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category-private-vs-public-broadcasters"> <header class="entry-header page-header"> <h1 class="entry-title ">State Aid Reporting obligations</h1> <div class="entry-meta"> <span class="posted-on"><i class="fa fa-calendar"></i> <a href="https://www.aereurope.org/state-aid-reporting-obligations/" rel="bookmark"><time class="entry-date published" datetime="2011-08-17T09:34:20+02:00">17 August 2011</time><time class="updated" datetime="2019-07-29T14:55:10+02:00">29 July 2019</time></a></span><span class="byline"> <i class="fa fa-user"></i> <span class="author vcard"><a class="url fn n" href="https://www.aereurope.org/author/le-antonio/">Le-Antonio</a></span></span> </div> </header> <div class="entry-content"> <p>17 August 2011 – ACT, AER AND EPC’S RESPONSE TO THE COMMISSION ON THE AMENDMENT OF THE STATE AID REPORTING OBLIGATIONS</p> <p>This submission is made on behalf of the Association of Commercial Television in Europe (ACT), the Association of European Radios (AER) and the European Publishers Council (EPC).</p> <p>Together, these associations and groups represent companies which are part of Europe’s commercial media economy in print, in broadcast and online.</p> <p><em>The ACT is registered in the Interinstitutional Transparency Register under the identification number 18574111503-28, the AER under n° 6822083232-32 and the EPC under n° 4456380381-30.</em></p> <p><strong>State aid to public broadcasters should be included into the EU State aid scoreboard in order to guarantee transparency for all commercial competitors.State aid granted to public broadcasting should be itemised having regard to the different activities like TV, radio and online, mobile, EPG and apps activities and having regard to the affected market players and the assumed market distortion.</strong></p> <p><strong>Introduction:</strong></p> <p>The companies which are represented by the undersigned parties are active on a very competitive market. In the past, this market was characterised by traditional media like linear TV and radio and the traditional press. The broadcasting market was characterised by a dual system of commercial and public broadcasters, offering linear content. The traditional print market, however, is a purely commercial sector.</p> <p>Due to the ongoing digitisation of content and multiplication of ways of distributing content, traditional media companies are diversifying their services, are investing into digital content and are fostering digital innovation. Today, the commercial media companies, represented by the three undersigned groups and associations, offer more and more digital content services and are constantly investing into the development of new sustainable content services for the new digital economy.</p> <p>Traditionally, but also surprisingly, the commercial broadcasters’ strongest competitors are public broadcasters. In the traditional linear audiovisual environment, some public broadcasters’ dual income system of licence fee and advertising income have always caused legitimate competition concerns regarding the advertising market. Furthermore, commercial broadcasters are concerned about public broadcasters’ behaviour on the rights’ acquisition market, especially with regard to premium sports rights.</p> <p>Public broadcasters do not restrict themselves to traditional linear broadcasting but offer new non-linear audiovisual services, which very often cross over the border of the very «broadcasting» concept. These non-linear services, which public broadcaster now tend to call public media services, give consumers the sovereignty to decide when and where they want to consume audio and / or audiovisual content. This is in line with the firm intention to cater for new and younger audiences.</p> <p>Public broadcasters, in fact, do not only restrict their new services to non-linear TV and radio content, but also offer other new digital services like press-like news-websites, digital archives and other digital services which cannot be subsumed under the broadcasting definition anymore. Today, public broadcasters directly compete with commercial publishers which try to bring their content on-line and invest into the development of new digital business models.</p> <p>Regarding these new activities, the European Commission’s 2009 Broadcasting Communication foresees that all public broadcasters’ new digital activities have to undergo an ex ante evaluation, which is a procedure designed to evaluate the utility of new services from a public value perspective, and also a means to avoid negative impact upon the commercial offer which may already exist.</p> <p>Commercial media will continue to finance and co-finance their content with advertising and subscription revenues, whereas public broadcasters will continue to profit from public funding, on account of being regarded as public service or, at least services of special economic interest.</p> <p>Unfortunately, clear and transparent data on the amount of public financing spent on public broadcasters’ various activities is lacking.