Opinion on the communication from the Commission on the follow-up to the consultation process relating to the Green Paper on 'Pluralism and media concentration in the internal market - An assessment of the need for Community action` (96/C 100/13)

At its meeting on 5 December 1994, the Bureau of the Committee of the Regions instructed Subcommission 3 to draw up an Opinion on the above-mentioned communication.

Subcommission 3 drew up its Opinion on 22 March 1995. The Rapporteur was Mr Lazaridis. Commission 7 drew up a supplementary Opinion on 10 March 1995. The Rapporteur was Mr Sileoni.

At its 8th Plenary Session on 19 July 1995, the Committee of the Regions adopted the following Opinion, to which the supplementary Opinion of Commission 7 is appended.

INTRODUCTION

The media is not just one of the many channels for conveying information, it is also a distinctive aspect of modern society.

Television, radio and the press function not only as the chief sources of information, but also as the most basic accessible sources of entertainment and the most widespread forms of education.

Therefore, anything to do with politics, ideologies, outlooks on life, stereotypes and behaviour is mainly conveyed through the media.

The media is therefore acknowledged as being a fundamental feature of modern society and, at the same time, a potential danger to it.

This is because print and electronic media constitute something more than just economic activity and cultural creation. The media instil certain ways of looking at things, performing a pre-eminently political function.

This is particularly true in the case of the printed or audiovisual product which does not declare its political identity, appearing to be 'innocent` and 'impartial` on political matters; yet it commands a very high readership or audience and forms the aesthetic, cultural, institutional and ultimately political framework within which we move. It shapes our image of society.

We should therefore approach such phenomena with caution on many levels - economic, aesthetic, national - and, ultimately, a suspicion of the established order and politics.

Modern society is already more diverse and varied in its stratification, with all kinds of conflicting interests. One of the developments which has raised awareness of the problem is the abolition of the state radio and television monopoly.

The ensuing pluralism, both in terms of organization and operators, made it impossible to apply the existing legislation, particularly to prevent concentrations of several radio and TV media or majority shareholding in the same medium by one individual or his relatives, to regulate how such shareholders acquire the economic resources at their disposal, to protect intellectual property, and to ensure that internationally accepted codes of ethics are respected, etc.

Clearly, there is an overall consensus on the general principles, such as pluralism, free and equal access to sources of information and the need to exploit and confront the rapid developments in technology. However, the more acute problem, the one which provokes reaction and the one which is at the heart of the interplay of social forces, is the problem of privately-owned media concentration.

By concentration is meant not just the concentration of capital and media, but also across-the-board concentration of outlooks and conceptions, through the sameness of the programmes on offer.

Amid this social, political and institutional evolution, the public sector - public broadcasting - provides some genuine elements of pluralism within the prevailing communication system of societies with democratic and pluralistic political systems. So in taking any action, it must be borne in mind that public broadcasting also has an exemplary role to play as a provider of pluralism, in addition to its purely competitive role.

Of course, the problem of concentration is neither national, nor European, but international - a fact which has provoked intense debate within both the EU and the Council of Europe. This debate was set out in the Green Paper on 'Pluralism and media concentration in the internal market - An assessment of the need for Community action` drawn up by the European Commission. The Green Paper undertakes an initial assessment of the need to propose Community-level action on concentration and pluralism in the media (television, radio, press), as well as presenting the various solutions which the Commission could implement once it has assembled the views of interested parties.

At the request of the European Parliament and some of the interests concerned, in January 1993 the Commission asked all interested parties to participate in a wide-ranging consultation process on the basis of the Green Paper on pluralism and media concentration.

The communication from the Commission to the Council and the European Parliament entitled 'Follow-up to the consultation process relating to the Green Paper on "Pluralism and media concentration in the internal market - An assessment of the need for Community action"` is an initial report on this consultation.

The present Commission communication is an initial response to the report by the High Level Group ('Bangemann Group`) set up by the European Council to submit proposals on the information society. That report highlights among other things the detrimental effects on the internal market of the disparities between national rules on media ownership.

