Online platforms with a significant societal and economic impact by covering, among their monthly users, at least 10% of the EU population (approximately 45 million users).

Any advertising funds for media by national, federal, regional and local governments, regulatory authorities or bodies, fully or partially state-owned enterprises and other state-controlled entities, functioning at national, federal and local level.

Small and medium-sized enterprise, i.e. an enterprise that satisfies the criteria laid down in Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.05.2003, p. 36): employs fewer than 250 persons, has an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million.

Providers of hosting services which, at the request of a recipient of the service, stores and disseminates information to the public.

The natural or legal person who has editorial responsibility for the choice of the content of the media service and determines the manner in which it is organised.

Media pluralism encompasses a plurality of voices or opinions expressed and issues analysed in the media (diversity in the range of content available – internal pluralism), and a plurality of media outlets and their types - print, radio, television or online - (diversity of ownership and sources – external pluralism).

European Audiovisual Observatory, which focuses on collection, preparation and distribution of economic and legal information on the film, linear TV and VOD sectors in Europe.

European Regulators Group for Audiovisual Services, which brings together heads or high-level representatives of national independent regulatory bodies in the field of audiovisual services, to advise the Commission on the implementation of the EU’s Audiovisual Media Services Directive.

Freedom of editors to make decisions without public or private interference (e.g. by politicians or owners/management of the media in question).

Proposal for a Regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act) [COM/2020/842 final]

Proposal for a Regulation of the European Parliament and of the Council on a Single Market for digital services (Digital Services Act) and amending Directive 2000/31/EC [COM/2020/825 final]

Principles of ethics and good practice for journalistic work often included in a self-regulatory code. While various codes may have some differences, most share common elements such as the principles of truthfulness, objectivity and accuracy.

Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive), as amended by Directive 2018/1808 of the European Parliament and of the Council of 14 November 2018.

Audience measurement is the process of collecting, reporting and interpreting data about the number and characteristics of individuals using media services. It is crucial for companies operating in the internal media market, allowing them to understand market dynamics, calculate and foresee advertising prices and plan content production in accordance with the preferences of the audiences.

Nielsen: 61% of marketers agree to have access to the quality audience data needed to get the most of their media budget

Indicator - number of guidance documents /reports issued by the Commission and/or the Board, as the case may be, in key regulatory areas for media pluralism (each 3 years)

Indicator - number of opinions by the Board on national media market scrutiny decisions taken into account by the relevant national authority (annual)

The recommendation under the preferred option will envisage a specific monitoring scheme to assess its uptake. Member States will need to submit to the Commission all relevant information regarding actions taken on media ownership transparency. Other areas covered by the recommendation will be included in the above resilience mechanism. The table below summarises tentative indicators proposed to monitor the achievement of the specific objectives of the intervention, to be further developed, including as part of the resilience mechanism.

The evaluation will be based on a robust system for data collection and monitoring, which is in itself foreseen in the legislative instrument under the preferred option. This includes both the reporting obligations to the Board by Member States (for instance, in relation to fair and transparent allocation of state advertising), as well as the new resilience mechanism. This mechanism would take the form of an upgraded and more systematic Media Pluralism Monitor, integrating the internal market dimension and based on specific key performance indicators. It would provide a detailed analysis of risks to the resilience of the internal media market. It would entail both a granular analysis of the situation in the Member States and an overview of the situation in the internal market as a whole.

Following the adoption of the legislative instrument, a period between three and six months will be given to Member States to adapt their national frameworks, depending on the relevant provisions. Subsequently, its effectiveness will be assessed by the Commission four years after the entry into force of the new rules and every four years thereafter. This will be a part of the Commission’s obligation to monitor and report on the implementation to the Council, the European Parliament and the European Economic and Social Committee.

Since there are no significant costs for citizens or businesses associated to the measures considered under the preferred option, there is no need to apply the one in, one out approach.

Monitoring media-specific risks on very large online platforms by the Board is expected to lead to heightened scrutiny of such risks and measures to mitigate them by the platforms. In view of wider risk assessment and mitigation obligations for very large online platforms under the DSA, such monitoring is not expected to generate significant new burdens, if any at all, and the relevant costs are expected to be absorbed into the business-as-usual costs.

The initiative is not expected to impose burdens on the providers of traditional audience measurement systems. The preferred option will oblige providers of proprietary audience measurement systems, namely online players, to disclose relevant information on methodologies of their audience measurement systems to third parties so that results of such systems can be verified. In view of wider transparency obligations under the DMA, such specific additional disclosure obligations are not expected to generate significant new burdens, and the relevant costs are expected to be absorbed into the business-as-usual costs.

The (voluntary) deployment of internal independence safeguards and adherence to self-regulatory instruments by SMEs following the recommendation would also entail marginal additional costs only that will be absorbed into the business-as-usual costs.

Media service providers already keep, provide to the national authorities and make public media ownership information as a result of legal obligations stemming from the laws transposing the AML Directive and the AVMSD, as well as national rules on business registers. Companies that decide to implement the recommendation to take (additional) actions to ensure availability of media ownership information, including on the interests and activities of media owners in other media or non-media economic sectors, could face marginal additional costs only.

The preferred option would entail no costs for citizens, and only negligible adjustment costs for businesses, i.e. overall one-off costs for all companies between EUR 9.4 and 14 million and recurrent annual costs between EUR 5.6 and 14.5 million that will be absorbed into business-as-usual costs. Most of the measures considered under the preferred option would result in obligations on Member States or their authorities. Only a few measures contemplated under the preferred option may arguably entail some new burdens in the form of negligible costs for media market players.

REFIT is not applicable to this initiative. No fitness check or evaluation of the existing policy framework were carried out. The current EU policy framework for media is determined by the AVMSD that was last reviewed in 2018 and still needs to be transposed in some Member States. The Directive contains a number of media regulatory measures related to consumer protection and promotion of public policy interests, such as cultural diversity, and does not regulate media pluralism and independence issues, to be addressed by the intervention.

üLower risks of dependence of certain media outlets on the state and hence of manipulated information

Mechanism for a structured cooperation between media regulators within the Board and tasks for the Board to assist the Commission in issuing technical/practical guidance in key areas of media law

The table below presents how the measures of the preferred option would address the problems identified and what would be their expected outcomes.

In particular, the legislative instrument will establish some core principles/rules for the media market, and empower the Board, the collective body of independent media regulators, to come up with expert views, opinions and collective action, hence preserving national regulatory discretion in the media sector. The principles/rules could be relied upon in front of national courts and the Commission could launch infringements proceedings in particular in case of systemic issues. Moreover, national media authorities could be granted targeted enforcement powers in certain areas of the new legislation, such as the rules on audience measurement. The non-binding element of the option - the recommendation - will guide the regulatory effort on the more sensitive issues (media independence safeguards) or matters where significant progress has been achieved as a result of other EU legal instruments (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, especially taking into account the lower cost of the Commission secretariat compared to the EU office.

Against the above assessment, the preferred option recommended for political adoption is option 2 sub-option A, i.e. a legislative instrument and a recommendation to media companies and Member States to foster media independence, underpinned by a governance structure consisting of the Board assisted by a Commission secretariat. This option will meet the general objective of the intervention - to improve the functioning of the internal media market - in an efficient, coherent, proportionate and largely effective way. The financial modelling estimates the net economic benefits, in terms of increased revenues, at EUR 2 885 million for the first year and EUR 2 898.1 million for the following years, above the expected benefits from other options.

Option 1, while in line with the problems and drivers identified, does not seem to use the most appropriate tools to address them and would not provide the necessary elements to improve the functioning of the single market, at least in the short term. Options 2 and 3 bring more substantial costs for compliance and enforcement, but these costs are likely to be outweighed by the significant potential benefits to be reaped for media market players, national regulators and citizens. These options are expected to improve the functioning of the internal media market without interfering with national identities or regulatory traditions in the media field, in line with Article 4(2) of the Treaty on European Union (TEU). This is especially true of option 2 that combines soft and hard law instruments. Moreover, both options are expected to increase the cross-border dimension of the media sector, both in terms of investment and consumption, supporting the creation of a genuine single market for media. National regulatory authorities will benefit from enhanced cooperation to deal with cross-border and EU-wide issues, while (as members of the independent Board) remaining in the lead of enforcing media regulation. European citizens will enjoy higher levels of quality media content and a safer information space providing a plurality of views, without having to incur costs. The additional costs for media market players (and national regulators) stemming from option 3 reduce partially the proportionality of that option to reach the specific objectives of the initiative. Regarding the two governance options, a positive proportionality effect of sub-option B in terms of savings for national regulators is neutralised by its higher cost compared to sub-option A.