</p> <p>The broadcasting sector is in a situation where more transparency rules are necessary, as well as the effective enforcement of such rules.</p> <p>The internet is an area of particular concern because of the rapid way the market is growing. With millions of unique users any publicly funded activity online has enormous consequences and significant effects on competition with the private sector.</p> <p>Commercial publishers rely almost exclusively on advertising revenues to finance their online services. Any move by the publicly funded broadcasters to enter the advertising market seriously damages our ability to remain competitive. Most crucially, if the broadcasters are allowed to sell advertising <strong>for any part of their online offer</strong> this will establish the classic “thin end of the wedge” and create an unacceptable precedent for advertising revenues to play a part in funding the broadcasters’ online ‘public services’.</p> <p>Although the distinction between television (and radio) broadcasting and on-demand services is blurring by the day, with a high level of substitution in the longer term, arguably there is a greater risk that the publicly funded broadcasters could damage healthy competition in this marketplace than in, say, the TV or radio sectors. This is because, as the market fragments, it will be essential for traditional paper-based media to expand alternative delivery platforms to retain readers and advertisers. If those new platforms are effectively closed off because they have already been colonised by publicly funded services, the long-term future viability of these companies will be jeopardised.</p> <p>The online activities of the publicly funded broadcasters should be <strong>subject to a clearly defined and appropriate remit with clear limits and proportionate budgets.</strong> Any existing services falling outside such a clearly defined remit should be discontinued and any extension of existing services should be subject to a market impact assessment before approval.</p> <p><strong>Subject of the present consultation</strong></p> <p>The purpose of this Consultation is to ask for contributions in relation to amending Regulation (EC) No 794/2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty as regards the simplification of Member States’ reporting obligations, which is also to take place in other areas of economic activity, not media related.</p> <p>According to the draft amendment to the above referred Regulation, which is of general range, thus applying to the media sector, those reporting obligations can be simplified without affecting the information needs of the Commission for monitoring purposes, thereby reducing the administrative burden for Member States.</p> <p>The Commission recalls, in the above reefed draft that,<em> «as regards compensation for the provision of services of general economic interest (hereinafter “SGEIs”), Member States currently provide periodic reports on the implementation of Article 8 of Commission Decision 2005/842/EC of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest».</em></p> <p>Furthermore, the Commission states that <em>«For transparency and monitoring purposes it is appropriate that annual reports which Member State submit pursuant to Regulation (EC) No 794/2004 contain data on the compensation for the provision of SGEIs in respect of which the Commission has adopted a decision. Data on compensation for the provision of SGEIs that does not constitute State aid within the meaning of the Article 107(1) of the TFEU should not be included in the annual reports.»</em></p> <p>The undersigned organisations would like to recall that this amendment to the above referred Regulation should be clearly subject to strict interpretation, and only exempt from reporting obligations those funding mechanisms or compensation in respect of which the Commission has already adopted a decision concluding that it does not constitute State aid, assuming this decision was not reversed by the ECJ.</p> <p><strong>Qualification as State aid</strong></p> <p>In the 2001 Broadcasting Communication the Commission considered public broadcasters’ public funding as State aid, stating that “State aid to public broadcasters must be examined by the Commission in order to determine whether or not it can be found compatible with the common market .”</p> <p>In Spring 2005, the Commission published a State aid scoreboard with a focus on public broadcasting where it states: <em>“PSB operators are often allowed under their national legal system to develop purely commercial activities in addition to their public service task (e.g. sale of advertising space or programs). The availability for PSB operators of State resources in this competitive environment creates the need for State aid control. Otherwise these resources could be used to the advantage of the PSB operator and distort competition. The focus of the Commission‘s investigation in this area has been to determine whether or not a particular case involves State aid and if so whether there has been any overcompensation to undertakings performing the public service task .”