WRITTEN QUESTION E-3653/00

by Elly Plooij-van Gorsel (ELDR) to the Commission

(23 November 2000)

Subject: The Dutch Media Act and competition between public and commercial radio stations

In order to prevent media concentration in (commercial) radio, Article 82f of the Dutch Media Act prohibits commercial suppliers from participating in more than one frequency package simultaneously. In contrast to public broadcasting, they are not allowed to offer combinations of air time for advertising. However, because of combination sales the public radio stations receive 42 % of the market's total spending on advertising. This is because the five radio stations combine to sell advertising time and they offer advertisers combinations of air times on the different stations. Public broadcasting receives most revenue on the popular radio 3 station which is used to subsidise other public stations.

1. Does the Commission think that determining dominant market positions depends not only on the position of commercial radio stations but also on that of public stations?

2. Does the Commission agree that the distinction made by the Media Act between public and commercial broadcasting in respect of advertising sales results in uneven competition between the public and commercial radio stations? If so, is this compatible with the EC Treaty and/or the Protocol annexed to the Treaty of Amsterdam on the system of public broadcasting in the Member States?

3. Does the Commission think that investing one public broadcasting station's profits from advertising revenue in another public station, via cross-subsidisation, changes the terms of competition between public and commercial broadcasting in such a way as to harm the public interest?

Joint answer to Written Questions E-3653/00, E-3654/00 and E-3655/00 given by Mr Monti on behalf of the Commission

(15 February 2001)

As decided by the Court of Justice, public television broadcasting falls within the terms of the EC Treaty and the common market principles, including the rules on competition and state aid. In particular, Article 87(1) (ex-Article 92) of the EC Treaty could apply to public radio broadcasting if all the conditions mentioned therein are met. A State aid may nevertheless be found compatible with the EC Treaty provisions. Furthermore, Article 86(2) (ex-Article 90) of the EC Treaty provides that a State aid can be declared compatible when it is necessary for the realisation of a service of general economic interest.

The importance of public service broadcasting is stated in the Protocol on public service broadcasting, introduced by the Treaty of Amsterdam. The Commission has to take into account this interpretative Protocol. According to the Protocol it is the competence of Member States to define the public service and to provide for the funding for this public service, insofar as the funding does not affect trading conditions and competition in the Community to an extent that would be contrary to the common interest.

The Commission is not able to give a precise opinion at this stage on the specific questions of the Honourable Member but will in due time and in the light of the above assess all implications of the requirements of the EC Treaty for the broadcasting sector. As far as the State aid aspect is concernend, the Commission plans to clarify its position in this context in a communication in the course of this year.