During the consultation process opinions were received from the European Parliament, the Economic and Social Committee, the Member States, individual operators and the associations representing them. The opinion of the COR was not sought, which we note with regret. The COR Bureau decided to submit the present recommendations in the form of an Own-initiative Opinion.

HAVING REGARD TO

I. The Commission position:

1. The aim of the Commission initiative was to create the necessary conditions for exploiting the opportunities afforded by completion of the internal market, which it sees as both a necessity and an opportunity, with particular reference to the freedom of establishment for media companies and the free movement of their services.

2. The Commission recognizes that the differences in national regulations on media ownership have created barriers to the functioning of the internal market. This view was crystallized after the first round of consultations, during which it became apparent that these barriers to the functioning of the internal market stem from the fact that the strategies adopted by operators are, in most cases, still national.

3. Although in its initial position the Commission states that any need for action on the part of the Community has more to do with ensuring that the internal market functions properly than with maintaining pluralism as such, in the conclusions from the first round of consultations, it acknowledges the need to reject its initial position on media pluralism because of the issues at stake. However, in the first instance, protecting pluralism as such is the duty of the Member States. In working towards its objectives and exercising its powers, the Community must ensure that pluralism is not adversely affected by its activities and the way it exercises its powers.

- Ultimately, the Commission does not seem to see a need for Community intervention, as national mechanisms to protect pluralism can be applied with a Community dimension. However, there may be some overlap in the area without borders because of the various national regulatory frameworks and the differences between them.

These laws restrict access to media activities and ownership, while in the Commission's view, they should facilitate the smooth functioning of the internal market and the competitiveness of the media, which is necessary for pluralism.

- Ownership restrictions are not incompatible with Community law as they are in the public interest and are non-discriminatory, except in the case of provisions on foreign ownership which are not compatible with the Treaty because they are discriminatory.

Media ownership restrictions cannot be replaced by simply applying general competition law and, particularly at Community level, the merger control Regulation. The merger control Regulation can prevent concentrations which affect pluralism only in so far as they also affect competition, which is not always the case.

4. National laws on media ownership are already evolving in some Member States, or will evolve, under pressure from the new circumstances which are being created. These laws are uncoordinated and lead to fragmentation of the internal market.

They may also be ineffective and counterproductive, hindering the economic development of media operators. Such economic development is essential for pluralism and transnational movement of media operators' services.

The legal uncertainty stemming from the current regulatory patchwork across the various Member States has discouraged investment in European media.

5. The aim is still to maintain pluralism, to prevent media concentrations, and to provide the maximum legal certainty needed for investment in the media sector and a safety net preventing cases of concentration which threaten pluralism and which cannot be combatted by the traditional rules of competition law.

A stable legal framework is therefore required which would not weaken the protection of pluralism in the Member States and which would guarantee an equivalent level of protection within the EU by limiting the regulations to the absolute minimum needed to achieve the goals mentioned above (subsidiarity principle).

6. When considering concentration, two criteria are mentioned:

a) the actual audience criterion, and

b) the media controller criterion, as well as the need to determine the categories of person (individuals or legal entities) who cannot become a media controller (disqualified persons).

7. Whilst coming out in favour of the third option (issuing a Directive or Regulation), the Commission does not take a clear stance for the time being on the need to set up an independent European committee to achieve Community objectives, although it sees it as preferable to use the Directive as a means of expressing the EU's initiative.

8. The Commission proposed three alternatives and requested the views of interested parties on these:

a) taking no action;

b) proposing a recommendation to enhance transparency;

c) proposing harmonization of national restrictions on media ownership by a Directive or Regulation.

II. The position of the European Parliament on the Green Paper passed on 20 January 1994 and the Resolution passed on 27 October 1994:

The European Parliament

1. regards pluralism of the press and information on radio and television as a key feature of our democratic system and considers it necessary to preserve media independence in every democratic state. Any legislation on concentration in the media sector must take into consideration not only the economic dimension but also the cultural dimension, the social impact and the moral and political implications, in order to guarantee the necessary pluralism. The quality and diversity of this sector lie at the very heart of our democratic system;