</em></p> <p>Finally, in its 2009 revised Broadcasting Communication, the European Commission re-affirms the State aid character of state financing of public broadcasters, referring to the TV2 judgement in joined cases T-309/04, T-317/04, T 329/04 and T-336/04 “TV2”.</p> <p>The EC Treaty displays a general prohibition of State aid, but foresees exceptions. Therefore, State aid is the exception, not the rule.</p> <p>The Amsterdam Protocol from 1997 emphasises Member States’ discretion to finance their public broadcasting systems, but does not exempt public broadcasting from European State aid rules, stating that the Member States’ are only competent to organise public broadcasting funding <em>“insofar as such funding does not affect trading conditions and competition in the Community to an extent which would be contrary to the common interest”.</em></p> <p>As we know, most complaints which the Commission is called to decide upon, are related to the very problem of qualification funding schemes as State aid, and most controversies between the commercial operators and their Member States and Public Broadcasters have to do with this qualification, which most Member States tend to view with significant latitude in order to escape the enforcement of State aid and competition framework.</p> <p>The undersigned organisations wish to state clearly that the Altmark Decision criteria are to be strictly and uniformly applied to all public funding mechanisms, in order to determine whether or not we are in the presence of State aid. Furthermore, whether Altmark criteria are fulfilled or not is a question of a case by case investigation. Member States cannot abandon their responsibility of contributing to the State aid scoreboard pleading that all Altmark criteria are fulfilled. It is the role of the Commission to determine if this is the case, not the competence of the Member States.</p> <p>So the only cases where an exemption of reporting may take place are those funding mechanisms or compensations where a valid and definite decision qualifying them as not being State aid, has already been issued by the Commission or by the ECJ.</p> <p>In addition, the undersigned organisations would like to stress the importance of stating in the draft Amendment that <em>«The amendments of Regulation (EC) No 794/2004 should be without prejudice to specific reporting obligations which the Commission may impose when adopting State aid decisions or which Member State may undertake to provide in connection with a decision authorising aid.»</em></p> <p>The then Commissioner in charge of Competition and Media, Mr. Mario Monti also stated in his speech at the University of Nijenrode on 12 September 2000: <em>“However, once a market is liberalised, Community competition rules and thereby State aid ones apply. In broadcasting as in all other sectors, if some operators enjoy ongoing State funding, which is not available to other operators, this constitutes a State aid in the sense of Article 87 of the Treaty. In such cases, the Commission as recalled by the Court is required to act.”</em></p> <p><strong>Submission of the broadcasting sector to the SGEI Framework</strong></p> <p>Neelie Kroes, in her former position as European Commissioner for Competition Policy, recalled in her speech in Cologne, on 9 June 2008, that <em>«another important issue in the consultation was the consistency of the Broadcasting Communication with the general framework for services of general economic interest» since «the 2005 Framework was adopted four years after the Broadcasting Communication and reflects the Court’s Altmark jurisprudence». In her own words «the Commission has already started to align certain elements in the broadcasting sector to the SGEI Framework» Nevertheless, there are still a few obligations that «public broadcasters currently do not need to fulfill (e.g. the need to determine in advance the parameters of compensation; stricter rules on cost allocation etc.)».</em></p> <p>The Commissioner admitted that<em> «While the Broadcasting Communication provides some guidance on the control of the remit, there is little information on the control of proportionality and overcompensation» which explains why «many private broadcasters and other stakeholders made specific efforts to point out this lack of legal certainty. They would like better and more effective control mechanisms especially when public financing for broadcasting services expands into new media activities.»</em></p> <p>The undersigned organisations wish to point out, accordingly, that the Amsterdam Protocol did not want to create a specific exception for the public broadcasting sector. Therefore, public broadcasters are not to be regarded as yet another exception, aside SGEI – the already existing exception to the general prohibition of State aid. Instead, they should be regarded as an example of SGEI to which the SGEI Framework does apply in the maximum strength.