Opinion of the Economic and Social Committee on "Pluralism and concentration in the media"

(2000/C 140/07)

On 25 February 1999, the Economic and Social Committee, acting under the third paragraph of Rule 23 of its Rules of Procedure, decided to draw up an opinion on "Pluralism and concentration in the media".

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted an initial opinion on 23 November 1999. Following the decision of the plenary assembly to send the opinion back to the Section, the Section adopted a revised opinion on 9 March 2000. The rapporteur was Mr Decaillon.

At its 371st plenary session held on 29 and 30 March 2000 (meeting of 29 March) the Economic and Social Committee adopted the following opinion by 97 votes to 23, with 14 abstentions.

1. Introduction

1.1. The European media industry has entered a new phase in its development since the publication of the 1992 Green Paper on pluralism and media concentration and the Commission's thinking on media ownership in the internal market.

1.2. The traditional range of media services (TV, radio and press) has expanded over recent years to include new digital broadcasting (terrestrial, satellite and cable) and network (Internet, multimedia) services, widening the choice available to the European public considerably. These changes in the media landscape have been accompanied by increased links between sectors. As convergence is increasing, a parallel development is taking place as part of globalisation, in terms of alliances and mergers between media owners, telecommunication firms and IT operators.

1.3. In view of this globalisation and these market developments, the Committee invites the European Institutions to consider the need to publish a communication setting out guidelines and legal instruments that, with consideration given to the basic rights on freedom of expression, freedom of the press and freedom of media as well as the different media situations and different legal and cultural traditions in the Member States, can help to ensure that European public access to multiple, independent media services is not hampered.

1.4. In the light of these new sources of information and entertainment, and since information is more than just a commercial product, the Committee would stress the need to defend the basic rights of individuals, such as freedom of access to information and opinion, to protect minors, and to preserve human dignity, especially that of women.

1.5. The issues dealt with in this opinion fit into a context that is in a state of major and constant flux, and the Committee has borne this fact in mind in the comments that follow.

2. General comments

2.1. In its December 1997 Green Paper on the convergence of the telecommunications, media and information technology sectors, the European Commission acknowledges the growing number of alliances and mergers in the new information industry. While defending the principles of free competition, the Commission states its aim to oppose the abuse of dominant positions and restrictive agreements on the telecommunications, media and IT markets.

2.2. In the area of merger control, the Commission states its intention to safeguard, through the enforcement of competition law, consumer interests by securing a diverse supply of information sources, authorising mergers to encourage the establishment of strong European media companies, but also intervening to prevent agreements between operators that are likely to restrict competition, and thus limit the final consumers' choice.

2.3. Competition law often covers only the economic and financial aspects of mergers in the new media industry. The Committee, however, believes that cultural and social aspects must also be taken into account in order protect the interests of the European public and the rich diversity of the media landscape.

2.3.1. That is why the Committee believes that the application of Community competition law in the field of the information society should take into account not only purely economic aspects, but also the protection of pluralism in information, while safeguarding the freedom of the press recognised in the constitutions of the Member States.

2.4. The European institutions should support the wealth and diversity of culture, in its linguistic and ethnic forms in particular, that are present in the various countries of the European Union.

2.5. Laws in the Member States generally prescribe openness in media ownership, just like in other businesses, in order to preclude monopolies and oligopolies. It should therefore be noted that the European Commission in cooperation with Member States has the possibility to exchange such information in order to get an international perspective on holdings and technical or commercial agreements between audiovisual groups or operators providing access to the various networks, including the Internet.

2.6. The Committee also calls for consideration to be given to technological developments in the information society. Here, a distinction must be drawn between digital broadcasting services, which fall within the realm of traditional rules on media ownership, where such rules exist, and on-line services, for which competitive market rules must be given free rein to guarantee equal access for operators to networks and systems, and the consumers' right to a diverse range of content.

2.7. As the Commission's draft directive has not been adopted, the Committee would welcome the drafting of a communication, to establish guidelines and legal instruments designed to preserve pluralism with regard to the economic, social and cultural organisation of the industry.

2.8. The Committee would refer back to its two opinions of 14 September 1994(1) and 23 February 1995(2). The main recommendations made in those opinions must be extended to cover the new digital broadcasting services (terrestrial, satellite and cable), and nascent network audiovisual and information services (Internet and multimedia), to:

- encourage commercial radio and television stations and digital broadcasters to give greater consideration to diversity of opinion, pluralism and the broadcast of cultural and educational programmes, not least for minorities;

- promote the development of public television and radio stations as a source of independent information and of cultural, educational and light entertainment programmes, which should be accessible to all European citizens;

- maintain pluralism and prevent companies from abusing dominant positions in several sectors (digital and terrestrial television, radio, press, audiovisual and information services on the Internet, multimedia publishing) on one or more national markets or within the same language area;

- promote pluralism and prevent companies already abusing a dominant position in one national media sector from attaining a similar situation in another EU Member State;

- safeguard editorial independence throughout the media from internal and external pressure, including pressure from governments, in order to improve the quality and reliability of information;