2. expresses the view that Community action in the field of media concentration is necessary not only to create an internal market and a 'level playing field` for the media industry, but also and above all, in order to harmonize national legislation on the media at a high level with the objective of creating and maintaining a diverse and pluralistic forum of opinion in the media which is in the interest of Europe's citizens;

3. comes out in favour of Option III combined with a Directive and the creation of an independent consultative committee, or European media council, with the aim of firstly harmonizing national restrictions on media concentration and secondly enabling the Community to intervene in the event of concentration which endangers pluralism on a European scale;

4. calls on the Commission to include in its proposals:

a) a draft Directive on the right of access to information from Community and national authorities, along the lines of the US Freedom of Information Act;

b) a European media code to maintain professional ethics, which should ideally be drawn up by the parties concerned;

c) a framework Directive safeguarding journalistic and editorial independence in all media.

It is important to point out that the second EP Resolution is dominated by the political, cultural and social dimension of the issue and clearly demonstrates the profound concern that the issue of media concentration and pluralism might be reduced to a simple question of economics and the internal market.

III. The ESC Opinion on the Green Paper issued on 22 September 1993 recognizes the need for Community action to protect pluralism and to control concentrations with a view to preventing the creation of monopolies:

The ESC proposes that the Commission should take action to secure an international agreement beyond EU borders to ensure that, with the advent of satellite programmes, similar action is taken in third countries.

The ESC seems to be in favour of creating a European Media Council, or an administrative body for the media comprising independent experts and representatives of social and political groups. This would be a consultative body.

The ESC is also in favour of the Commission issuing a Directive and of drawing up a European media code.

IV. The positions of the Member States which emerged from the questionnaire sent by the Commission to the Member States in July 1993, namely that:

a) there is no need that justifies Option II (transparency recommendation) because there are no real difficulties in exchanging information on the transparency of media ownership;

b) as regards the choice between Option I (no action) and Option III (Directive or Regulation), Member States decided to 'wait and see` pending the results of consultations with the interests concerned.

V. The views of the private-sector operators concerned, as collated and assessed by the Commission, from which it emerges that the majority of operators are against Option I (no action) and in favour of changing the current regulatory framework on media ownership, though the question of the level - national or European - at which change must occur is the subject of vague or divided positions. These positions, which relate to different ways of dealing with globalization and the impact of new technologies, fall into five categories depending on the operators concerned and on:

a) whether they have a European or national strategy of establishment;

b) the diversity of the media under their control;

c) their country of origin and whether it has an open market or a closed market;

d) whether they are new entrants or established operators;

e) whether they are pursuing a short or long-term strategy.

In any event, the operators' reasoning is mainly or exclusively concerned with exploiting the opportunities of the internal market, with particular regard to freedom of establishment for media companies, free movement of media services, legal certainty, which is essential for investment in the media sector, and the creation of a uniform and stable framework which will facilitate the development of these companies and boost their competitiveness.

VI. The fact that the COR Plenary Session of 1 and 2 February 1995 touched upon this subject, as did Commission 3 as part of its brief (Rapporteur: Mr Leguina Herran) and Commission 7 (Rapporteur: Mr Dammeyer):

Commission 3 expressed the following views, amongst others, which were confirmed by a decision of the COR Plenary Assembly on 12 February 1995.

'The COR is aware that the information society arouses fear of the unknown as well as hope. For this reason it firmly supports the Commission's idea to evaluate the impact of these new technologies on social, economic and regional cohesion.

It considers that the principle of ensuring universal provision of essential public information regardless of the citizen's ability to pay should be embraced by local and regional bodies in preparing for and consolidating the information society.

It would point out that the relevant powers of the Member States, particularly their powers to regulate the media and broadcasting, must be preserved.

The question of media ownership merits particular attention. The Member States still have the power to legislate on this matter.`

Commission 7 held more extensive and useful discussions on the subject - though these were not complete - centring on fears that media policy would end up as a mere appendage to a telecommunications policy, and concern that the media would be seen merely as businesses capable of generating added value and creating jobs like any other. In this event the Community has an obligation to ensure fair terms of competition in the internal market which would allow these businesses to expand and reach gigantic proportions within the internal market, boosting their competitiveness in the global environment, while their true vocation would be subordinated and insufficient account taken of their catalytic power. The recommendations in question were also adopted at the 6th COR Plenary Session held on 1 and 2 February 1995.

