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The European Union and media ownership transparency: the scope for regulatory intervention
Table of Contents
1. Introduction........................................................................ 3 2. Overview of existing measures at the European level that relate to media ownership transparency ............................... 6 2.1 Council of Europe initiatives ........................................ 6 2.1.i 2.1.ii Council of Europe Recommendation No. R (94) 13 and Recommendation CM/Rec (2007) 2 ......... 6 The European Convention on Transfrontier Television ............................................................. 7
2.2 EU transparency measures of specific relevance for the media sector ........................................................... 9 2.2.i 2.2.ii 2.2.iii European Parliament resolution of 25 September 2008 ................................................... 9 Directive 2007/65/EC ........................................ 10 Directive 2000/31/EC ....................................... 11
2.3 Generally applicable EU rules relating to competition and corporate transparency ........................................ 11 Competition law................................................ 11 2.3.i.a The Merger Regulation .............................. 12 2.3.ii Corporate transparency requirements................. 12 2.3.ii.a Commission Directive 2007/14/EC............ 13 3. EU competence to act in the field of media ownership transparency ...................................................................... 14 3.1 Completion of the Internal Market............................. 14 3.1.i 3.1.ii Art. 114 TFEU ................................................... 15 Articles 50 and 62 TFEU.................................... 16 2.3.i
3.2 Article 25 TFEU: Citizenship ..................................... 16 3.3 Freedom of expression and information ...................... 17 4. Conclusions and Recommendations .................................. 21 4.1 A legal basis for action? ............................................... 21 4.2 Delimiting the scope of any future measure ................ 21 4.3 Getting transparency onto the political radar .............. 22
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T HE E UROPEAN U NION AND MEDIA OWNERSHIP TRANSPARENCY : THE SCOPE FOR REGULATORY
INTERVENTION
1. I NT R OD U CT IO N
In modern economies and societies, the availability of information is central to better decision making by voters, consumers, and investors. Much of that information is provided by the media, including newspapers, television, and radio, which collect information and make it available to the public. A crucial question then is how the media should be optimally organized.2 Recently there has been a fair amount of activity in the European Union (EU) regarding media pluralism, while the issues surrounding the transparency of media ownership have been largely ignored. Yet transparency is an essential component of pluralism. The availability of accurate and up-to-date data on media ownership lies at the very heart of any media pluralism regulation, as it would be impossible to take steps to address excessive media concentrations without the tools to identify them.
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Yolande Stolte is a Researcher in IP and Media Law at the University of Edinburgh; Rachael Craufurd Smith is a Senior Lecturer at the University of Edinburgh, specialising in media and European Union law. The authors express gratitude for support provided by the SCRIPT Centre, University of Edinburgh, and the Open Society Foundation. S. Djankov, C. L. Mcliesh, T. Nenova, and A. Shleifer, Who Owns the Media? Journal of Law and Economics, vol. XLVI (October 2003) 341381.
Although the Council of Europe and the European Parliament have brought out recommendations regarding media transparency in the last few years, these have not been acted on.3 It is left to Member States to implement legislation regarding media ownership transparency, and there is by no means a unified or standard approach to be found across Europe. The recent publication of the European Commissions Media Pluralism Monitor may suggest that the tide is turning, in favour of a more pro-active approach.4 But there is no certainty of this. In a recent speech to the European Parliament, Commissioner Viviane Reding emphasised that although one could arrive at a generous interpretation of the Treaty to allow EU intervention in support of media pluralism, any such measure would require considerable political support to be worth pursuing, together with evidence that legislation at the EU level was really necessary to solve the problem in question.5 Indeed, earlier attempts by the Commission to put forward proposals for a directive on media ownership in the 1990s foundered not so much on the absence of a Treaty basis as on political opposition from the Member States.6 A more contained regulatory initiative, focusing solely on transparency, is potentially much less controversial for the Member States, as it does not require existing media ownership structures to be modified, though it may, of course, reveal that this should be done. It would certainly be attractive for the European Parliament, which, in its 2008 Resolution on concentration and pluralism in the media in the European Union sought to encourage greater transparency in media ownership, and would enable the Commission to take concrete steps to address a problem that to date has largely eluded it.7 Nor would this be such a significant step for the EU, in that it has already taken limited steps to require transparency in the audiovisual media field in the Audiovisual Media Services (2007/65/EC) and Electronic Commerce (2000/31/EC) Directives, as
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See sections 2.1.i and 2.2.i below. Details of the Media Pluralism Monitor are available at http://ec.europa.eu/information_society/media_taskforce/pluralism/index_en.htm. See also n.35 below. Commissioner V. Reding, Freedom of Expression and Information in Italy: Declaration in the European Plenary, 8 October 2009. G. Doyle, From Pluralism to Ownership: Europes Emergent Policy On Media Concentrations Navigates the Doldrums (1997) 3 Journal of Information Law and Technology (JILT); R. Craufurd Smith, Rethinking European Union Competence in the Field of Media Ownership: The Internal Market, Fundamental Rights and European Citizenship (2004) 5 European Law Review 652672. See section 2.2.i below.