All policy options are coherent with the single market objectives of freedom of establishment and freedom to provide services laid down in the TFEU (Articles 49 and 56), with the right to receive and impart information enshrined in the EU Charter of Fundamental Rights (Article 11) and with the objectives of the revised AVMSD, including the independence of media regulators gathered in ERGA. Options 2 and 3 would further contribute to achieving these objectives with the more constraining measures foreseen and with the creation of the Board. All options are also coherent with the Digital Services Act (DSA) and the Digital Markets Act (DMA). Under options 2 and 3, the Board would be able to monitor media-specific risks, including disinformation spread, on very large online platforms (VLOPs). Options 2 and 3 would complement the DMA by requiring proprietary audience measurement providers to share the methodologies of their measurement systems with third parties, including media companies. Horizontal ownership transparency requirements of the Anti-Money Laundering and EU Company Law Directives would be complemented by media-specific transparency elements included in the three options, aimed in particular at promoting transparency on the business interests and activities of media owners. However, Option 3 would be less coherent with regard to the measures envisaged in this area, as hard law media-specific ownership requirements and an EU registry under this option would create additional regulatory density vis-à-vis the existing horizontal ownership frameworks. When considering the two governance sub-options, sub-option A will assure a smoother interaction between NRAs and the support structure and higher coherence of the measures with other EU interventions (such as those under the DSA and DMA), due to closer coordination and easier access to wider expertise in the Commission.

Regarding governance sub-options A and B, for both Options 2 and 3, the Commission secretariat (sub-option A) would be less costly than an EU office (sub-option B), since its administrative costs would be streamlined and absorbed into the Commission’s structures. Establishing an EU office would incur overhead costs and require a high level of staffing whilst, at the same time, not benefitting from wider expertise available in the Commission. This would make in particular option 2A much more efficient than option 2B (while for options 3A and 3B, the main factor further decreasing their overall efficiency are their significant costs, especially for media companies).

Option 1 is expected to generate low costs for public authorities and media market players, which should get acquainted with the new framework, in line with limited expected benefits (notably increased revenues for media of EUR 1 billion per year). Option 2 is expected to bring higher direct compliance and enforcement costs for public authorities in comparison to the baseline. However, NRAs can expect between 10% and 20% in costs savings compared to the current NRAs’ expenditure related to coordination in ERGA. Media companies that take voluntary actions on independence safeguards and media ownership would face marginal costs. Public service media would face some costs linked to the principle of balanced media coverage. Economic benefits are estimated at EUR 2.9-2.6 billion in the form of increased revenues for media per year. Overall, option 2 is the most cost-effective option as costs are a very low proportion of benefits. Option 3 entails additional compliance and enforcement costs for public authorities and, especially, for media companies and other media market players. These stem from the obligations on internal independence safeguards (for all media companies except micro enterprises) and on balanced media coverage (for all audiovisual media companies), requirements on external independent audit and notification to media regulators (for all audience measurement service providers) and reporting and transparency obligations on state advertising (for all media companies and media regulators). No significant additional benefits are expected for public authorities, while media market players may experience only slightly higher benefits in comparison to Option 2 related to the additional obligations on fair allocation of resources. Overall, increased gross revenues of EUR 2.9-2.6 billion are accompanied by higher costs, equivalent to up to 13-14 % of the benefits in year 1, thus representing lower cost-effectiveness than option 2. Citizens are expected to face no costs, while direct benefits and wider positive impacts increase with options 2 and 3.

4) Ensuring transparent and fair allocation of economic resources in the internal media market: depending on the readiness of the actors involved to follow the recommendations, Option 1 could nudge public authorities and market players towards more transparency and fairness in distribution of economic resources. Under Option 2, the obligations for providers of audience measurement systems and requirements to Member States on transparency, non-discrimination, proportionality and objectivity in allocation of state advertising should improve the conditions for fair competition (by providing the level playing field in the internal media market) compared to the baseline. The convergent application of the new rules would be supported by the fact that the Board would foster best practices regarding audience measurement systems and of state advertising allocation. Option 3 would be slightly more effective in achieving the objective, due to the additional obligation on external audit for audience measurement systems and the obligation to notify the methodologies of such systems to national media regulators and the additional reporting and transparency measures for state advertising.

3) Facilitating free provision of quality media services in the internal market: Option 1 is expected to bring improvements compared to the baseline scenario over time, if its different recommendations are implemented by all or most Member States and media companies consistently. Under Option 2, the combination of a legislative instrument and a recommendation on media independence, is expected to largely meet this objective, marking a clear improvement compared to the baseline scenario both in terms of magnitude and timing, ensuring free provision of quality media services in the EU. The additional targeted obligations under Option 3, in particular balanced coverage by all audiovisual media, uniform internal independence safeguards within companies and an EU-wide media ownership-registry, would further contribute to the availability of quality media content. A Board supported by a Commission secretariat or an EU office would promote the effective and consistent application of the legislation and could contribute to the uptake of the recommendation. The EU office would in addition have EU wide tasks of monitoring media coverage of EU elections and EU-related disinformation.

2) Increasing regulatory cooperation and convergence in the internal media market: Option 1 is not suitable to address this objective. Options 2 and 3 (which are the same in substance in this area) would increase the effective cooperation of media regulatory authorities in tackling the cross-border challenges of media regulation, such as protecting the EU information space from ‘rogue’ third-country media service providers, convergence of regulatory approaches in key areas of media regulation relevant for media pluralism or lack of tools to monitor media-specific risks on very large online platforms. They are expected to result in higher regulatory predictability which can increase incentives for legitimate market entries. A Commission secretariat would effectively assist the Board to address key cross-border challenges and emerging issues, while an EU office could support the Board with research activities linked to regulatory guidance.

1) Fostering cross-border activity and investment in the internal media market: Option 1 would imply voluntary actions by Member States which could lead, only over time and depending of their uptake, to a better functioning internal media market and greater legal certainty. Options 2 and 3 (which are the same in substance in this area) would significantly increase legal certainty over the baseline reducing the current fragmentation in the procedures for (and outcomes) of media market scrutiny. A Board supported by a Commission secretariat would provide an agile and expert supervisory system to be set up rapidly, while a Board supported by an EU office could, over time, acquire a high degree of specialisation in media regulation.

The options were compared in terms of effectiveness (how each option is likely to achieve the specific policy objectives), efficiency (the extent to which the proposals provide a reasonable balance between benefits and costs), coherence with other EU policies, and proportionality (i.e. whether the costs are commensurate with the objectives of the initiative). The comparative analysis of policy options is based on the quantitative results of the economic estimates and qualitative evidence for social and fundamental rights impacts presented in section 6.

Options 2 and 3, by enhancing regulatory convergence in the internal media market, safeguarding editorial independence 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, fully independent from the 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. Under option 3, the additional obligations on balanced media coverage for all audiovisual media may impact editorial freedom of private media companies. Options 2 and 3 will also have a positive impact on the freedom to conduct a business (Article 16 of the Charter), when it comes to lifting obstacles to the freedom of establishment and to provide services and limiting the risks of certain media market players being subject to discriminatory treatment. Under option 3, however, businesses would be subject to costs linked to the additional obligations on editorial independence (obligation to establish uniform internal independence safeguards), which could adversely affect the autonomy of business owners to organise their corporate structure and newsrooms. This, together with the additional obligations on balanced media coverage for all audiovisual media, media ownership transparency and audience measurement would result in limitations to the freedom to conduct business.

Under option 1, citizens will benefit from the recommendations on safeguards for media pluralism and independence, including for public service media, in those countries and by those media companies that decide to take relevant actions. Where implemented, the recommendations could improve citizens’ access to trustworthy information, help them exercise their right to receive information and reduce the social divide in access to media content. At the same time, due to the risk of further fragmentation linked to the uneven adoption of measures by the Member States, it could be expected that Member States already performing better (as assessed by the Commission’s Rule of Law reports, the Media Pluralism Monitor and international rankings) would continue doing so, while those underperforming would not significantly improve; uneven protection of media freedom and pluralism would therefore persist.

All options have a positive impact on protection of media freedom and pluralism, which are an integral part of the EU Charter of Fundamental Rights (Article 11 of the Charter).

Under option 1, recurrent compliance costs between EUR 0.3 million and 3.4 million for an estimated share of 40% of media market players implementing the recommendation on transparency. Under option 2, these costs would increase to between EUR 0.4 million and 4.2 million for an estimated share of 50% of media market players. Under option 3, recurrent costs for all media market players implementing the transparency requirements on media ownership between EUR 4.5 and 45.7 million.