Commission 6 also drew up a supplementary Opinion (Rapporteur: Mr Sileoni), which was unanimously adopted at the meeting held on 10 March 1995. It is based on the same principles as the main Opinion. The two Rapporteurs feel that it should be incorporated in the present Opinion.

CONCLUSIONS

THE COMMITTEE OF THE REGIONS:

1. expresses its satisfaction that the Commission has almost completed the consultation procedure and will soon lay down the framework for Community action in the field of pluralism and media concentration in the internal market;

2. at the same time expresses regret that the COR was not invited to take part in this process, and restates its demand that the regions should be permanently involved in all consultations on further developments in the field of pluralism and media concentration in the internal market;

3. also expresses regret that in the Commission communication the Member States' opinions are presented inadequately - especially when compared with the presentation of the views of interested groupings;

4. feels that the position and operation of the media is primarily a topical issue affecting democracy itself and less an internal market problem, given that the internal market machinery alone cannot guarantee pluralism;

5. feels that we must acknowledge the social and catalytic role of the media in shaping mentalities and stereotypes, be aware of and confront the degree of political influence which the media exercises, protect and maintain conditions in political life based on pluralism and create true pluralism in the media and not an illusion of pluralism, which is in fact nothing more than the constant repetition of the same words and selected information and scenes.

We must ensure that the privacy and individuality of citizens are respected, and that those affected by the machinations of media power are guaranteed the right to reply;

6. believes that the development of technology contributes to the concentration of economic power;

7. notes that media companies, whether involved in culture, advertising, telecommunications or otherwise, are already interlinked and combine to form groups with enormous economic and political power, thereby wielding a significant influence on political authority, which relies more and more on their help, since the position of political authority in modern society actually depends on the direct or indirect publicity it receives. Furthermore, the perceptions of consumers are to a large extent primed and, though they have more information at their disposal, their knowledge is largely prefabricated.

Particularly in the case of electronic media (radio, television) it is true to say that these are not just an extension of the press, but perhaps the most distinctive feature of modern society which seemingly bind it together. They are the citizen's daily 'window` on society as a whole. They are the most important conduit for instilling ideologies, shaping mentalities, setting models of behaviour and political influence;

8. points out that there is a danger that the information society could develop into a society of indoctrination, and that our freedom could become a theoretical principle. This danger is growing as the concentration of media ownership increases and groups of related and interlinked activities are formed, often in the name of vertical investment and improving competitiveness in the internal and global market;

9. agrees with the Commission that for any intervention aimed at controlling concentrations, it is useful to have recourse to a) the actual audience criterion, combined with a criterion based on the number of stations controlled by the same person, and b) the media controller criterion, which the Commission has already set about defining by carrying out a study on the subject;

10. also considers it essential to define the categories of persons who may not acquire media control because of their functions or activities;

11. agrees, on the other hand, with the Commission that Member States' actions to regulate the field of media company establishment and concentration and the movement of their products, and to protect pluralism, evolving as they are in an uncoordinated manner, have a detrimental effect on the internal market because of the disparities between them. This threatens to reduce the free movement of media services between the Member States and to limit the freedom of establishment for media companies, producing legal uncertainty which discourages investment in this field, thus undermining European companies' ability to stand up to 'attack` from all-powerful non-European media companies;

12. therefore feels that we must also tackle the problem of levelling out the internal market by harmonizing national legislation within a uniform, clear and stable regulatory framework, so as to facilitate investment and ensure freedom of establishment for European companies and the movement of programmes within the Community. Nonetheless, it is necessary to respect the competences of the Member States and the regions, avoiding any unnecessary centralization under the subsidiarity principle.