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well as more extensive steps regarding share ownership generally through the 2007 Transparency Directive (2007/14/EC).8 The challenge in relation to a media transparency proposal is to establish a convincing legal and factual basis for EU intervention. As an initial contribution to this debate, the present report considers, firstly, the existing regulatory framework at both the Council of Europe and the EU levels and, secondly, whether the EU has competence to propose a measure in this field. The report identifies two main legislative bases for action: the Internal Market, and Citizenship. In relation to both of these heads it will be necessary to establish that action is required at the EU, as opposed to Member State, level. In relation to the Internal Market head, it will be necessary to show that there are concrete barriers to the realisation of the Internal Market which legislation of this type would address. We also consider the role that the Agency for Fundamental Rights could play in collating information and stimulating debate on media transparency. We conclude by making several recommendations for further research and possible courses of action that may help to put this issue on the political agenda and, ultimately, lead to an improvement in media transparency.
2. O V E RV IE W
O F E X IS T I NG M E A S UR E S AT T H E E U R OP E A N LE V E L T H A T RE L A T E T O M E D IA OW NE R S H I P T RA NS P A RE N C Y
2.1.i
Both these Recommendations are applicable to all media types and both documents have never sparked legislative attempts. As Recommendations these documents are not binding, but the Committee of Ministers can ask member states to inform it of the action taken by them in regard to the Recommendations. However, as stated in the Explanatory Memorandum to the 1994 Recommendation: the purpose of the guidelines is not to impose a single set of rules aimed at guaranteeing media transparency but, rather, to suggest courses of action to governments which either do not have rules on transparency and would like to introduce such into national legislation, or which already have rules but would like to revise or supplement them. This indicates that they were not suggesting European harmonization of legislation on media transparency, or proposing to define a standard. The 2007 Recommendation on media pluralism and the diversity of media content can be viewed as an update of the 1994 Recommendation. Several of its provisions directly address transparency and ownership, and take account of the technological/digital developments that have occurred since 1994. It specifically discusses the need for transparency not only for the regulatory authorities that are required to monitor media markets, but for the public as well. It is cited in the explanatory memorandum to the draft of the Second Protocol amending the European
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Convention on Transfrontier television (see below) as setting out the preferred amount of information that should be available to the public, in terms of media ownership transparency.9
Draft Second Protocol amending the European Convention on Transfrontier television, Explanatory Memorandum T-TT (2009)009FIN, para 189. Council of Europe, Strasbourg, 5.V.198, ETS No. 132, text amended according to the provisions of the Protocol, ETS No. 171, which entered into force on 1 March 2002. It is not applicable to on-demand services and the printed press, however, the second protocol that is currently being prepared will broaden the scope of the Convention to all audiovisual media services. See further art.3 of the Convention. Para 49, Explanatory Memorandum to the Convention. Para 146, ibid., emphasis added.