Under option 3, between EUR 446 672 and 2.05 million in recurrent enforcement costs for NRAs linked to specific ownership transparency requirements and an EU-wide media ownership registry.

Under option 3, EUR 182 million one-off and EUR 87.4 million recurrent costs for all audiovisual companies to comply with the obligation of balanced coverage.

Option 3 would introduce further obligations which are expected to add costs for public service media (additional obligation to publish regular reports) and broadcasters (additional obligation to ensure a balanced media coverage). Moreover, the compliance with a new EU registry is expected to bring additional costs in particular for NRAs.

In addition to the distribution of impacts described in section 6.1., Options 2 and 3 will have greater impact in those 16 Member States which are reported to be at high or medium risk for the independence of PSM governance and funding (see section 2.2.3). New costs to disclose information on media ownership are expected to be borne by media companies in those 12 countries which are reported not to have a national media ownership registry.

As for the distribution of economic impacts, the distribution of social impacts will remain uncertain under policy Option 1.

Under Option 3, Member States would be required to ensure the availability of media ownership information, including on the interests and activities of media owners in other sectors. This would be coupled with the establishment of a centralised EU media ownership registry, covering all EU media service providers. The obligation upon Member States combined with the centralised registry would provide a comprehensive overview of media ownership across the internal market. This would considerably amplify the benefits identified above for Options 1 and 2, but at a higher cost.

Option 2 would set out common information requirements for media service providers and would recommend to step up actions to ensure availability of media ownership information, including on business activities or interests of media owners. It would, therefore, help revealing the potential sources of influence on media content in different sectors. This would enable interested parties, such as researchers and investigative journalists, to bring media ownership information, covering multiple Member States, to the attention of the general public, thus generating additional social benefits. Enhanced transparency of media ownership would increase accountability, deter interference and ultimately increase citizens’ trust in media, thus strengthening social cohesion.

Option 1 would call on Member States and companies to step up actions to ensure availability of media ownership information, including on business activities or interests of media owners in other media or non-media sectors. Assuming that the recommendation is followed, it would lead to revealing such specific potential sources of influence on media content in different sectors, enabling audiences to critically analyse the content they are exposed to (e.g. to discover biases in the way news is presented or even withheld) and to make informed choices of their media, in particular for news content of political nature.

Under Option 3, given the particularly strong influence of television on public opinion, all audiovisual media would be required to provide balanced coverage in news and current affairs reporting, including during elections. The measure would foster common standards for such reporting by both public and private broadcasters in all Member States. This measure can be expected to enhance equal access by citizens to a plurality of viewpoints, in particular during elections, although at a significant cost for private audiovisual media.

Under Option 3, the obligation of balanced media coverage by PSM would be combined with a requirement for such media to publish regular reports on the fulfilment of the obligation. This would create an opportunity for PSM to review their practices and results, justify their editorial stance and address specific points of concern. As these reports would be in the public domain, they would stimulate wider scrutiny, thus creating an incentive to meet EU standards, albeit at a cost for PSM.

Under Option 2, targeted independence safeguards for PSM (particularly on appointments and dismissals of management) and a general obligation of balanced media coverage would be established in law. The governance safeguards would provide a basis for recourse to courts if, for example, the management of a public broadcaster believes that they were dismissed without due justification, as well as for the Commission to launch infringement proceedings in case of deficient rules, amplifying the social benefits identified under Option 1. The balanced coverage obligation would ensure a more diverse programming, benefiting citizens, companies and civil society. It would also provide an additional protection layer from interference in editorial decisions, as journalists would be able to invoke it in response to attempts to control content, such as political news reporting. As a result, significant improvement in rule of law and democratic standards can be expected, especially in the Member States where issues have been identified. Another likely social benefit is greater EU-wide social cohesion, as citizens of different Member States will gain more equal access to independent, inclusive and diverse public service media content.

Under Option 1, the recommendation would call on Member States to provide relevant safeguards for the independent management of and balanced coverage by public service media. Assuming that the recommendation is followed, it would reduce the discretion of governments or other political bodies in appointing and dismissing the management of PSM in an arbitrary manner, contributing to a more stable environment for their activities. As PSM play a central role in providing news and framing public political debate, the balanced coverage recommendation would contribute to a gradual improvement in rule of law and democratic standards.

In addition to the distribution of economic impacts described in section 6.1, social impacts of policy Options 2 and 3 will be mainly relevant for citizens, increasing the effective protection from cross-border risks of illegal or harmful content and threats to media pluralism and media freedom.

In addition, a mechanism will be established for the Board to detect, evaluate and address media-specific risks on very large online platforms, for instance as regards amplification of online disinformation. It will provide a specialist analysis by independent regulators on sensitive media freedom and plurality issues, looking for example at the consequences of amplification of certain types of content online for shaping of public opinion. It will also monitor potential impacts of content moderation by platforms on media freedom and pluralism and the availability of quality media content to citizens, in particular younger, digital native generations, and to businesses. It would thus contribute to a safer, more reliable online space for the benefit of the entire society.

Under Option 2 and Option 3, to address current weaknesses in the cooperation framework between media regulators, a general mechanism will be established for a structured cooperation as well as a specific mutual assistance mechanism for situations of serious media freedom or pluralism risks with a cross-border dimension. This structured cooperation would more effectively mobilise national regulatory authorities to respond to concrete concerns. Currently, only half of the requests for cooperation are fully completed to the mutual satisfaction of the requesting and receiving NRAs. A best effort assumption of a 50% increase in that proportion would mean that 75% of cases would be completed satisfactorily. This would improve the welfare of citizens and social cohesion, in particular by creating a safer online space with reduced exposure to illegal or harmful content. Moreover, collective action by the Board to protect the EU information space from media service providers (including from third countries) which threaten the Union’s public order and security would shield citizens from ‘rogue’ media players ignoring journalistic standards and spreading disinformation.

This section considers the main social impacts of the initiative, which are described below. Overall, the measures are expected to have considerable positive social impacts, stemming from an improved investment environment and better competitive conditions (e.g. when it comes to fairer audience measurement and allocation of state advertising). Given that the European media sector contributes to job creation and growth with a turnover exceeding 2% of EU added value, strengthening the internal media market (to a varying extent, depending on the option) could bring employment opportunities and provide more stability and security for journalists. Moreover, by enhancing media independence through the whole set of measures (in particular related to editorial independence safeguards and protection of journalists’ sources/communication), the initiative would contribute to ensuring diverse and independent reporting for citizens and businesses. This would reduce risks of exposure to disinformation and raise the level of trust towards media. The intervention would have a positive impact on rule of law and democratic systems: it would contribute to raising the level of democratic debate and help media (and journalists) to fulfil their societal role of holding power to account.

Under option 1, EUR 490 000 in direct recurrent costs for the EU + EUR 473 000 enforcement annual costs for NRAs on monitoring and reporting on implementation of recommendations.

Under options 2 and 3, recurrent enforcement costs for NRAs between EUR 415 000 and 1.6 million. Obligation for national media regulators to establish and maintain a registry on allocation of state advertising under option 3: EUR 1.7 million.

Under option 3, cost of external audits for audience measurement providers operating in the joint industry committees (JICs) around EUR 27 000, and for large online platforms between EUR 55 000 and 545 000.

Under option 2, minor familiarization costs concerning the requirements, to be incurred mainly by large online players, operating outside the joint industry committees (JICs).

Under option 2, one-off adjustment costs for NRAs between EUR 69 000 and 415 000 and recurrent enforcement costs of EUR 592 000 in sub-option A and 423 000 in sub-option B.

Under option 1, recurrent compliance costs between EUR 4.1 million and 8.2 million for an estimated share of 40% of small and medium media market players (from 10 to 249 employees) in the newspaper, radio and television sectors implementing the recommendation to deploy internal safeguards. Under option 2, these costs would increase to between EUR 5.1 million and 10.2 million for an estimated share of 50% of SMEs and under option 3, the costs would amount to between EUR 10.3 and 20.5 million as all SMEs would have to set-up internal independence safeguards.

Under options 2 and 3, one-off administrative costs of EUR 50 000 for the common IT tool to exchange information + direct recurrent administrative costs for NRAs between EUR 1.12 million and 3.36 million in sub-option A and EUR 0.8 million and 2.4 million in sub-option B.

Under options 1, 2 and 3, direct compliance costs between EUR 9.1 million and 13.7 million linked to familiarisation with the new provisions.

