to choose certain audiovisual media offers over others. Service recipients should have the possibility to change, in a simple and user-friendly manner, the default settings of a device or user interface controlling and managing access to, and use of, audiovisual media services, without prejudice to measures to ensure the appropriate prominence of audiovisual media services of general interest implementing Article 7a of Directive 2010/13/EC, taken in the pursuit of legitimate public policy considerations. (38)Different legislative, regulatory or administrative measures can negatively affect the operation of media service providers in the internal market. They include, for example, rules to limit the ownership of media companies by other companies active in the media sector or non-media related sectors; they also include decisions related to licensing, authorisation or prior notification for media service providers. In order to mitigate their potential negative impact on the functioning of the internal market for media services and enhance legal certainty, it is important that such measures comply with the principles of objective justification, transparency, non-discrimination and proportionality. (39)It is also key that the Board is empowered to issue an opinion, on the Commission’s request, where national measures are likely to affect the functioning of the internal market for media services. This is, for example, the case when a national administrative measure is addressed to a media service provider providing its services towards more than one Member State, or when the concerned media service provider has a significant influence on the formation of public opinion in that Member State. (40)Media play a decisive role in shaping public opinion and helping citizens participate in democratic processes. This is why Member States should provide for rules and procedures in their legal systems to ensure assessment of media market concentrations that could have a significant impact on media pluralism or editorial independence. Such rules and procedures can have an impact on the freedom to provide media services in the internal market and need to be properly framed and be transparent, objective, proportionate and non-discriminatory. Media market concentrations subject to such rules should be understood as covering those which could result in a single entity controlling or having significant interests in media services which have substantial influence on the formation of public opinion in a given media market, within a media sub-sector or across different media sectors in one or more Member States. An important criterion to be taken into account is the reduction of competing views within that market as a result of the concentration. (41)National regulatory authorities or bodies, who have specific expertise in the area of media pluralism, should be involved in the assessment of the impact of media market concentrations on media pluralism and editorial independence where they are not the designated authorities or bodies themselves. In order to foster legal certainty and ensure that the rules and procedures are genuinely geared at protecting media pluralism and editorial independence, it is essential that objective, non-discriminatory and proportionate criteria for notifying and assessing the impact of media market concentrations on media pluralism and editorial independence are set out in advance. (42)When a media market concentration constitutes a concentration falling within the scope of Council Regulation (EC) No 139/2004, the application of this Regulation or of any rules and procedures adopted by Member States on the basis of this Regulation should not affect the application of Article 21(4) of Regulation (EC) No 139/2004. Any measures taken by the designated or involved national regulatory authorities or bodies based on their assessment of the impact of media market concentrations on media pluralism and editorial independence should therefore be aimed at protecting legitimate interests within the meaning of Article 21(4), third subparagraph, of Regulation (EC) No 139/2004, and should be in line with the general principles and other provisions of Union law. (43)The Board should be empowered to provide opinions on draft decisions or opinions by the designated or involved national regulatory authorities or bodies, where the notifiable concentrations may affect the functioning of the internal media market. This would be the case, for example, where such concentrations involve at least one undertaking established in another Member State or operating in more than one Member State or result in media service providers having a significant influence on formation of public opinion in a given media market. Moreover, where the concentration has not been assessed for its impact on media pluralism and editorial independence by the relevant national authorities or bodies, or where the national regulatory authorities or bodies have not consulted the Board regarding a given media market concentration, but that media market concentration is considered likely to affect the functioning of the internal market for media services, the Board should be able to provide an opinion, upon request of the Commission. In any event, the Commission retains the possibility to issue its own opinions following the opinions drawn up by the Board. (44)With a view to ensuring pluralistic media markets, the national authorities or bodies and the Board should take account of a set of criteria. In particular, impact on media pluralism should be considered, including notably the effect on the formation of public opinion, taking into account of the online environment. Concurrently, it should be considered whether other media outlets, providing different and alternative content, would still coexist in the given market(s) after the media market concentration in question. Assessment of safeguards for editorial independence should include the examination of potential risks of undue interference by the prospective owner, management or governance structure in the individual editorial decisions of the acquired or merged entity. The existing or envisaged internal safeguards aimed at preserving independence of the individual editorial decisions within the media undertakings involved should also be taken into account. In assessing the potential impacts, the effects of the concentration in question on the economic sustainability of the entity or entities subject to the concentration should also be considered and whether, in the absence of the concentration, they would be economically sustainable, in the sense that they would be able in the medium term to continue to provide and further develop financially viable, adequately resourced and technologically adapted quality media services in the market. (45)Audience measurement has a direct impact on the allocation and the prices of advertising, which represents a key revenue source for the media