</p> <p><strong>The State Aid scoreboard & transparency</strong></p> <p>Regretfully, State aid to the broadcasting sector has ceased to be accounted for in the State aid scoreboard. Therefore, we call the European Commission to take the necessary steps so that State aid to public broadcasters’ activities appears in the EU State aid scoreboard, in full coherence with the fact that it is clearly qualified as State aid according to the Altmark Decision criteria.</p> <p>Although the Commission’s Spring 2005 State aid scoreboard contained a special chapter on public broadcasting without quantifying the amount of state aid spent to public broadcasting, the current State aid control statistics does not mention or quantify any State aid funding of public broadcasters .</p> <p>Unfortunately, this lack of transparency is not being compensated by a higher transparency on Member State level: The ex post control of public broadcasters is insufficient. In some Member States, detailed annual reports and accounts are not publicly available, or reports from Court of Auditors are only being sent to the public broadcasters’ governing body and not being published.</p> <p>In general, publicly available accounts do not distinguish between the different non-commercial activities of public broadcasters: integrated public broadcasters which offer radio and TV services, do not separate these accounts, although they are operating on different markets, thus breaking the rules of transparency.</p> <p>The original Commission Directive on Transparency obligations (80/723/EEC) imposed a general transparency obligation on financial relations between public authorities and public undertakings. Subsequent amendments in 1985 (85/413/EEC), 1993 (93/84/EEC) and 2000 (2000/52/EC) also required Member States to collect and submit to the Commission, upon request, certain financial data concerning large public undertakings active in the manufacturing sector and extended the transparency requirements to the obligation of keeping separate accounts for public and private companies which, on the one hand, are entrusted with special or exclusive rights or operate services of general economic interest and receive State aid related to these services and, on the other hand, also carry out other activities.</p> <p>Commission Directive 2005/81/EC modified the definition of undertakings required to keep separate accounts. The obligation now applies to undertakings which are entrusted with a special or exclusive right, or operate a service of general economic interest and receive for it public service compensation in any form, whether or not it is State aid, while also carrying out other activities. Separate accounts identify the costs imputable to the service of general economic interest and make it possible to check that the correct amount of compensation has been paid.</p> <p>Commission Directive 2006/111/EC of 16 November 2006 codified and replaced the original Transparency Directive and its amendments (including the amendment of 2005) when it entered into force on 20 December 2006. This does not however affect Member States’ obligation to respect the implementation deadlines set out in the abovementioned Directives.</p> <p>Member States were required to implement Commission Directive 2005/81/EC into national law by 19 December 2006.</p> <p>However, it is still very difficult in most European States to have access to significant data on public funding of public broadcasters, namely because of the fact that various media activities are bundled together and consolidated accounts prevent a clear and correct picture of each economic activity.</p> <p>The European Audiovisual Observatory collects the few publicly available data on the public broadcasting sector and publishes them regularly in Yearbooks .</p> <p>Although the Yearbooks constitute an outstanding source of information on the audiovisual sector, it is not possible to determine and distinguish the exact amount of State aid granted to the different markets, i.e. TV, radio, or non-broadcasting related internet activities.</p> <p>Therefore, commercial competitors can only estimate the amount of State aid spent in this sector. The undersigned organisations estimate State aid to broadcasting being worth at least Euro 22 bn Euro per year (EU-27). This estimation is stupefying, because it would make broadcasting the biggest beneficiary of State aid in the EU after agriculture, fishery & regional funding (and currently the financial sector). That is all the more surprising, as data on public funding to broadcasting does not appear in the Commission’s State aid scoreboard.</p> <p><strong>Existing State aid & new State aid</strong></p> <p>According to ANNEX III of the Draft Amendment to the above-referred Regulation <em>[…]«with a view to further simplifying, streamlining and improving the collection of the annual report for existing State aid in Member States, the standardised reporting format will provide for an annual update of State aid expenditure in the Member States. It covers all sectors including agriculture and fisheries.»