Under options 2 and 3, recurrent administrative costs for NRAs between EUR 44 100 - 96 600 for scrutiny of media market transactions in sub-option A and between EUR 31 500 and 69 000 in sub-option B.

With regard to policy Option 2 and 3, the introduction of the Board for Media Services will allow all NRAs to benefit from a more efficient cooperation in comparison to the current ERGA, to a substantially higher extent than under policy option 1. Both in the case of sub-option A and sub-option B, each NRA can save up to 20% of the current annual expenditure related to coordination work in ERGA.

With regard to policy Option 1, limited benefits are expected for NRAs in all Member States due to slightly more efficient cooperation within ERGA thanks to an increased support from the European Commission.

Compared to the current ERGA governance system in the baseline scenario, a (bigger) secretariat of the Board within the Commission could be set up very quickly and is expected to support the Board more effectively due to the existing pool of expertise within the Commission, which would result in better quality output of the Board. An EU office would arguably provide a similar output in the long term, possibly covering further activities with an EU dimension, but it would take longer to set up and become an EU-level expert body on media regulation. Both sub-options would promote higher confidence and trust in the regulatory and advisory work of the Board, enhancing the predictability in the market for the benefit of media companies and regulators. The national regulators would also see stronger support to their work thanks to an effective burden sharing and the expected spill-over effect of expertise and experience. Compared to the current governance system of ERGA, this would result in up to 20% in cost savings for NRAs, estimated at up to EUR 455 000, along with increased transparency and accountability of the support structure for media regulators.

The Board would be supported by either a Commission secretariat with 8 to 10 full time employees (sub-option A) or an EU office composed of 30 to 35 full time employees - both providing support to the Board (while the office would have its own EU-wide tasks - sub-option B). Under sub-option A, administrative costs and costs related to the substantive supervisory tasks of the Board would lead to an annual operating budget of 1 million EUR, to be absorbed into the Commission’s structures. Under sub-option B, the overall costs, leading to an annual operating budget of 5 million EUR, would be higher, since the office would need to establish its own administrative operations, cover physical and IT expenditure and take care of own research activities.

Under Options 2 and 3, the newly created Board, based on the current cooperation network between independent media regulators (ERGA), would promote the effective and consistent application of the proposed legal instrument. The output of the Board (e.g. its opinions) would provide legal certainty for media companies, thereby facilitating cross-border investments, and enhance a level playing field for media companies across the internal market. In particular, the Board would improve the consistency and quality of national market scrutiny measures and media law enforcement (including across borders), and protect the internal market from ‘rogue’ third-country media outlets. Enhanced cooperation and regulatory consistency will foster a more predictable regulatory environment for all media market players. It will facilitate the work of relevant national authorities (media regulators themselves as well as those in adjacent fields: competition and telecom regulators, relevant ministries). Citizens would ultimately benefit from a richer, more trustworthy and pluralistic media offer and a better (and quicker) enforcement of EU media rules, in particular online, enjoying a safer information space, with a high level of protection against harmful content and lower levels of disinformation compared to the baseline.

Under Option 1, the Commission would develop a set of key performance indicators to monitor and evaluate the uptake of the Recommendation by Member States and relevant companies, based on their input. Three additional full time employees would join the Commission.

Option 3 would create additional set up and running costs for SMEs stemming from obligations on balanced media coverage for all audiovisual media and the set-up of uniform editorial independence safeguards for all media companies, with the exception of micro companies for the latter. SMEs would also face costs resulting from the obligation to provide information on state advertising received. Concerns emerged around the cumulative costs linked to these additional measures, estimated at EUR 351 million the first year and EUR 138 million per year in subsequent years, which are not expected to be proportionate to the additional benefits compared to Option 2. The net annual benefit for SMEs under this option is estimated at EUR 1 015 million through financial modelling.

Under Option 2, mechanisms for increased regulatory convergence and cooperation would improve legal certainty and lower legal costs in particular for SMEs. This would also increase confidence to operate across borders, thus facilitating the entry of new players and increasing competition. In addition, the option would help balance the playing field for SMEs to compete with online platforms for advertising revenues. More transparent audience measurement systems would better inform advertisers’ choices and balance the relations between media SMEs and online platforms. The requirements for state advertising would reduce market distortion and contribute to SMEs’ sustainability. The recommendations on internal independence safeguards will pay due regard to the needs of smaller players. However, overall costs, estimated at EUR 21 million the first year and EUR 10 million per year in subsequent years, are expected to be balanced by increased benefits. The net annual benefit for SMEs under this option is estimated at EUR 1 146 million by the financial modelling.

Under Option 1, SMEs consulted do not expect the adoption of a recommendation to generate major benefits due to its non-binding nature, which does not guarantee that all Member States will actually take action. Concerns therefore emerge about the level playing field across Europe for SMEs. The net annual benefit for SMEs under option 1 is estimated only at around EUR 402 the first year and EUR 414 million recurrently, with EUR 19 million in overall costs the first year and EUR 8 million per year in subsequent years, resulting in a lower cost-benefit ratio.

In order to fully capture impacts on SMEs, data collection activities targeted this specific sector as much as possible. In particular, of 41 respondents to the online survey, half were SMEs. The responses helped to model the effects on SMEs. Under all options, SMEs will incur basic familiarisation costs related to media pluralism measures and media market scrutiny, estimated at EUR 8 million to 12 million. The cost-benefit ratios for SMEs differ between options, due to the different requirements. At the same time, the estimates show that around 40% of the benefits of all three policy options would accrue to SMEs, in line with their share of baseline revenues.

Option 3 would lead to further benefits but also additional costs. Audience measurement providers and large online platforms would face additional costs, related to the obligation to undertake independent audits on audience measurement. There would also be further costs for NRAs in all Member States and media market players in the newspaper, radio and television sectors (mainly because a national registry on state advertising would be mandatory).

Under Option 2, provisions on audience measurement would enhance transparency in particular of online players which operate across borders and have business strategies across the single market. They would benefit in particular broadcasters and newspapers who have lost significant advertising revenues to online platforms, in particular therefore in bigger Member States. Also, the rules on the distribution and transparency of state advertising would have a higher impact in the Member States which are reported (by the MPM) to lack such rules and where particular problems in this area persist (see section 2.2.4). All media market players in the newspaper, radio and television sectors could benefit from these measures. More effectively than in policy Option 1, a binding obligation on transparency of state advertising would mainly benefit those news media providers of Member States where the distribution of state advertising is unfair and non-transparent. Such news media providers can increase their revenue from state advertising and, therefore, improve the viability of the sector whilst increasing diverse, independent sources of information in these Member States.

Option 1 will affect NRAs and/or relevant national authorities in all Member States. As for the other areas, the uptake at national level should be considered uncertain, given the non-binding nature of the Option. Depending on this uptake, measures in this area can potentially affect all media companies in the newspaper, radio and television sectors.

Under Option 3, the additional obligation for national media regulators to establish and maintain a specific registry on allocation of state advertising would maximise the awareness and scrutiny of its distribution. The effect would be to generate further public debate and accountability, potentially increasing the extent of redistribution of state advertising revenues. Maintaining national registries would, however, add costs to companies in the media sector and national authorities compared to option 2.

State advertising can, in the most severe cases, be skewed over 80% in favour of pro-government media. If, as a result of this option, the share of advertising of media which are not supportive of the government reached 50%, this would represent a 150% increase in advertising revenue for such media. This would have a significant effect in a context where some news outlets receive the majority of their advertising income from the state, and some other media outlets, in particular SMEs, are in a precarious situation. Fairer allocation of state advertising in many Member States will, ultimately, improve fair competition in the internal media market as a whole. In addition, the measures would increase the effectiveness of the use of state resources.

Option 2 would oblige Member States to adopt rules and criteria to ensure transparent, non-discriminatory and objective allocation of state advertising to media. It would also require pro-active publication of core information about the expenditure of state advertising. This obligation would create an opportunity for national authorities to review and justify their advertising policies and to demonstrate their fairness. If the adopted rules or practices did not comply with the principles, media companies would be able to contest them in national courts, and the Commission might launch infringement proceedings concerning systemic issues. As above, the main beneficiaries would be private media companies deprived of state advertising so far, in particular news media providers in the broadcasting and the press sectors (encompassing printed and online media) and, especially, media critical of the government in Member States where currently preferential allocation of state advertising is the most acute. As a result of the measures, a wider range of media outlets would have access to this revenue source and a more level playing field would be established, potentially incentivising cross-border activity.