- introduce appropriate legislation and competition rules to prevent companies from acquiring monopoly rights to retransmission and catalogues, in particular regarding sport-related information and film catalogues;

- recommend that before a media company that is already active in one media sector is allowed to operate in another media sector, all its holdings and cross-ownership arrangements are disclosed in full;

- promote training and objective information for the most vulnerable sections of the public, to enable them to access and recognise media industry content, particularly the information circulated on the Internet;

- clarify the editorial responsibility of Internet operators, drawing a clear distinction between website editors, who should - without any exceptions - be held liable for content, and technical intermediaries (carriers and hosts), who should be exempt from liability for content they have not prepared, as suggested by the European draft directive on certain legal aspects of electronic commerce in the single market;

- draw up a European media code of good conduct. In addition to the control of media company power, this code should provide for the analysis of consumer requirements, bearing in mind, in particular, the maintenance and safeguarding of the freedom of information and opinions, the protection of minors against violent and pornographic programmes and their restriction on grounds of human - particularly female - dignity and the prohibition of the glorification of war and crime;

- recommend the "labelling" of information and entertainment sites on the Internet, in order to protect Internet users from illegal content. The Committee hopes to prepare an own-initiative opinion on this matter during this year, thus enabling it to clarify these ideas.

2.9. Genuine coordination to guarantee pluralism

2.9.1. In view of the swift advent of Internet audiovisual and information services, access, regulations and the associated pluralism safeguards are all issues that should be addressed. The remit of regulatory bodies present in the majority of the Member States should be extended to cover the Internet, with a view to protecting basic individual rights in the same way as for the traditional media. Community level coordination may also prove beneficial, as explained in 2.3 above.

2.9.2. The audience criterion mooted by the Commission in its early findings should be seen as additional to the other criteria generally included in national legislation, where such legislation exists, relating to admissible percentage holdings in media companies.

2.9.3. Portal sites, Internet access points provided by operators up- and down-stream of the Internet, and often belonging to major communications, publishing and IT-groups, meanwhile tend to concentrate available information and favour supply from partners or sites within the same group. It is therefore important that consumers are made aware of the freedom of choice that is offered by electronic programme guides and the technical option of "zapping" from one portal site to another, in order to avoid the risks to pluralism and diversity of information.

2.9.4. On the subject of financial resources, current market analysis shows that in some countries advertising facilities are heavily dominated by the handful of groups present in the audiovisual and new information and communication technology sectors. The Committee notes that in the long run this situation could prove prejudicial to local radio and television stations. The net result of this dominance combined with the portal sites described above could be to limit or even skew the final consumer's choice.

2.9.5. Finally, an analysis of pluralism and concentration in the media would be incomplete without taking into account the digital revolution in television and the associated channel packages. This major technological development raises a variety of issues such as the allocation of frequencies, likely to favour first-comers, and the increased power of operators controlling vast arrays of channels (although the channel package does enhance pluralism). This raises the issue of decoders, as although they are now open to various packages of scrambled channels they are linked to payment, which could generate guaranteed incomes deriving from market position.

2.9.6. In the same vein, the imminent advent of digital radio also deserves a mention, as although it marks a positive step forward technically (radio quality, stability of reception, means of delivering urgent safety messages, etc.), it looks likely to involve higher levels of investment than those currently required for radio using frequency modulation, particularly at regional or local level; the radio landscape could end up the poorer as a result.

2.9.7. Still in the area of broadcasting, the Committee notes that satellite broadcasting is controlled by groups, which are able to finance this international resource and therefore are not subject to national regulations. The Committee would point out that there is very little political coordination of satellite launches yet. The Committee would like to see political coordination within the EU to remedy that situation.

2.9.8. The Committee underlines the importance of the basic and applied research measures listed in the fifth RTD framework programme (1998-2002), with a view to improving the operability, ease of use and accessibility of future information products and services. This research and its applications are strengthening linguistic and cultural diversity, contributing to the development and enjoyment of European cultural heritage, stimulating creativity, improving education and training systems and furthering socio-economic and technological models that enable the presentation of information.

2.9.9. Finally, the Committee hopes that the findings of the United Nations Development Programme report on Internet access will be evaluated in the light of the EU's structural policies and external negotiations, ACP agreements in particular.

3. Proposals

3.1. Against a backdrop of globalisation and digital convergence, the issue of media pluralism and concentration raises a large number of questions. The Economic and Social Committee will attempt to outline some answers.

3.2. On the question of media ownership rules, the Committee would recommend identifying common parameters in the national criteria currently in force and adding others such as audience and resource control. It should, however, also be noted that all such parameters must take into account differences in legal, especially constitutional, and cultural traditions in all Member States.

3.3. Taking the above point one step further, the Committee would recommend that Member States consider whether current national media ownership rules (licence schemes, frequency allocation, audience-based thresholds, investments, etc.), where such exist, should be extended to the new digital broadcasting services (terrestrial, satellite and cable) in order to prevent the eventual risk of abusive mergers. There should also be coordination at European level, particularly in the event of very strong international growth.