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ratified by 34 states, not all of which are members of the EU, so that it has a somewhat broader reach than the AVMSD. Currently, a revision to the Convention is being prepared, which will bring art.6 into line with the AVMSD.15 Under the proposed art.5 of the revised Convention, headed [t]ransparency and information requirements, media service providers would no longer be required to provide information about the status of the broadcaster, the name of the legal representative, the composition of the capital, or the nature, purpose and mode of financing of the programme service. Nevertheless, a proposed new art. 12, headed [m]edia pluralism and diversity of content, which amends the existing art. 10bis, appears designed to address this lacuna. Art. 12 includes two paragraphs, the second of which states that Parties will promote full transparency of ownership of media service providers. On the one hand, this new provision is potentially farreaching in that it imposes on Parties a positive obligation to promote, not simply transparency, but full transparency of media ownership. On the other, it is more limited than the existing art. 6, in that it merely calls on Parties to promote such a level of transparency, and does not require them actually to achieve it. It may also be noted that the existing art. 6 requires the information specified to be made available by the competent authority, which creates a central point from which information can be accessed, whereas the new provision leaves states free to determine how best to ensure that information is made available. If adopted in this form, it will be necessary to consider whether art. 12 will apply to Member States of the EU if they sign the revised Convention. The existing art. 27 of the Convention, discussed above, has been carried forward into the new draft in a slightly amended form in art. 32.2. This indicates that where EU law governs the particular subject concerned and applicable to the specific case, EU law is to take precedence but does not state, as does the existing art. 27, that the Convention rules will not apply in this area. Indeed, the new provision states that this is without prejudice to the object and purpose of the present Convention. This suggests that the Convention may impose an additional tier of obligations on EU Member States beyond those in the AVMS, provided that they are not inconsistent with the terms of the AVMS. It is also possible to argue that the provisions in art. 12 of the draft revised Convention have no direct parallel in the AVMS. Art. 5 of the draft undoubtedly now covers the same ground as the transparency requirements in art. 3a of the AVMS, but art. 12 on media pluralism and diversity of information, has no parallel in the AVMS. There is thus no EU rule governing the particular subject of media pluralism and diversity as set out in the draft revision. If this analysis is correct, EU Member States which sign up
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Revision of the European Convention on Transfrontier Television, Draft Council of Europe Convention on Transfrontier Audiovisual Media Services, T-TT(2009)013FIN.
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to a revised Convention in this form will be under an international obligation to promote full transparency of ownership. Although international law can take effect immediately within the domestic legal order of some states, in others, such as the UK, international obligations must first be enacted into domestic law to have internal effect. Although a state may have signed an international agreement, it may have little intention of enforcing it or particular provisions within it. Nevertheless, the Convention, if amended in accordance with the current draft, is a promising basis for promoting media transparency, not only within the EU Member States, but across a wider membership. States which sign up to the Convention have committed themselves to promote media transparency and this can be used as a political tool by pressure groups and interested parties to call for concrete action at the domestic level. Moreover, the Standing Committee to the Convention, composed of representatives of the State Parties, has the power to make recommendations concerning the application of the Convention. Standing Committee meetings could thus prove a useful forum in which to press for a co-ordinated and effective response to the demands of art. 12.
2.2.i
This non-binding Resolution of the European Parliament is aimed at media pluralism, but specifically states in paragraph 35 that it [e]ncourages the disclosure of ownership
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of all media outlets to help achieve greater transparency regarding the aims and background of the broadcaster and publisher. This shows that there is interest in media transparency on several levels in the EU.
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Directive 2007/65/EC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities, (2007) OJ L332/ 2745. Art. 2a AVMSD, n. 17 above.
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2.3.i
Competi tion l aw
Although the application of EU competition law may help to protect media pluralism by preventing collusive practices or mergers that could restrict consumer choice, it can only be used sporadically, on a case by case basis, to guarantee transparency. Generally speaking, even if competition law makes a certain amount of ownership data and financial information available to the public (and steps are taken by the EU not to reveal commercially sensitive data), it is unlikely that an ordinary member of the public who just wants to know where his radio service or newspaper comes from would be able to locate such information in the decided cases, or have the necessary training to understand it.