Under Option 1, Member States would be recommended to establish tools to monitor state advertising expenditure and publish regular reports on its distribution to media. Rendering such information public would increase scrutiny by the media and the general public, nudging public authorities and bodies towards fairer distribution of state advertising. The main beneficiaries would be those private media companies deprived of state advertising so far, in particular news media providers and, especially, media critical of the government in Member States where currently preferential allocation of state advertising is the most acute. However, the impact would greatly depend on the readiness of Member States to follow the recommendation.

Under Option 3, the additional obligation of an external independent audit and the obligation to notify the methodologies of audience measurement systems to national media regulators would ensure regular third party verification. This would increase professional level scrutiny, potentially helping those media companies, in particular smaller ones, who do not have the capacity to analyse complex metrics. However there would be increased costs to audience measurement providers.

This option will foster fairer competition for advertising revenue between media companies and online players as well as competition between audience measurement service providers. As advertising revenues are key to the viability of media, the financial benefits for media companies will be significant. In particular, in the traditional media environment, media companies typically receive 85% of the value paid by an advertiser (the remaining 15% going to the intermediating sales agency). However, in the online environment, as a result of targeted programmatic advertising, media companies typically receive only 40% of the value, whilst the majority is captured by vertically integrated online intermediaries (who are active both on the advertising and audience measurement markets). The new requirements would help to redress the balance. If we assume the share of advertising value accruing to the media increases to 45%, due to the strengthened negotiating position of media companies, this would represent a potential increase of EUR 450 million. The possible gain would be recurrent and growing (in line with the growth of internet advertising and the share of programmatic advertisement spending). Furthermore, greater reliability of measurement of online audiences will be valuable to media regulators in the context of assessing the opinion forming power of market players.

Under Option 2, the requirements of transparency, impartiality, inclusiveness and verifiability of audience measurement methodologies, accompanied by the encouragement of independent auditing and guidance issued by the Commission with the assistance of the Board, will lead to adoption of minimum standards across all systems for all media in the internal market. The specific requirement for proprietary systems to disclose their methodology upon request will apply, in particular, to online players and will benefit media companies relying on such online systems for audience data, notably broadcasters and the press. The media will thus be empowered to verify and understand the characteristics of their online audiences and their behaviour, recognise any possible biases, as well as to better assess the value for money of online advertising prices. This transparency will also improve accountability of providers of proprietary systems and act as a counterweight against potential attempts by them to unduly inflate their audiences.

Option 1 would recommend that market players are transparent, objective and inclusive in their audience measurement methodologies, which could incite some providers of online proprietary systems to improve their measurement systems.

On top of policy option 2, Option 3 would introduce further obligations which would affect all EU Member States as well as all media market players in the newspaper, radio and television sectors, in terms of benefits and especially in terms of higher costs.

In this area, under Option 2 all media companies could be affected, even if the distribution of benefits and costs depends on the uptake of specific recommendations e.g. the extent to which internal control mechanisms will be introduced. This uptake is however expected to be greater in comparison to Option 1.

Impacts of Option 2 can be particularly relevant for significant parts of the single market as 21 Member States are currently considered (by the Media Pluralism Monitor) at high or medium risk of political or commercial influence over editorial choices (see section 2.2.3). Improvement of common professional standards will increase the quality of media services across the single market thus increasing consumer welfare and demand whilst increasing opportunities for cross-border reporting, cooperation, mobility and integration. More transparency across the EU on media owners will increase accountability for their business interests across borders.

Option 1 can potentially affect all media companies in the newspaper, radio and television sectors. However, the distribution of such impacts is strictly linked to the uptake of the recommendations at the national level, which remains uncertain.

In response to the unwarranted surveillance or pressure on journalists or their sources, Option 1 would invite Member States to take actions geared at ensuring protection of journalistic sources and communication, options 2 and 3 would stipulate a right of non-disclosure of journalistic sources, coupled with safeguards to ensure that such a right is not circumvented by public authorities, and safeguards against surveillance. This would, to different degrees depending on the option, protect journalists against unwarranted surveillance or other forms of pressure and ensure that journalists in different media sectors can communicate with their sources, which is necessary for the production of media content, particularly for investigative reporting or reporting on politically and commercially sensitive matters. While under option 1, the level of protection would depend on the uptake of the recommendation across the EU, options 2 and 3 would grant a uniform level of protection to journalists across the EU. They would thus contribute to a freer flow of media services in the EU media space. As a result, trustworthiness and diversity of media content would be safeguarded, also for the benefit of consumers.

Option 3, in addition to the legal principles of option 2, would require all media service providers to set up detailed and uniform internal independence safeguards. The safeguards will be codified in law in order to specify an obligatory governance architecture for media outlets which will establish checks and balances in favour of editorial independence for all media outlets at national and local levels, across audiovisual, radio and the press (with a derogation for micro-enterprises where governance systems would be disproportionate). Furthermore, adherence to self-regulatory mechanisms will be obligatory. This approach would have the advantage of providing a mechanism for enforcement and thus provides for full consistency of safeguards across the internal market. Additionally, common transparency requirements for all media companies when it comes to the owners’ activities in other media or non-media related sectors would contribute to achieve further consistency in the internal market with positive effects on potential investments. The potential benefits would be achieved more quickly, but at a higher cost for media market players.

Option 2 would combine the legal principle of protection of editorial independence or integrity of media and legal principles for public service media independence, with practical recommendations for media companies on editorial independence safeguards and development of self-regulation. By anchoring the recommendations for media companies in the law (which would spell out a principle of protection of editorial independence of media), and backing them with an effective monitoring system, the actual uptake of internal safeguards (which have shown their effectiveness for companies that already have them) is expected to be greater. Increased adherence to self-regulatory mechanisms and greater media ownership transparency, including on business interests of the owners, will also help deter interference and preserve the quality of content produced and contribute to higher autonomy of editors. Option 2 would, therefore, help reduce the risks for media companies of political or commercial pressures. It will also enable a more level playing between all media companies who abide by the same professional standards. Consumers would benefit from the increase in the choice and trustworthiness of media content, and trust of audiences in media would grow, which, in turn, would generate additional revenue for media companies. Principles for public service media independence would also increase the effectiveness of the use of state resources.

Option 1 would, in order to address the problem of growing interference in the provision of quality media services, call on Member States to protect media independence, invite them to provide safeguards for public service media, encourage media companies to deploy internal independence safeguards (including a catalogue of recommended safeguards) and to foster media self-regulation. Such recommendations would provide support to all media, in particular to companies who wish to develop their resilience to internal and external pressures. Increased adherence to deontological standards of, for example, accuracy, objectivity and relevance would help deter interference and preserve the quality of content produced. However, the actual impact of the recommendation would depend on the extent to which Member States and companies follow it. The same applies to the call to Member States and companies to step up actions on transparency of media ownership information, including on business activities or interests of media owners in other media or non-media sectors. If such a recommendation is taken up, it would foster predictability of the market and potentially encourage further investments.

With regard to media market players, all sectors can be positively affected by measures in this area. However, a reduced regulatory fragmentation across borders can be particularly relevant for providers of audiovisual media services, which are currently regulated in a more detailed manner than other media sectors and which are more prone to expanding their operations to other Member States. In addition, better enforcement of audiovisual regulation across borders will benefit media service providers competing with global video-sharing platforms by enhancing the level playing field through timely and effective measures.

Options 2 and 3 will positively affect the cooperation between NRAs of all Member States in comparison to the current collaboration under ERGA, in particular as regards cross-border issues where timeliness and sharing of information are key in delivering positive outcomes. At the same time, each NRA will have to bear costs to familiarise and comply with the new framework.

Under Option 2 and Option 3, in order to address the problem of insufficient regulatory cooperation and convergence, a general mechanism for a structured cooperation between media regulators and a specific mutual assistance mechanism for situations of serious media freedom or pluralism risks with a cross-border dimension will be introduced. This will lead to quickly solving cross-border cases and thus to effective enforcement of the legal requirements for media players (including online). In particular, guidance by the Commission with the assistance of the Board on technical or practical aspects of regulation relevant for media independence and pluralism, applicable especially in the audiovisual sector, will reduce differences in interpretation and application of EU media rules across the Member States and enable regulators to address emerging obstacles to the functioning of the media market in a structured and coherent way. This will lead to more even and effective enforcement of the legal requirements for media players. The Board will also monitor media-specific risks on very large online platforms, thus contributing to consistent protection of media pluralism online. The Board will also be empowered to coordinate measures to protect the EU information space from media services providers (including from third countries) which threaten the Union’s public order and security. This will help national regulators to jointly address threats more speedily and consistently and close the current enforcement gap where viewers may receive the restricted content from a satellite provider established in another Member State. It will notably improve the level playing field for media market players by protecting them from entities producing and distributing media content (often disinformation) without observing journalistic standards (‘rogue traders’). It will also provide more clarity for content distributors regarding restrictions they are to comply with. Overall these measures will result in a more stable and convergent regulatory environment for media market players and greater legal certainty.