At the same time measures must be taken to prevent excessive media concentration because liberalization cannot be achieved at the expense of public services which are protected by national monopolies, nor can the internal market be levelled out at the expense of pluralism;

13. feels that public broadcasting, which has a primarily cultural and social rather than commercial role, must be protected provided that it is pluralistic;

also feels that interventions against monopoly and media concentration must not jeopardize governmental control through licences or declaration procedures, etc., in order to guarantee a strong public service sector within the media;

14. expresses the view that codes of conduct for journalists should not be laid down by legislation. Instead the parties concerned should be encouraged to create such rules on a voluntary basis;

15. states that laws relating to the freedom of the press and to pluralism and media concentration should primarily be a concern of national interests but that the EU should intervene against media concentration at European level;

16. shares the Parliament's view that media concentration and cross-ownership are increasing in the Community and, once established, such cross-ownership, where it reduces diversity of opinion, is difficult to reverse;

17. thinks that to ensure all the above, there is no need to create a European control authority to which to transfer the 'duties of the Commission and the Member States`, and feels that decentralized control is a more appropriate solution, provided that state and regional bodies take coordinated action where this is necessary;

18. thinks, however, that it is necessary to examine the possibility of setting up and running a permanent European consultative body to deal with questions of pluralism and concentration of media ownership. The regions of the EU, local authorities and associations of users should be assured a presence and significant role on this body as they are the nearest authority to the citizen/consumer;

19. agrees with the European Parliament that the Commission should issue a Directive regulating and ensuring all that has been set out above; the Committee feels that this action should be supplemented in the near future by setting up a European media code to protect professional ethics, by drafting a framework for journalistic independence in all media and by issuing a Directive on the right of access to information from Community and national authorities, along the lines of the US Freedom of Information Act.

Done at Brussels, 19 July 1995.

The Chairman of the Committee of the Regions

Jacques BLANC

APPENDIX

Supplementary Opinion of the Committee of the Regions

On 5 December 1994, the Committee of the Regions, acting under Article 198c of the Treaty establishing the European Community and Rule 9(1) of its Rules of Procedure, decided to draw up a supplementary Opinion on the above-mentioned communication.

Commission 7 for Citizens' Europe, Research, Culture, Youth and Consumers of the Committee of the Regions, which was responsible for preparing the Committee's work on the subject, adopted its supplementary Opinion on 10 March 1995, by a majority vote with one abstention.

The Rapporteur was Mr Sileoni (I).

At its 8th Plenary Session held on 19 and 20 July (meeting of 19 July 1995), the Committee of the Regions adopted the following supplementary Opinion of Commission 7, which is appended to the Opinion drawn up by Commission 3, to which the main referral had been made.

1. Introduction

THE COMMITTEE OF THE REGIONS:

Having regard to the Commission's Green Paper on pluralism and media concentration in the internal market ();

Having regard to the report on Europe and the global information society by the High Level Group ('Bangemann Group`) set up by the European Council to submit proposals on the information society;

Having regard to the Commission communication on 'Europe's way to the information society - An action plan` (), and to the Committee's Opinion () adopted at the Plenary Session held on 1 and 2 February 1995;

Whereas since the 1980s, all Member States have introduced rules on media ownership, which vary in their provisions but have the common aim of limiting operators' freedom, in order to preserve pluralism;

Whereas the current rules on media ownership need to be amended, particularly in response to globalization and the impact of the new technologies;

Whereas there are real obstacles to the freedoms of the internal market, and whereas the differing new rules being drawn up in several Member States have created new dangers of fragmentation in the internal market;

Whereas the internal market may, in the media sector, create new jobs and promote cultural pluralism, which will lead to an increase in training opportunities, while at the same time underpinning research and development;

Having regard to the Resolutions adopted by the European Parliament on 15 February 1990 on concentration in the media sector, and on 16 September 1992 on media concentration and pluralism of opinions in Europe;

Whereas there are risks involved in one operator controlling the media at a regional or local level, particularly with respect to democratic pluralism, cultural diversity and the quality of the media itself;

Whereas pluralism in communications is a key element in European Union integration in terms of democracy and respect for the fundamental rights of the citizens of Europe, in accordance with the principles set out in Article F of the Treaty on European Union;

Having regard to the US Freedom of Information Act, supplemented by a future Declaration of Citizens' Rights to receive impartial information which would guarantee pluralism based on the interaction between market freedom and the public service principle;

Whereas we are moving swiftly towards an 'information society`, and whereas its repercussions in the media sector need to be borne in mind by the Community, while fully respecting the principle of subsidiarity;

Whereas media concentration jeopardizes the development of the different languages in the Member States and, in particular, linguistic minorities,

makes the following comments.

