WRITTEN QUESTION E-1775/02

by Antonios Trakatellis (PPE-DE) to the Commission

(24 June 2002)

Subject: Operation of the mass media: granting of broadcasting licences, State aid and advertising

Article 6 of the EU Treaty enshrines the principles of pluralism and freedom for the mass media. In spite of this, in Greece the National Broadcasting Council (ESR) is dragging its feet over the granting of licences to television channels and is not completing the institutional framework to govern their organisation and operation, in contravention of the above principles.

In view of the Protocol, annexed to the Amsterdam Treaty, on the system of public broadcasting in the Member States, and the provision of State aid to broadcasting services in Greece, could the Commission say:

1. In view of these events in Greece, how far is the principle of pluralism being complied with, and what action will the Commission take to ensure that steps taken by the National Broadcasting Council with regard to the framework for granting licences to television and radio stations conform to Community law?

2. What is the status of the funding of public broadcasting services in Greece and to what extent does the way the funding system operates have an effect on the harmonious functioning of the market; does it not create problems for competition as mentioned in the Protocol annexed to the Amsterdam Treaty on the system of public broadcasting in the Member States?

3. What is the level of State aid granted to the State and private mass media in the Member States, particularly in Greece, and to what extent does it run counter to the principle of equality and the rules governing the functioning of the market?

4. What level of State and private mass media revenue is derived from advertising as compared with the advertising market total in the 15 EU Member States, and in Greece in particular?

Answer given by Mr Bolkestein on behalf of the Commission

(29 July 2002)

1. The Commission is currently undertaking an examination of the granting of broadcasting licences in Greece, following a complaint. Since the granting of such licences often presents a rather complex situation, the Commission can not yet conclude at this stage whether any substantial problems in respect of Community law have arisen.

2. Greek legislation provides for the financing of the public broadcaster entrusted with a public service mission through public grants, a licence fee and other revenues linked mainly to the advertising.

In 1997, the Commission received a complaint according to which Greek authorities confer a preferential treatment to the public broadcaster, in that he is the only one to be financed from the license fee and in that its employees benefit from a particularly favourable pension scheme financed from a tax on advertising.

The Commission examines currently the above-mentioned measures in the light of the Communication on the application of State aid rules to public service broadcasting(1).

At this stage, the Commission cannot prejudge the outcome of its investigation.

3. The Commission does not have an exhaustive overview of the current levels of State funding in the Member States, but a few observations can be made. The amount of State support to broadcasters varies considerably in each Member State. The level of State support depends to a great extent upon the financing system Member States have chosen to compensate broadcasters for their public service tasks. In most Member States public broadcasters are financed through a dual financing system based on public grants and revenues from commercial activities (mainly advertising). In some Member States public broadcasters have legal restrictions regarding their possibilities to raise commercial revenue. In other Member States public and private broadcasters have to respect the same rules. Restrictions on the possibility to raise commercial revenues might increase the need for State funding, whilst at the same time cause less distortion of competition in the commercial markets (like the advertising market).

Member States are free to choose the means of financing public service broadcasting, but the Commission has to verify that State compensation for a defined public service is proportionate to the extra net costs.

The way in which the Commission assesses aid to broadcasters entrusted with public service obligations, be it public or private, is set out in the Commission's above-mentioned Communication.

State support to the public broadcasters is accepted when following conditions are satisfied:

- the establishment of a clear and precise definition of public service in broadcasting;

- the formal entrustment of the public service mission to one or more undertakings by means of an official act;

- the limitation of public funding to what is necessary for the fulfilment of the public service mission (proportionality). In so far as they receive State aids and develop also non-public service activities, public broadcasters are subject to the transparency requirements indicated in the so-called Transparency Directive(2). The separation of accounts provides the Commission with a necessary tool for examining alleged cross-subsidisation between public service activities and commercial activities. The obligation of separation of accounts does not apply to public service broadcasters whose activities are limited to the provision of services of general economic interest;

- furthermore it is desirable that an appropriated authority or appointed body monitor the application of these conditions.

4. According to the latest statistics published by the European Audiovisual Observatory in Strasbourg, the Community's advertising market in 2000 reached the level of EUR 67 164 million of which TV advertising represented about 38 %; radio advertising about 6 %, newspaper and magazines about 49 %, the rest being covered by cinema advertising and outdoor/transport means.

Concerning Greece, the relevant amounts are: total advertising: EUR 1 081 million, of which TV advertising represented about 50 %; radio advertising about 4 %, newspaper and magazines about 46 %.

With regard to the revenues of TV broadcasters, the same source indicates that at Community level in 2000 public service broadcasters (including radio) recorded revenues from advertising for a total of about EUR 5 487 million (20,8 % of total revenues). For the private broadcasters advertising revenues (including radio) amounted to EUR 20 196 million (56,2 % of total revenues). No detailed data concerning Greece are available.

(1) OJ C 320, 15.11.2001.

(2) Commission Directive 80/723/EEC of 25 June 1980, on the transparency of financial relations between Member States and public undertakings as amended by Commission Directive 85/413/EEC of 24 July 1985, Commission Directive 93/84/EEC of 30 September 1993 and Commission Directive 2000/52/EC of 26 July 2000, OJ L 195, 29.7.1980.