With regard to media market players, the two options will particularly benefit: (i) providers of news media content, which are more politically sensitive, and non-national entities especially in countries which are reported to have more protectionist measures; (ii) large broadcasters which can achieve economies of scale through higher cross-border integration; and (iii) companies active in the radio sector and digital-only publishers, which can benefit from a clearer legal framework.

Options 2 and 3 can be particularly beneficial to harmonise divergent media pluralism laws and procedures. This could be particularly relevant for 15 Member States where there is a lack or weakness of measures on media market scrutiny and a high risk for market plurality has been highlighted (see section 2.2.1). This will lead to improved and more even conditions for investment across significant parts of the internal media market, thus facilitating scaling up across borders, innovation and quality content.

Impacts of Option 1 can potentially affect all media companies in the newspaper, radio and television sectors. However, only media companies operating in Member States which decide to adopt the recommendation will be affected both in terms of benefits and costs.

Based on feedback from stakeholders, potential reduction in legal costs can be estimated at EUR 30 million per year, due to streamlining of procedures for media market operations. SMEs will particularly benefit because of their reduced financial capacity. Stakeholders indicated that large broadcasters, who have traditionally been regulated in more detail, are expected to benefit because they are more prone to cross-border integration in order to achieve economies of scale in a capital-intensive industry. For example, a cross-border integration between three broadcasters would yield cost efficiencies (stemming from digitalisation of operations, company IT and data, administration, procurement and advertising sales) between EUR 160-360 million. Moreover, if wider business opportunities are also factored in (production of premium content, new technological standards for connected TVs, new digital advertising formats), benefits of between EUR 320-720 million can be projected.

The resulting more predictable, coherent and less protectionist internal media market will provide greater legal certainty and fairer competition for media players, reducing compliance costs and facilitating cross-border investment. Media players, in particular providers of news content and non-national outlets, which are, respectively, more likely to suffer from political pressure or protectionist measures, will have higher confidence to undertake new investments.

Under Option 2 and Option 3, a combination of general requirements for national measures or decisions and coordination of basic process requirements for national scrutiny of media market transactions will reduce the obstacles created by the current patchwork of media pluralism laws and procedures and mitigate the risk of using media market measures for protectionist reasons. The Board will be tasked to issue opinions on specific cases that may affect the proper functioning of the internal media market. The Board will analyse national decisions/opinions from the market and legal perspective, looking at complex matters such as opinion-forming power of the media, editorial integrity, market dynamics and viability, paying due account to the cross-border dimension, and drawing from its own expertise and best practices across Europe. Moreover, the Board will enjoy a high level of independence from national governments and authorities as well as private parties. As a result, it can be expected that national authorities will take account of the opinions of the Board in most cases.

With regard to the distribution of economic impacts, measures envisaged within each policy option are expected to affect public authorities and media market players to a different extent. The main economic impacts are assessed by area and by policy option in the section below. An analysis of the single market dimension and distribution of impacts is also provided. However, a quantitative breakdown of economic impacts by Member States and stakeholder group is not captured by the economic model due to the lack of data and the numerous factors on which calculations depend. Therefore a qualitative distributional analysis is developed.

As shown in the table above, all policy options are expected to have a beneficial net impact compared to the baseline. Benefits are higher for options 2 and 3 compared to option 1, which stems from the non-binding nature of option 1. Option 2A would provide the highest level of net benefits due to the higher costs for companies in the media market and/or public authorities envisaged in options 2B and 3A-B.

The gross economic benefits of the different policy options were then estimated by increasing (multiplying) the baseline revenues by the quantitative impact score. In the final step, for each policy option, net benefits for the first year were calculated as total increased estimated revenues minus all the one-off and annual costs, while net benefits for the subsequent years were calculated as total benefits less all the recurrent costs.

The comparison showed that the benefits impacts would be uncertain or weak in policy option 1, and increasingly more positive in options 2 and 3, as they would be more effective through a more complete set of measures. At the same time, the benefits of option 3 would be off-set by increased regulatory complexity due to the burdensome additional requirements, in particular on balanced media coverage for all audiovisual services and transparency obligations on state advertising. These qualitative impacts were converted into quantitative impact scores using a seven level scale ranging from highly negative, over uncertain/weak, to highly positive. Each quantitative impact score is determined by comparing how many levels better or worse than the baseline the policy option is from a qualitative perspective. An unweighted average impact score is calculated for each policy option, based on the average of all individual scores for each of the four impacts.

Subsequently the impacts, in terms of benefits and costs, of the different policy options are estimated as incremental changes in revenues compared to the baseline. This ensures comparability of the impacts of each option. The impacts are derived through a causal pathway, for three types of benefits - competitiveness, trade and investment flows; market viability; and consumer choice. Also, the costs related to regulatory complexity are integrated. The assessment of these impacts was informed by the evidence collected through the supporting study (desk research, interviews, online surveys, workshop).

To estimate the overall economic benefits of the options an economic model is used, in line with other studies carried out to assess the impact of policy options where there are significant gaps in data available. The economic benefits are modelled as increases in revenues for media service providers. As a first step, a baseline scenario is developed on how the identified problems would evolve over time in case no policy action is taken. On this basis, revenues for the media are estimated for the 2021-2027 period. Total revenues are expected to grow at a 3% CAGR in the four sub-segments of the media market (television and home video, internet advertising, newspapers and radio), driven in particular by the growth in online advertising, whilst newspaper and radio revenues are expected to stagnate. An annual average for the period is estimated at EUR 105.9 billion, and this serves as the baseline for revenues.

The quantitative estimates shown in this section should be considered with caution owing to the scarce data availability and the multidimensional nature of the proposed intervention, which makes it difficult to determine with certainty the direction and strength of causal links. Estimates were thus calculated using best-effort assumptions based on qualitative evidence collected from media companies and regulators.

The policy options were evaluated for the economic, social and fundamental rights impacts, including the SME test. Environmental impacts are expected to be null or marginal for all the options compared to the baseline and are not considered.

Establishing a regulatory EU agency for the enforcement of EU media law acquis would not be a proportionate way to achieve the objectives. Full centralisation of regulatory competences at EU level would be difficult to justify with regard to the principle of subsidiarity. National media regulators oppose such a set up as they fear it would have an impact on their independence. From the budgetary perspective, establishing a new regulatory agency would be a costly option. Such expenditure would be unnecessary as the goals of the intervention could be attained with a lighter, more decentralised governance structure.

Standardisation of audience measurement systems would disrupt the market and future innovation. Setting standards at EU level in this area could undermine the existing well-functioning joint industry committees. The majority of respondents to the public consultation expressed interest in regulatory intervention promoting a common understanding of the key concepts related to audience measurement, instead of standardisation in this area.

Full harmonisation of criteria applicable to public service media remits, organisation and funding would not respect the subsidiarity principle and undermine the Amsterdam Protocol. Such a detailed EU-level intervention would have adverse effects, in particular in those Member States where there are no risks to the independent functioning of public service media.

Full harmonisation of key media law aspects related to media pluralism could run counter to the freedom of expression and freedom to conduct business, especially for non-audiovisual media. While requiring balanced media coverage by public service media is reasonable and proportionate as foreseen in option 2 (given the remit of such media for the fulfillment of which they receive state funding) and could also be considered for all audiovisual media, given that private media may also be subject to national rules in this area, detailed obligations for all media, including the press, could lead to adverse effects on their editorial freedom and capacity to invest in content. Harmonised must-carry obligations for media content online could be difficult to implement and enforce.

Such an option was discarded, based on competence (subsidiarity) and proportionality criteria. Full harmonisation of national media ownership laws, including thresholds, is neither necessary nor proportionate. Stakeholders point out that uniform media ownership laws across the Union would be undesirable and disproportionate. In particular, media industry players underlined that any EU-level intervention should not become an anti-concentration tool.

This option would harmonise national laws related to editorial independence and media pluralism, including rules on balanced media coverage by all media, also during election periods, content findability and must-carry obligations, including online. It would also introduce common criteria for remits, organisation and funding of public service media (with the agency tasked to issue reports on independence of public service media). It would also envisage an EU-wide standardisation of audience measurement systems, with the agency certifying systems that could be applied in the EU. It would also fully harmonise transparency, non-discrimination, proportionality and objectivity in allocation of state advertising (with specific thresholds on expenditure) and establish an EU-wide portal on distribution of state advertising.