sector. It is a crucial tool to evaluate the performance of media content and understand the preferences of audiences in order to plan the future production of content. Accordingly, media market players, in particular media service providers and advertisers, should be able to rely on objective audience data stemming from transparent, unbiased and verifiable audience measurement solutions. However, certain new players that have emerged in the media ecosystem provide their own measurement services without making available information on their methodologies. This could result in information asymmetries among media market players and in potential market distortions, to the detriment of equality of opportunities for media service providers in the market. (46)In order to enhance the verifiability and reliability of audience measurement methodologies, in particular online, transparency obligations should be laid down for providers of audience measurement systems that do not abide by the industry benchmarks agreed within the relevant self-regulatory bodies. Under these obligations, such actors, when requested and to the extent possible, should provide advertisers and media service providers or parties acting on their behalf, with information describing the methodologies employed for the measurement of the audience. Such information could consist in providing elements, such as the size of the sample measured, the definition of the indicators that are measured, the metrics, the measurement methods and the margin of error as well as the measurement period. The obligations imposed under this Regulation are without prejudice to any obligations that apply to providers of audience measurement services under Regulation 2019/1150 or Regulation (EU) 2022/XX [Digital Markets Act], including those concerning ranking or self-preferencing. (47)Codes of conduct, drawn up either by the providers of audience measurement systems or by organisations or associations representing them, can contribute to the effective application of this Regulation and should, therefore, be encouraged. Self-regulation has already been used to foster high quality standards in the area of audience measurement. Its further development could be seen as an effective tool for the industry to agree on the practical solutions needed for ensuring compliance of audience measurement systems and their methodologies with the principles of transparency, impartiality, inclusiveness, proportionality, non-discrimination and verifiability. When drawing up such codes of conduct, in consultation with all relevant stakeholders and notably media service providers, account could be taken in particular of the increasing digitalisation of the media sector and the objective of achieving a level playing field among media market players. (48)State advertising is an important source of revenue for many media service providers, contributing to their economic sustainability. Access to it must be granted in a non-discriminatory way to any media service provider from any Member State which can adequately reach some or all of the relevant members of the public, in order to ensure equal opportunities in the internal market. Moreover, State advertising may make media service providers vulnerable to undue state influence to the detriment of the freedom to provide services and fundamental rights. Opaque and biased allocation of state advertising is therefore a powerful tool to exert influence or ‘capture’ media service providers. The distribution and transparency of state advertising are in some regards regulated through a fragmented framework of media-specific measures and general public procurement laws, which, however, may not cover all state advertising expenditure nor offer sufficient protection against preferential or biased distribution. In particular, Directive 2014/24/EU of the European Parliament and of the Council does not apply to public service contracts for the acquisition, development, production or co-production of programme material intended for audiovisual media services or radio media services. Media-specific rules on state advertising, where they exist, diverge significantly from one Member State to another. (49)In order to ensure undistorted competition between media service providers and to avoid the risk of covert subsidies and of undue political influence on the media, it is necessary to establish common requirements of transparency, objectivity, proportionality and non-discrimination in the allocation of state advertising and of state resources to media service providers for the purpose of purchasing goods or services from them other than state advertising, including the requirement to publish information on the beneficiaries of state advertising expenditure and the amounts spent. It is important that Member States make the necessary information related to state advertising publicly accessible in an electronic format that is easy to view, access and download, in compliance with Union and national rules on commercial confidentiality. This Regulation shall not affect the application of the State aid rules, which are applied on a case-by-case basis. (50)Risks to the functioning and resilience of the internal media market should be regularly monitored as part of the efforts to improve the functioning of the internal market for media services. Such monitoring should aim at providing detailed data and qualitative assessments on the resilience of the internal market for media services, including as regards the degree of concentration of the market at national and regional level and risks of foreign information manipulation and interference. It should be conducted independently, on the basis of a robust list of key performance indicators, developed and regularly updated by the Commission, in consultation with the Board. Given the rapidly evolving nature of risks and technological developments in the internal media market, the monitoring should include forward-looking exercises such as stress tests to assess the prospective resilience of the internal media market, to alert about vulnerabilities around media pluralism and editorial independence, and to help efforts to improve governance, data quality and risk management. In particular, the level of cross-border activity and investment, regulatory cooperation and convergence in media regulation, obstacles to the provision of media services, including in a digital environment, as well as transparency and fairness of allocation of economic resources in the internal media market should be covered by the monitoring. It should also consider broader trends in the internal media market and national media markets as well as national legislation affecting media service providers. In addition, the monitoring should provide an overview of measures taken by media service providers with a view to guaranteeing the independence of individual editorial decisions, including those proposed in the accompanying Recommendation. In