3.4. The Committee would also recommend that the Commission coordinate the national media regulatory bodies, following in the footsteps of the contact committee set up in the DG concerned to manage the "Television without Frontiers" directive. This would enable the flexible, rapid and practical examination of draft agreements, questions relating to frequency allocation and any matters relating to access to scrambled channels requiring a decoder, which should work for other channel packages, etc.

3.5. As for Internet audiovisual and information services, the Committee would like Internet users to benefit from safeguards on pluralism and diversity. In view of the rapid development of these services, the Committee asks the European Commission to draft a recommendation addressed to the Member States, inviting them to consider whether national regulations on the audiovisual sector should be adapted to cover these new sources of information. Member States should also be invited to share information on these eventual developments within the informal networks that are mentioned in point 3.4.

3.6. In its opinion(3) on the Council Recommendation on "the protection of minors and human dignity in audiovisual and information services" of 24 September 1998, the Committee urged that national media regulatory bodies ensure the measures in the recommendation are applied strictly in the Member States. The Committee would, however, also like to stress that the measures in the recommendation, must be applied with respect and consideration for the legal, constitutional and cultural traditions in the different Member States.

3.7. Consideration must also be given to "portal sites", which tend to funnel and standardise the information available, to ensure such sites are not used to corner access to information sources or financial resources linked to advertising. One option would be to extend the powers of Member State regulators to cover these new services so as to promote pluralism and diversity in information, with Commission-level coordination.

3.8. Furthermore, the profusion of information sources on the Internet, and difficulties in identifying their origins, can confuse the public. Solutions must therefore be found quickly to enable the public to identify the information available. One idea may be to introduce a "European label" to denote quality of information and professional standards for information and entertainment sites, by means of industry self-regulation, in order to safeguard pluralist and independent information and to outlaw illicit content. On this point it is worth mentioning the responsibility of news agencies, with particular regard to their codes of conduct.

3.9. On the subject of editorial responsibility in the media, the Committee recalls the 19 January 1999 recommendations of the Council of Europe. The Committee notes that the issue of independence of media editors and journalists by means of "editorial statutes", in order to prevent owners or shareholders, as well as external bodies like governments, from influencing information content, is solved differently throughout the Member States; sometimes through constitutional legislation, sometimes through self-regulatory agreements. To ensure a high quality of information, it is advisable for media professionals (e.g. media companies, owners, editors and journalists) to adopt ethical standards (e.g. code of good practice, code of ethics). It is also important that all media professionals are provided with training in order to take on that responsibility.

3.10. The Committee takes the view that the current existence and growth of local radio, with frequency modulation, makes for pluralism and greater accommodation of local sociological circumstances. It would, however, invite the Commission and the Council to pay attention to whether the arrival of digital radio will have an impact on the pluralism of local radio and diversity of information in local radio, due to heavier financial investments required by local operators.

3.11. As for the possible social consequences of company mergers and acquisitions in the area of the media and related technologies, Regulation (EEC) No 4064/89 states that where employees' representatives have a legitimate interest regarding a Commission decision on the compatibility of a merger or acquisition with the Treaty of Rome they may be heard by the Commission. This procedure is rarely used. It would surely be worthwhile conducting a training and information campaign to enable national union bodies or European works councils to use the opportunity provided by Regulation (EEC) No 4064/89 to make their voices heard more clearly by the Commission.

4. Conclusion

4.1. With the challenge of the information society and the need to safeguard basic individual rights such as freedom of expression and freedom of information and opinion, and to protect minors and human - particularly female - dignity, the Economic and Social Committee proposes that the European Institutions prepare guidelines that take account of the requirements of pluralism, respecting the differences between the Member States. Such guidelines could be designed to complement competition law by focusing on the social dimension and cultural diversity of the media.

4.2. This communication would be designed to complement competition law by focusing on the social dimension and cultural diversity of the media. It would help to guarantee the pluralism of media content and programmes and its guidelines would show the operators of large communications groups the way to preserve the diversity and wealth of content accessible to the public.

Brussels, 29 March 2000.

The President

of the Economic and Social Committee

Beatrice Rangoni Machiavelli

(1) Opinion of the ESC on the Green Paper on Strategy options to strengthen the European programme industry in the context of the audiovisual policy of the European Union (COM(94) 96 final); OJ C 393, 31.12.1994, p. 25.

(2) Opinion of the ESC on the Communication from the Commission to the Council and the European Parliament - 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 (COM(94) 353 final); OJ C 110, 2.5.1995, p. 53.

(3) OJ C 214, 10.7.1998, pp. 25 and 29.

APPENDIX

to the Opinion of the Economic and Social Committee

The following proposed amendment, which was supported by more than a quarter of the votes cast, was rejected by the Committee at its plenary session:

Point 3.11

Delete the last two sentences:

Reasons

The last two sentences should be deleted as there is no need - or justification - for special training and information campaigns directed to national union bodies or European works councils.

Results of the vote

For: 35, against: 71, abstentions: 15.