Under such an option, full harmonisation of national media ownership laws, including ownership thresholds and transparency, could be coupled with notification obligations to and review by the Agency of draft decisions related to media market scrutiny. The agency would be also in charge of an EU media pluralism scrutiny procedure for transactions with an EU-wide dimension (put in place in parallel to the EU competition rules). It would also include ex ante exclusive powers for the EU agency to restrict foreign media service providers.

An option of full harmonisation of national rules related to media pluralism and independence, enforced by a new regulatory EU agency (incorporating the existing ERGA), was considered but discarded at an early stage.

Overall, a carefully balanced regulation, underpinned by a structured cooperation framework for media regulators within the Board, could warrant a similar level of flexibility as a directive, while addressing the problems in a quicker manner.

A directive could also be used for a legislative instrument. This could be supported by the argument of specificities of national media markets and the potential need for a margin of manoeuvre in transposing the legal principles. However, recognising the sensitivities of the topics covered by the initiative and its objective of protecting media companies from state interference, the choice of this instrument has certain drawbacks. Firstly, taking into consideration the experience of the recent AVMSD transposition, a directive would delay the application of EU rules due to a lengthy transposition process. Secondly, the AVMSD experience has shown discrepancies in national transposition of some of its key concepts. Finally, stakeholders expressed concerns that some Member States could 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.

A regulation would be a more constraining delivery instrument, given its direct application. It would prevent any potential divergences or distortions during the transposition process and would stipulate directly applicable rights, for instance to journalists, and obligations, for example, for providers of audience measurement systems. It would also allow to address the problems faster, in order to avoid further obstacles to free provision and reception of media services, which undermine media freedom and pluralism in the internal market. The recourse to a regulation would also be preferable given the institutional component of the initiative (the establishment of the Board).

The legal basis of Article 114 TFEU (see section 3.1) provides flexibility with regard to the choice of the legal instrument. Therefore, the legislative elements of the assessed options could be potentially delivered by a regulation or a directive.

Under the fourth objective, for audience measurement systems, Option 2 would envisage requirements of transparency, impartiality, inclusiveness and verifiability of their methodologies, while Option 3 would also oblige all audience measurement service providers to undergo external independent audits and to notify the methodologies of audience measurement systems to national media regulators, which would put pressure on the providers to effectively comply with the legal requirements. Similarly, in the field of state advertising, Option 2 would require that its allocation is subject to transparent, objective and non-discriminatory criteria and that key information on advertising spending is published. Option 3 would add a requirement for all media companies to submit to national media regulators the information on state advertising received, and for the regulators - to establish and maintain registries on allocation of state advertising. The additional scrutiny by the regulators and the public - in the latter case thanks to the availability in one place of the information on the advertising expenditure allocated/received by different authorities and media outlets - would lead to a greater effectiveness of the envisaged allocation criteria, although at a cost.

For example, under the third objective, Option 2 would encompass legal principles on media independence and rules on non-disclosure of journalistic sources as well as a recommendation on media independence, while Option 3 would envisage uniform obligations for media companies to set up internal independence safeguards, leading to its greater effectiveness due to the binding nature of the detailed rules in this area. Concerning public service media, Option 2 would establish an obligation of balanced coverage by such media and provide for targeted safeguards for the independent appointments and dismissals of management of public service media. Option 3 would add a further targeted obligation - to publish regular reports on how the balanced media coverage obligation is fulfilled. Such a reporting obligation is likely to incentivise public service media to comply with the balanced coverage obligation. Option 3 would also introduce balanced media coverage obligations for all audiovisual media, which would lead to its higher effectiveness as regards this objective, although at a substantially higher costs for media companies.

Regarding the two legislative options, while their effectiveness is considered comparable for the first two specific objectives, Option 3 is expected to be more effective than Option 2 in achieving the results under the third and the fourth objective (albeit at a substantially higher cost).

While all three options presented above respond to the four specific objectives of the initiative and the same substantive areas, they vary in their level of ambition and expected effectiveness. The legislative options 2 and 3 are expected to be more effective than Option 1 across the four objectives due to the differences in legal nature. In particular, Option 1 represents a cautious approach mindful of the local, cultural and historical circumstances in each Member State. The effectiveness of this option largely depends on the readiness and willingness of Member States and private parties concerned to implement the non-binding recommendations. In contrast, legally binding measures under Options 2 and 3 would guarantee the achievement of the expected policy results, in particular thanks to the generally-available compliance enforcement mechanisms, such as national courts in the Member States and infringement proceedings at the EU level.

As regards governance, there is a wide support for an oversight based on ERGA. Regulators and the media freedom community are in favour of reinforcing ERGA, while companies and business associations would rather keep it in its current form. Concerning the support structure for ERGA, all options covered by the public consultation received similar support. The highest number of respondents considered that ERGA should be assisted by an independent secretariat, followed by ERGA in its current status and ERGA assisted by a Commission secretariat.

Both large and SME media companies support EU-level action on state advertising and audience measurement. Small and micro companies express more support for EU action on media ownership transparency whereas, in comparison, large companies put more emphasis on the need to foster self-regulation.

Publishers, who are traditionally unregulated, are in favour of self-regulation and express a preference for a recommendation. They do however support measures on state advertising, audience measurement and protection of journalistic sources. Private broadcasters and publishers in particular plead for effective regulation of online platforms and warn against measures preventing market consolidation.

Private broadcasters are in favour of common principles for media pluralism measures and audience measurement transparency, objectivity and verifiability, on the latter aspect agreeing with publishers and advertising ecosystem players. They express caution against new burdens and advocate for better prominence of their content.

While public service broadcasters remind of the importance of Amsterdam Protocol, they largely support EU action to introduce safeguards for their own independence. They advocate for principle-based rules to safeguard independence of all media. They support specifically safeguards for editorial integrity and media plurality online and guidance on the appropriate prominence of audiovisual media services of general interest. On the latter issue, content distributors call for guidance in view of fragmented national approaches. Intermediaries are cautious about new regulatory burdens in this area.

The majority of NGOs identified the independence of public service media as the most important area for EU action. Citizens support in particular transparency and fairness in the allocation of state advertising and transparency of media ownership.

According to public authorities, the most useful areas of EU action would be regulatory cooperation to support common standards for media pluralism and media ownership transparency. They are also in favour of strengthening the role and resources of ERGA for further EU cooperation.

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 are supportive of a legislative proposal, regulating at least certain substantive areas. Among those stakeholders, there is a wide support for a principle-based approach as opposed to no action or detailed standard-setting.

Secondly, to further ensure transparent and fair allocation of economic resources in the internal media market, the legislative instrument would stipulate an obligation of external independent audit that would have to be ensured by all audience measurement service providers. Such providers would also be required to notify the methodologies of audience measurement systems to national media regulators. In the area of state advertising, it would require all media companies to submit to national media regulators the information on state advertising received. Moreover, national media regulators would be tasked to establish and maintain a registry on allocation of state advertising.

Firstly, when it comes to facilitating free provision of quality media services, on top of the legislative elements of option 2, the legal instrument would introduce requirements on balanced media coverage for all audiovisual media, including during elections. Regarding public service media, under this option, on top of the obligation of balanced media coverage of option 2, such media would be required to publish regular reports on how this obligation is fulfilled. Under this option, instead of a flexible recommendation on media independence foreseen under option 2, strict legal obligations would be introduced in this area. The legislative instrument would envisage uniform obligations for media companies to set up internal independence safeguards (with micro enterprises exempted from such rules). This would include mechanisms to (i) empower journalists within the corporate structure of media, (ii) ensure independent functioning of editorial teams and (iii) guarantee long-term investment in content production. Media companies would also be legally required to foster and adhere to self-regulatory mechanisms. Moreover, the legislative instrument would include obligations for Member States and media companies to ensure availability of (all) media ownership information, including on the interests and activities of media owners in other sectors. This would be coupled with the establishment of a centralised EU media ownership registry, covering all EU media service providers.

This option would encompass all the legislative elements of option 2. In addition, it would include further obligations for companies in the media market and regulators to foster the availability of quality media services and transparent/fair allocation of economic resources in the media market.

The independent office would also have its own tasks with an EU-wide dimension. These would include (i) monitoring and reporting on the media coverage of the European elections, building upon the Commission’s reports on elections to the European Parliament and (ii) taking appropriate actions to combat disinformation related to the activities of the Union.