order to ensure the highest standards of such monitoring, the Board, as it gathers entities with a specialised media market expertise, should be duly involved. (51)To prepare the ground for a correct implementation of this Regulation, its provisions concerning independent media authorities, the Board and the required amendments to Directive 2010/13/EU (Articles 7 to 12 and 27 of this Regulation) should apply 3 months after the entry into force of the Act, while all other provisions of this Regulation will apply 6 months after the entry into force of this Regulation. In particular, this is needed to ensure that the Board will be established in time to ensure a successful implementation of the Regulation. (52)Since the objectives of this Regulation, namely ensuring the proper functioning of the internal market for media services, cannot be sufficiently achieved by the Member States, because they cannot or might not have incentives to achieve the necessary harmonisation and cooperation acting alone, but can rather, by reasons of the increasingly digital and cross-border production, distribution and consumption of media content as well as the unique role of media services, be better achieved at the Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives. (53)This Regulation respects the fundamental rights and observes the principles recognised in particular by the Charter, in particular Articles 7, 8, 11, 16, 47, 50 and 52 thereof. Accordingly, this Regulation should be interpreted and applied with due respect to those rights and principles. In particular, nothing in this Regulation should be interpreted as interfering with freedom of information or freedom of the press, or incentivising Member States to introduce requirements for editorial content of press publications. (54)The European Data Protection Supervisor was consulted in accordance with Article 42(1) of Regulation (EU) 2018/1725 of the European Parliament and of the Council and delivered an opinion on XX XX 2022. HAVE ADOPTED THIS REGULATION:

Chapter I

General Provisions Article 1

Subject matter and scope 1.This Regulation lays down common rules for the proper functioning of the internal market for media services, including the establishment of the European Board for Media Services, while preserving the quality of media services. 2.This Regulation shall not affect rules laid down by: (a)Directive 2000/31/EC; (b)Directive 2019/790/EU; (c)Regulation 2019/1150; (d)Regulation (EU) 2022/XXX [the Digital Services Act]; (e)Regulation (EU) 2022/XXX [the Digital Markets Act]; (f)Regulation (EU) 2022/XXX [Regulation on the transparency and targeting of political advertising]. 3.This Regulation shall not affect the possibility for Member States to adopt more detailed rules in the fields covered by Chapter II and Section 5 of Chapter III, provided that those rules comply with Union law. Article 2 Definitions For the purposes of this Regulation, the following definitions shall apply: ‘media service’ means a service as defined by Articles 56 and 57 of the Treaty, where the principal purpose of the service or a dissociable section thereof consists in providing programmes or press publications to the general public, by any means, in order to inform, entertain or educate, under the editorial responsibility of a media service provider; ‘media service provider’ means a natural or legal person whose professional activity is to provide a media service and who has editorial responsibility for the choice of the content of the media service and determines the manner in which it is organised; ‘public service media provider’ means a media service provider which is entrusted with a public service mission under national law or receives national public funding for the fulfilment of such a mission; ‘programme’ means a set of moving images or sounds constituting an individual item, irrespective of its length, within a schedule or a catalogue established by a media service provider;

‘press publication’ means a publication as defined in Article 2(4) of Directive 2019/790/EU; ‘audiovisual media service’ means a service as defined in Article 1(1), point (a), of Directive 2010/13/EU; ‘editor’ means a natural person or a number of natural persons possibly grouped in a body, regardless of its legal form, status and composition, that takes or supervises editorial decisions within a media service provider; ‘editorial decision’ means a decision taken on a regular basis for the purpose of exercising editorial responsibility and linked to the day-to-day operation of a media service provider; ‘editorial responsibility’ means the exercise of effective control both over the selection of the programmes or press publications and over their organisation, for the purposes of the provision of a media service, regardless of the existence of liability under national law for the service provided; ‘provider of very large online platform’ means a provider of an online platform that has been designated as a very large online platform pursuant to Article 25(4) of Regulation (EU) 2022/XXX [Digital Services Act]; ‘video-sharing platform service’ means a service as defined in Article 1(1), point (aa), of Directive 2010/13/EU; ‘national regulatory authority or body’ means the authority or body designated by Member States pursuant to Article 30 of Directive 2010/13/EU; ‘media market concentration’ means a concentration as defined in Article 3 of Regulation (EC) No 139/2004 involving at least one media service provider; ‘audience measurement’ means the activity of collecting, interpreting or otherwise processing data about the number and characteristics of users of media services for the purposes of decisions regarding advertising allocation or prices or the related planning, production or distribution of content; ‘State advertising’ means the placement, publication or dissemination, in any media service, of a promotional or self-promotional message, normally in return for payment or for any other consideration, by, for or on behalf of any national or regional public authority, such as national, federal or regional governments, regulatory authorities or bodies as well as state-owned enterprises or other state-controlled entities at the national or regional level, or any local government of a territorial entity of more than 1 million inhabitants; ‘spyware’ means any product with digital elements specially designed to exploit vulnerabilities in other products with digital elements that enables the covert surveillance of natural or legal persons by monitoring, extracting, collecting or analysing data from such products or from the natural or legal persons using such products, in particular by secretly recording calls or otherwise using the microphone of an end-user device, filming natural persons, machines or their surroundings, copying messages, photographing, tracking browsing activity, tracking geolocation, collecting other sensor data or tracking activities across multiple e