</em></p> <p>The EU State aid framework opposes existing aid to new aid. The Regulation currently analysed distinguishes between existing and new State aid. State aid complaints falling in the category of existing State aid schemes generally end up in a political compromise which provisionally discontinues the complaint. Only in case of non-fulfilment of the commitments the procedural rules on existing State aid schemes foresee the transition into the procedure on new aid.</p> <p>Public broadcasters prefer that their public funding is considered as existing aid, because it gives them more flexibility in relation to the negotiations on political compromises, and also allows them to keep the aid, since the only possibility of having to return the aid is in case it qualifies as new aid.</p> <p>Pursuant to Article 1(b)(i) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty(12), existing aid includes “… all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty. In accordance with the case-law of the Court , the Commission must verify whether or not the legal framework under which the aid is granted has changed since its introduction.”</p> <p>It is our firm belief that the current criteria are not clear enough and should therefore be reviewed, as we intend to demonstrate by quoting from the most recent Commission Decision on the broadcasting sector, dated from the 26 January, 2010, which is State aid case E 5/2005 (ex NN 170b/2003) – Annual financing of the Dutch public service broadcasters – The Netherlands :</p> <p>As we know, Article 4 (1) of the Regulation (EC) No 794/2004 defines an alteration of existing aid as <em>“any change, other than modifications of a purely formal or administrative nature which cannot affect the evaluation of the compatibility of the aid measure with the common market”.</em></p> <p>In the Gibraltar case , it was established that <em>“it is not ‘altered existing aid’ that must be regarded as new aid, but only the alteration as such that is liable to be classified as new aid. Accordingly it is only where the alteration affects the actual substance of the original scheme that the latter is transformed into a new aid scheme. There can be no question of such a substantive alteration where the new element is clearly severable from the initial scheme”.</em></p> <p>In case subsequent modifications are substantial, the following assessment is whether they are severable from the original measure, in which case they can be assessed separately, or whether they are not severable from the original measure so that the original measure is as a whole transformed into a new aid.</p> <p>Thus, on the basis of the above mentioned legal principles which are clarified in the Commission’s 2009 Broadcasting Communication in paragraph 31, three different questions have to be addressed when deciding whether a measure constitutes new or existing aid:</p> <p>– Was the legal basis of the aid adopted before the entry into force of the EEC Treaty?</p> <p>– Has there been any subsequent change that affected the actual substance of the original measure or are the changes rather of a purely formal and administrative nature; and</p> <p>– In case of substantial modifications, are they severable from the original measure and can hence be assessed separately or in the alternative is the original measure as a whole transformed into a new aid?</p> <p>For instance, when we consider the Decision of the CFI from 16 December 2010 , we see that qualification as existing aid applies to all aid existing before the entry into force of the EC Treaty in the Member State concerned and which may have been subsequently authorised by the Commission and also to any modification to an existing aid .</p> <p>In case of a modification, it must be the modification itself which is qualified as new aid, not the existing aid except in cases where the modification affects the initial framework in its substance, thus transforming all of it in a new aid. If it doesn’t affect the existing aid, then it must be assessed separately.</p> <p>After explaining the criteria, the CFI further indicates that the reason why the Communication assimilates existing aid to new aid is precisely to prevent Member States from circumventing the obligation to notify new measures to the Commission, by reaching the same results through extending the range of an existing legal framework .</p> <p>So, the CFI concludes that the relevant criteria to qualify a new funding scheme as new or modification of an existing aid, have to do with the legal basis, its modalities and its limits. So the Commission should look into the moment when the legal basis was established, so that any ad-hoc financing and non regular and non automatic funding, which respond to concrete needs, must be qualified as new aid. But these shouldn’t be the only cases of new aid as opposed to existing aid.