Sub-option B: the Board would have the same role as under sub-option A - it would be the main actor in promoting the effective and consistent application of the substantive aspects of the new legislation. It would be assisted by an independent EU office, both for administrative and organisational as well as substantive aspects, e.g. conducting analytical or research-oriented tasks and/or providing technical expertise. The office would enjoy independence from the Commission and would be composed of experts with specialised knowledge of media regulation matters.

Sub-option A: the governance system would be based on the Board composed of senior representatives of the relevant national regulatory authorities (building on the current ERGA). It would be the main actor in charge of promoting the effective and consistent application of the legislative instrument. In its activities, the Board would be assisted by a secretariat, provided by the European Commission. The secretariat would provide administrative and organisational support to the Board. It would also assist the Board in carrying out its substantive tasks, e.g. by conducting analytical or research-oriented tasks.

To ensure transparent and fair allocation of economic resources in the internal media market, the legislative instrument would stipulate rules related to audience measurement and state advertising. For audience measurement systems, it would envisage requirements of transparency of their methodologies, impartiality, inclusiveness and verifiability. It would oblige providers of proprietary audience measurement systems to make available, at the request of third parties, information on the methodology of their systems. The Board would foster exchanges of best practices. Independent auditing of audience measurement systems would also be encouraged. Regarding state advertising, its allocation across the Member States would need to be subject to transparent, objective and non-discriminatory criteria. Availability of information on advertising spending, including amounts spent and beneficiaries, would need to be ensured.

The recommendation would encourage all media companies to deploy internal safeguards for editorial independence and include a catalogue of possible actions that they could take in this regard, within their corporate structures, based on best practices in the sector. Such actions could relate to (i) empowering journalists within the corporate structure of media, (ii) ensuring independent functioning of editorial teams and (iii) guaranteeing long-term investment in content production. It would encourage media companies to foster and adhere to self-regulatory instruments (codes of journalistic ethics) and bodies. The recommendation would also invite Member States and media companies to take actions to ensure availability of media ownership information, including on the interests and activities of media owners in other media or non-media economic sectors. The effective uptake of the recommendation would be monitored by the Commission (in cooperation with the Board) and as part of a general EU-level monitoring of risks to resilience of the internal media market.

To foster quality media services in the internal market, the legal instrument would provide for the protection of editorial independence and integrity of media (against interference by both public and private entities) as well as information requirements as regards the control over news media. To enhance the independent functioning of public service media, it would envisage a general principle of balanced media coverage by public service media and targeted safeguards related to their governance, namely to appointments and dismissals of their management. For journalists, it would stipulate a right of non-disclosure of journalistic sources, coupled with safeguards to ensure that such a right is not circumvented by public authorities, and provide safeguards against the deployment of surveillance software.

To facilitate free provision of quality media content in the internal market, this option would encompass legal principles on media independence and a right of non-disclosure of journalistic sources (contained in a legal instrument) and a recommendation on media independence (contained in a soft law instrument, covering the elements listed under points (iv), (v) and (vi) under option 1).

(III)A possibility for the Board to coordinate measures to protect the EU information space from third-country media services which threaten the Union’s public order and security. The Board would be empowered to coordinate national measures related to temporary restrictions to distribution of such media services, in full compliance of Article 52(1) of the Charter.

(II)Tasks for the Board to assist the Commission in drawing up guidance on technical or practical aspects of regulation relevant for media independence and pluralism, in view of reducing risks of divergent interpretations across the Member States.

(I)A mechanism for a structured cooperation between media regulators in all areas of EU media law to exchange information, solve cross-border issues and enforce EU media acquis (in particular when it comes to media players operating across borders e.g. video-sharing platforms). It would also foresee a mutual assistance mechanism for situations of serious media freedom or pluralism risks with a cross-border dimension, including to ensure effective cross-border enforcement of national restrictions to retransmission of audiovisual media services. In cases where a request for cooperation would not be addressed, the Board would act as a mediator in order to find an amicable solution. Ultimately, it would be able, in agreement with the Commission, to deliver opinions recommending actions to be taken by the concerned regulator in order to address the request.

In view of increasing regulatory cooperation and convergence in the internal media market, the legislative instrument would set up a framework for regulatory cooperation, convergence and collective action. This would include:

The national authorities would be required to seek the views of the Board on their draft opinions or decisions. The Board would be competent to deliver opinions on such draft decisions or opinions submitted by media authorities affecting the proper functioning of the internal media market. The authorities would be obliged to take utmost account of the opinions of the Board and provide explanations in case they would not follow them. Where there is no draft opinion or decision, the Board would be empowered, upon request of the Commission, to issue non-binding opinions on the transactions potentially affecting the proper functioning of the internal media market. The graph below presents how this framework would work in practice.

To foster cross-border activity and investment in the internal media market, the legislative instrument would envisage general requirements of transparency, proportionality and non-discrimination for national measures or decisions affecting the operation of media service providers in the internal market. These requirements would be drawn from the CJEU jurisprudence. It would also coordinate certain process requirements for national scrutiny of media market transactions. Independent media authorities would need to be involved in such scrutiny, and be able to issue an opinion or take a decision. They would carry out the analysis of the media pluralism impact based on common qualitative criteria, covering risks to media plurality and editorial integrity as well as media sustainability.

This option would consist of a legislative instrument and a recommendation on media independence. The legislative instrument would provide common rules for the internal market for media services, governed by an EU-level framework for structured cooperation between media regulators within the Board. This would be combined with a soft law instrument - a recommendation- which would encourage media companies and Member States to foster media independence and transparency.

In view of its effective uptake, the recommendation would envisage a specific monitoring and evaluation mechanism by the Commission. For this purpose, Member States would be invited to regularly submit to the Commission all relevant information on actions taken to implement the recommendation. The Commission, in consultation with ERGA, would also develop a set of key performance indicators that would allow to assess the uptake of the recommendation across the Union, by both Member States and companies in the media market.

The recommendation would be complementary to the existing international guidelines and recommendations, referred to in the baseline. It would have a more targeted character focusing on the actions in the three areas presented above. It would provide more detailed guidance in such areas and address some novel issues, such as internal safeguards for editorial independence within media companies, which are not yet covered by the international standards.

The recommendation would not envisage any action to increase regulatory cooperation and convergence in the internal media market, as the non-binding nature of the instrument would not be suitable to establish a framework for structured cooperation.

To ensure transparent and fair allocation of economic resources in the internal media market the recommendation would invite Member States to publish regular reports on the distribution of advertising resources to media and would recommend establishing tools, such as dedicated registries, to monitor state advertising expenditure. It would also invite relevant media market players (including those online) to be transparent, objective and inclusive in their audience measurement methodologies.

(VI)encourage Member States and media companies to step up actions to ensure availability of media ownership information, including on business activities or interests of media owners.

To foster cross-border activity and investment in the internal media market, the recommendation would invite Member States to follow certain standards with regard to national media pluralism measures/decisions (transparency, proportionality and non-discrimination) and media pluralism scrutiny procedures (involvement of media regulators in examination of media market transactions, recommended criteria for the analysis of the impact of such transactions on media pluralism).

This policy option envisages a recommendation encouraging Member States and, in certain areas, companies in the media market to implement a set of actions to promote media pluralism, editorial independence as well as transparency and fairness in the media market.

Option 3 Rules as in option 2 + Further obligations on transparency of audience measurement and transparency of and reporting on state advertising

Option 3 Principles/rules as in option 2 + Balanced media coverage obligations for all audiovisual media Reporting on balanced coverage by public service media Obligations on editorial independence for media companies Media ownership transparency requirements + EU-wide registry

The following table provides an overview of the policy options vis-à-vis the problems and objectives they aim to achieve:

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/fair allocation of economic resources in the media market

Interest of Member States and media companies to implement the Recommendation in view of ensuring compliance with the legal instrument

Approximation of core elements of national media frameworks that are relevant for the internal market, in full recognition of national regulatory traditions

The proper functioning of the legal provisions envisaged under options 2 and 3 would be ensured by a new governance structure based on the EU-level cooperation between national media regulators. All the options recognise the core principles of the AVMSD, including provisions on the independence of media regulators.

The specific measures envisaged by the options have been designed so that all the problems identified are tackled in a complementary manner in order to remove or minimise the sources of internal market obstacles faced by media service providers and the factors undermining the quality of media services as perceived by consumers. In particular, the measures under different options focus on both rules or administrative practices of public authorities in the Member States and practices of private parties affecting the functioning of the internal media market. The design of the measures under different options also takes account of: (i) the competence of Member State