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Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market, (2000) OJ L178/ 116. Art. 1(2) Directive 98/34/EC, as amended by Directive 98/48/EC. Art. 6: they should be identifiable as such and it should be clear on whose behalf the commercial communication is made.
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Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings, (2004) OJ L24/1-22. Delineated in ECMR Art 1: concentrations are of a Community dimension either where the merging parties (the undertakings concerned): (i) combined world-wide turnover is > 5 billion and each of at least two of the merging parties realized > 250 million turnover in the EU, or (ii) combined world-wide turnover is > 2.5 billion; their combined turnover is > 100 million in each of at least 3 Member States; in each of those 3 Member States, the turnover of each of at least two of the merging parties is > 25 million; the Community-wide turnover of each of at least two of the merging parties is > 100 million unless each of the merging parties obtains > 2/3 of its EU turnover in one Member State. Commission, Green Paper on the Interconnection of Business Registers, COM (2009) 614 final.
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require extensive forensic investigation to ascertain who actually controls the media company. Although it is an extremely useful first step, the Directive is ultimately of limited use in the field of media transparency. This indicates the importance, when framing specific transparency requirement for the media, of requiring not only disclosure as to shareholdings in the media company itself but also information as to those individuals or corporations that are able to exert a material influence over the operation of the media company.
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Commission Directive 2007/14/EC, laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, (2007) OJ L69/27.
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3. EU
C OM P E T E N CE T O A C T I N T H E F IE LD OF M E D IA OW NE RS H I P T R AN S P A RE N CY
At the moment it is mainly left to Member States to enact legislation regarding media ownership transparency, and there is by no means a unified approach to be found across Europe. Yet there are a number of potential legal bases for EU intervention in this field, set out below. The strongest contenders are those that relate to the completion of the Internal Market and Citizenship. The Citizenship provisions are more difficult to enact, requiring unanimity in the Council, whereas the challenge for those considering action on an Internal Market basis will be to establish that the existing patchwork of domestic provisions creates a real barrier to trade within the EU.
Among others: ECJ C-118/96 Safir [1998] ECRI-1897, para 23 and ECJ C-158/96 Kohll [1998] ECR I-193, para 33.
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There are here two main bases for action set out below.
3.1.i
Where differences in national legislation form a barrier to the functioning of the Internal Market, measures can be taken based on art. 114 TFEU. This article allows the EU to adopt measures to approximate national provisions in order to further the establishment and functioning of the internal market. The mere existence of disparities between national rules is not sufficient justification for the application of art. 114.27 The disparities have to be such that they obstruct the fundamental freedoms and thus have a direct effect on the functioning of the Internal Market.28 This leaves the question whether the differences in national legislation relating to media transparency would be considered sufficiently appreciable to disrupt the functioning of the Internal Market.29 This judgement will hinge mainly on how difficult it would be for a media company to comply with stricter transparency regulations and the costs involved for the company. It is difficult to predict which way this would go; the Commission would initially need to accept that there was a sufficient basis to propose legislation and the requisite number of Member States and the European Parliament would similarly need to be convinced to adopt the measure. If legislation were to be adopted, it would still be open for a Member State to challenge its legality under Art. 263 TFEU before the Court of Justice, on the grounds that there was not a viable Treaty basis. This is an area where further research into domestic provisions is certainly required. It may be noted that in relation to broadcast and on-demand television services, the AVMSD could ensure that there is no appreciable effect on the Internal Market in the context of scenario 3.1.b above: Member States will not have jurisdiction to impose stricter transparency requirements on television services originating from other Member States (see 2.2.ii above). This would create a disparity between the regulation of the audiovisual media sector and the written press, as the latter is not covered by the AVMSD. Measures adopted under art. 114 TFEU follow the ordinary legislative procedure, introduced by the Lisbon Treaty.30 This procedure allows for measures to be adopted by the European Parliament, acting by a majority of the votes cast, and the Council,
27 28
Case C-376/98 Germany v Parliament and Council [2000] ECR I-8419, para 84. See amongst others: Germany v Parliament and Council, para 95, and Case C-491/01 British American Tobacco (Investments) and Imperial Tobacco [2002] ECR I-11453, para 60. Case C-376/98 Germany v Parliament and Council [2000] ECR I-8419, para 108. Ordinary legislative procedure is the procedure used for most EU law-making. Before the Lisbon Treaty, it was known as the codecision procedure. See art. 294 TFEU.