</p> <p>In the Commission’s view, the broadening of a public service mandate for a public broadcaster by the inclusion of a possibility to provide TV and radio programmes and related services over new types of platforms such as the internet or mobile telephones, does not, as such, lead to the conclusion that the existing aid scheme has been substantially modified with the meaning of paragraph 31 of the 2009 Broadcasting Communication and the Gibraltar jurisprudence.</p> <p>Let us consider the following examples:</p> <p>a) in the BBC News 24 decision of 18 March 2000 , the Commission stated that the public service nature of a service cannot solely be judged on the mere basis of the distribution platform used. Once a Member State has defined a certain service as being part of the public service remit, the service remains a public service regardless of the distribution platform, provided the programme concept underlying it and the public funding arrangements do not substantially change, either.</p> <p>b) in its Decision concerning Germany’s public broadcasting system of 24 April 2007 , the Commission concluded that amendments to the inter-State Treaty on public broadcasting did not qualify as substantial change of the aid scheme because of the changes to the possibility for public broadcaster to offer new media services, as well as the possibility granted to public service broadcasters to distribute existing TV or radio programmes via digital technology and to offer additional digital channels.</p> <p>For the Commission, “side tasks” were considered to be just another way for the public broadcasting organisations to fulfil the original remit, which had not been affected itself by the new amendment and did not impose a clear obligation upon the public broadcasters to offer defined additional public services, but merely introduced the possibility of supplying and distributing programme materials on other distribution platforms.</p> <p>So, for the Commission, the possibility, for public broadcasters, to fulfil the existing public service remit via new distribution platforms, such as the internet, is not in itself a substantial and severable amendment, provided that the objective is not changed and that the legal basis for the financing of the public service activities has not been changed. And the Commission is therefore of the opinion that the introduction of a new legal provision allowing for this funding to take place does not constitute a substantial change to the aid scheme.</p> <p>The question arises immediately: if a new legal provision is not a change of the legal basis, what is?</p> <p>Furthermore, the Commission goes on stating that <em>«the subsequent merging of “side tasks” with “main tasks” in the Media Act of 2008 and the re-formulation of the two parts of the public service remit as one multimedia public service remit cannot either be regarded as a substantial alteration of the aid scheme. This is because the public service remit in the Media Act of 2008 merely merges two categories of the public service remit already pre-existing before 2008, namely main and side tasks. This is a formal change and does not as such lead to a substantial modification of the public service mission». The Commission ends up by saying that «these observations on the nature of the aid are in line with the Commission’s policy on technology neutrality».</em></p> <p>The undersigned organisations would strongly recommend the reassessment of this statement in the light of paragraphs 84 to 91 of the 2009 Communication: for reasons of internal coherence of the whole assessment, <strong>new significant services should always imply the qualification of their respective funding as new aid</strong>, in regard of the fact that the purpose is now entirely different from the time the funding scheme was created, despite the attempts on behalf of public broadcasters to make it look like exactly the same.</p> <p>According to paragraph 84 of the 2009 Communication, <em>«State aid to public service broadcasters may be used for distributing audiovisual services on all platforms provided that the material requirements of the Amsterdam Protocol are met. To this end, Member States shall consider, by means of a prior evaluation procedure based on an open public consultation, whether significant new audiovisual services envisaged by public service broadcasters meet the requirements of the Amsterdam Protocol, i.e. whether they serve the democratic, social and cultural needs of the society, while duly taking into account its potential effects on trading conditions and competition».</em></p> <p>The Communication goes on saying that <em>«The ‘new’ nature of an activity may depend among others on its content as well as on the modalities of consumption. The ‘significance’ of the service may take into account for instance the financial resources required for its development and the expected impact on demand. Significant modifications to existing services shall be subject to the same assessment as significant new services».</em></p> <p>So, if the amount of financial resources, as well and the modalities of consumption are relevant for the purpose of qualifying a new service as significant, it must be regarded as inevitably logic that any funding scheme aimed at the launching and development of such service should be considered as a new aid, provided the nature as State aid is demonstrated through the application of the Altmark criteria.