2. General comments

2.1. The Committee of the Regions welcomes the consultation process that the European Commission has used in the follow-up to the Green Paper on 'Pluralism and media concentration in the internal market - An assessment of the need for Community action`.

The Committee takes the view that this second round of consultation undertaken by the Commission with all the interested parties, working closely with the Member States, is both necessary and useful, bearing in mind the advances in new technologies and the stakes associated with media pluralism.

2.2. Regarding the possible need for a Community Directive to regulate pluralism and media concentration in the internal market, the COR takes the view - already expressed by the European Parliament and the Economic and Social Committee - that Option III in the Green Paper should be chosen, bearing in mind the ideas expressed in point 2.3.

Firstly, Option I would not remove the current disparity in national rules which is creating, among other things, widespread legal uncertainty, jeopardizing the steady development of the internal market and the protection of media pluralism.

Secondly, it notes that the Member States appear not to favour Option II, since it is unclear how merely by increasing the exchange of information between States - as set out in Option II - these disparities could be removed.

2.3. The COR upholds the principle of safeguarding pluralism as a Community objective. This justifies culture-related improvements to measures aimed at ensuring that the internal market runs smoothly, particularly where the media are concerned.

Harmonization in certain parts of the television sector has hitherto stemmed mainly from the Directive on television without frontiers, the objective of which is to press forward with a free market in television programmes. Such harmonization is already making demands on small communities which could threaten the existence and development of broadcasting organizations - transmitters of our cultural identity - throughout Europe.

Further harmonization in the area of media ownership control - aiming to safeguard pluralism while at the same time attempting to limit the protection mechanisms which all Member States have introduced - may make the defence of the cultural identities of States, communities and regions even more difficult.

The choice of Option III should, therefore, include guarantees regarding the protection of aims in the general interest as set out above.

2.4. Option III was also selected for the following reasons:

2.4.1. There is a real risk that this disparity in national rules renders them incapable of guaranteeing continued pluralism;

2.4.2. Regulatory disparity discourages new investment in the media sector and exacerbates differences between enterprises which are already in a position of strength and those which are new to this sector. This produces the 'fief` effect;

2.4.3. The advent of the new technologies, which both leads to and requires the crossing of national boundaries, thus making the current disparate and fragmented regulatory framework insufficient;

2.4.4. As this change is in the offing, the time is ripe to implement Community legislation both to plan for and regulate the effects that this change might bring about in the future;

2.4.5. The possibility of a Community Directive which would help to enhance the value of the European Union.

3. Specific comments

The COR supports a Community Directive which incorporates the above comments.

Its support, however, depends on the inclusion of the conditions outlined in point 2.3.

In view of the continual advances in technology in this area and possible future alterations to standards in third countries, for the sake of a proper balance and consistency the Committee also proposes incorporating adequate machinery for periodically updating the standards arising from this Directive.

It recommends that in its draft, the European Commission make provision for:

3.1. Respect for the principle of subsidiarity and protection and promotion of local culture and indigenous languages;

3.2. A clarification of 'regulatory certainty` to give operators from different countries a level playing-field for business investment;

3.3. The creation of a 'European Media Council` on which media users - the real audience and as such the real interest group - would be duly represented;

3.4. The preparation of a list of evaluation criteria to go with those of the real audience, as envisaged in the Green Paper, with quantitative and economic parameters;

3.5. Coverage of the entire communications sector - including the press - which is the only way to properly evaluate and to limit real multimedia concentration;

3.6. A code of ethics for journalists and others working in the field of information, since protecting pluralism also depends on those responsible for managing that information;

3.7. Consideration of the specific character of public or non profit-making broadcasting companies (perhaps allowing them more flexible parameters), so that they are not penalized insofar as they might be seen to encourage excessive concentration to the detriment of genuine pluralism and compliance with the rules of competition.

() COM(92) 480 final.

() COM(94) 347 final.

() OJ No C 210,14. 8. 1995, p. 109.