</p> <p>As it is stated in the 2001 Broadcasting Communication, <em>“the Commission must take into account all the legal and economic elements related to the <strong>broadcasting system</strong> of a given Member State .”</em> But public broadcasters’ online activities are not part of any broadcasting system. Press-like news websites, together with a wide range of themed websites across leisure, health, sport, etc., all of which duplicate the offers of magazine and newspaper publishers; and other online services are part of electronic media. In this context, the ECJ’s so far existing case law is not applicable as the question answered was: to which extent changes to the State aid schemes may alter existing aid into new aid. These cases did not decide on the situation described above: State aid schemes where the State aid has been rededicated to another activity in another market.</p> <p>The boundary between public service and commercial operations is not as clear cut as it should be especially when analysing the commercial impact and we ask the Commission to take this into account in future.</p> <p>For example in the UK, it is difficult to analyse the <em>commercial</em> operations of the BBC in isolation of the BBC’s publicly funded activities. This is because the BBC is using public money through licence fees and commercial revenues through BBC Worldwide’s advertising and other commercial revenues to build a global web operation. Through superior technology and marketing power they dominate the UK’s online market. The licence fee supported BBC.co.uk domain is uninterrupted by adverts, promoted on their TV and radio platforms, constantly evolving and building huge audiences. They use the same technology to underpin their worldwide audience as their UK audience and then monetise it through advertising. Such unparalleled resources, combined with unrivalled, privileged access to un-regulated cross-promotional opportunities, cross-subsidised access to content production and assets, combine to create unfair competition with the commercial media sector. BBC advertising on global websites distorts competition with commercial web publishers and hampers their ability to compete in these markets. It also blurs the boundaries between licence fee-funded and commercial activity. In addition, subscriptions revenues are also threatened when competing services from the BBC are launched free of charge which duplicate commercial offers. Since 2006 when the BBC Trust rules superseded previous fair trade regulations, BBC Worldwide expanded aggressively into areas unrelated to BBC content e.g. through development of certain ‘passion sites’ such as BBC Green. Licence fee money was risked in ventures such as the purchase of Lonely Planet publishing, and the very presence of the BBC in the media acquisition market is in itself damaging to fair competition. The BBC is exploiting its content at the expense of a dynamic, plural media sector (especially in the online arena), stifling innovation and closing off potential markets at a very early, vulnerable stage in their development.These activities which compete directly with the commercial sector are distractions to the BBC’s core remit and thereby skewing their strategic priorities. There should be clear, more stringent rules governing how BBC Worldwide can exploit the BBC’s assets. There should be unambiguous boundaries for their online activity and between licence fee-funded and commercially funded activities and products. In order to ensure there is no cross subsidy from the public services to commercial BBC services separate accounts must be produced and clear terms on which transactions are conducted must be made available. This is essential and in line with EU policy which already requires transparency and fully separate accounts. All current activity should be reviewed against the new guidelines, not just new/planned activity, and any activity not meeting the new requirements closed down.</p> <p>The criteria used by the ECJ and the Commission would strongly benefit from a more streamlined approach, which would also regard these last considerations, so that any measure which is based on an ad-hoc modification of the legal framework in order to allow new forms of funding or funding schemes for new significant services, which difficultly correspond to the concept of «broadcasting», would always qualify as new aid.</p> <p>The undersigned organisations strongly believe that future complaints would also benefit from this modification of procedural rules on existing aid as long as new non-broadcasting activities are concerned.</p> <p><strong>Conclusions:</strong></p> <p>1) The broadcasting sector is in a situation where more transparency rules are necessary, as well as the effective enforcement of such rules;</p> <p>2) Any future amendments of the SGEI Framework, which applies in full to the Broadcasting sector, must only exempt from reporting obligations those funding mechanisms or compensation in respect of which the Commission has already adopted a decision concluding that it does not constitute State aid, assuming this decision was not reversed by the ECJ;</p> <p>3) The Altmark Decision criteria are to be strictly and uniformly applied to all public funding mechanisms, in order to determine whether or not we are in the presence of State aid;</p> <p>4) The Amsterdam Protocol did not want to create a specific exception for the public broadcasting sector. Therefore, public broadcasters are not to be regarded as yet another exception, aside SGEI – the already existing exception to the general prohibition of State aid;</p> <p>5) The ex post control of public broadcasters is insufficient: in some Member States, detailed annual reports and accounts are not publicly available, or reports from Court of Auditors are only being sent to the public broadcasters’ governing body and not being published;</p> <p>6) State aid to public broadcasters should be included into the EU State aid scoreboard in order to guarantee transparency for all commercial competitors;</p> <p>7) State aid granted to public broadcasting should be itemised having regard to the different activitieslike TV, radio and online, mobile, EPG and apps activities and having regard to the affected market players and the assumed market distortion;</p> <p>8) The Transparency Directive and corresponding framework must be correctly implemented, leading to functional or even structural separation between public missions and commercial activities of public broadcasters;</p> <p>9) The reason why the Broadcasting Communication assimilates existing aid to new aid is precisely to prevent Member States from circumventing the obligation to notify new measures to the Commission, by reaching the same results through extending the range of an existing framework;</p> <p>10) New significant services should always imply the qualification of their respective funding as new aid.</p> <p>Association of Commercial Television in Europe<br /> Ross Biggam<br /> Director General</p> <p>Association of European Radios<br /> Julia Maier-Hauff<br /> Secretary General</p> <p>European Publishers Council<br /> Angela Mills-Wade<br /> Executive Director</p> <p><em>About the ACT:</em><br /> <em> The Association of Commercial Television in Europe (ACT) represents the interests of the commercial audiovisual broadcasting sector in Europe. Formed in 1989, the ACT has thirty-three member companies licensed in 30 different European countries and distributed across 45 European markets and beyond. Our members operate several hundred free-to-air and pay-tv channels and distribute many more channels and new services. The ACT members encompass several business models: free-to-air broadcasters and pay-TV players, digital platform operators and multimedia groups.</em></p> <p><em>Contact:</em><br /> <em> Maxim Hauk</em><br /> <em> Legal Adviser</em><br /> <em> mh @ acte.be</em><br /> <em> +32 2 738 7611 |Tel</em><br /> <em> www.acte.be</em><br /> <em> Association of Commercial Television in Europe</em><br /> <em> Rue Joseph II, 9-13</em><br /> <em> B-1000 Brussels</em></p> <p><em>About the AER:</em><br /> <em> The Association of European Radios (AER) is a Europe-wide trade body representing the interests of over 4,500 private/commercial radio stations across the EU27 and in Switzerland. For further information, please see: www.aereurope.org</em></p> <p><em>Contact:</em><br /> <em> Julia Maier-Hauff</em><br /> <em> AER Secretary General</em><br /> <em> julia.maierhauff @ aereurope.org</em><br /> <em> +32.2.736.91.31.</em><br /> <em> Avenue d’Auderghem 76</em><br /> <em> B-1040 Bruxelles</em></p> <p><em>About the EPC:</em><br /> <em> The European Publishers Council (EPC) is a high level group of Chairmen and CEOs of Europe’s leading media groups representing companies with newspapers, magazines, online publishing, journals, databases, books and broadcasting. We have been communicating with Europe’s legislators since 1991 on issues that affect freedom of expression, media diversity, democracy and the health and viability of media in the European Union.</em></p> <p><em>Contact:</em><br /> <em> Angela Mills Wade,</em><br /> <em> Executive Director,</em><br /> <em> angela.mills @ epceurope.org</em><br /> <em> +322 231 1299</em><br /> <em> www.epceurope.org</em><br /> <em> European Publishers Council,</em><br /> <em> 26 Avenue Livingstone,</em><br /> <em> B-1000 Brussels</em></p> </div> <footer class="entry-meta"> <i class="fa fa-folder-open-o"></i> <a href="https://www.aereurope.org/category/private-vs-public-broadcasters/" rel="category tag">Private vs. Public Broadcasters</a>. <i class="fa fa-link"></i> <a href="https://www.aereurope.org/state-aid-reporting-obligations/" rel="bookmark">permalink</a>. <hr class="section-divider"> </footer> </article> <nav class="navigation post-navigation" role="navigation"> <h2 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