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acting by a qualified majority. The fact that only a majority vote is required in the Council could make it easier for such a measure to be adopted.
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See n. 4 above.
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unanimity among Council members. Any measure adopted must also be implemented by the Member States in accordance with their constitutional requirements. Although a convincing argument can be put forward for action on the basis of citizenship, it will be much harder to adopt a measure under this head than on the basis of the Internal Market provisions identified above. The chances of moving forward on this basis are thus slim.
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McCartan Turkington Breen v Times Newspapers [2001] 2 AC 277, para 10. Leander v Sweden (1987) 9 EHRR433, at para 74. Gaweda v Poland (2004) 39 EHRR 4, at para 43.
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Transparency requirements are thus likely to comply with art. 10, but it is doubtful whether positive requirements of this type would be held to be legally required. Art. 11 of the Charter is not, however, entirely consonant with art. 10 ECHR. Unlike art. 10, it expressly emphasises the importance of media pluralism. Transparency requirements might thus be argued to be necessary in order to ensure respect for media pluralism. Moreover, art. 52.3 of the Charter itself acknowledges that the EU remains free to offer more extensive legal protection than that in the ECHR. However, art. 11 of the EU Charter cannot be used as a direct basis for legislation in this field. The incorporation of the EU Charter in the Lisbon Treaty, through art. 6(1) of the TEU, entails that the Charter is legally binding on the institutions of the EU, and on the Member States only when they are enacting or implementing EU law. Moreover, it should be noted that the EU Charter states in art. 51(2) that it does not establish any new power or task for the Community or the Union, or modify powers and tasks defined by the Treaties.35 But can the EU Charter be used in combination with any other Treaty articles, either as the basis for legislation or to put pressure on Member States through other means to ensure that such information is made available? Art. 2 of the TEU states that the Union is founded on the values of respect for, inter alia, freedom, democracy, equality, and the respect for human rights. Art. 7 TEU makes provision for the Council to conclude, after consulting the European Parliament, that there is a clear risk of a serious breach by a Member State of one of the values in art. 2. Ultimately, it is possible for the Council to suspend the voting rights of a Member State that is found to have seriously and persistently breached these values. This provision could, in theory, be used to put pressure on Member States to ensure media ownership information was made available. It is, however, extremely doubtful whether failure to enact media transparency provisions could be classified as a serious breach of human rights within the terms of these provisions. Indeed, Commissioner Reding in her October 2009 address to the European Parliament stated that the clause would only apply if there was a complete breakdown of national jurisdictional orders and fundamental rights systems.36 Although the European Parliament has expressed concern over the lack of media pluralism in Italy, it has not been willing to put these provisions to the test. Alternatively, art. 352 TFEU might be considered as a basis for legislation to further freedom of expression and media pluralism within the terms of art. 11 of the EU Charter, in coordination with art. 2 TEU. Art. 352 TFEU enables measures to be introduced in order to realise one of the EUs objectives, if no other provision of the Treaty gives the EU the necessary power to adopt it. The continuing interest and work
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of the EU in the area of media pluralism requires that a certain amount of media ownership data is available at a minimum. This is demonstrated by the EUs recently developed Media Pluralism Monitor, which specifically employs transparency as a test to measure media pluralism.37 Therefore, an improvement in media transparency in the EU could be deemed necessary for future work in the field of media pluralism. Reliance on art. 352 TFEU in this context would, however, be extremely controversial and could be seen as an attempt to get around the clear constraints on the application of the EU Charter set out in art. 6(1) TEU. Moreover, art. 352 is only available where there is no other basis for action in the Treaty and in this context, as discussed above, action under the Internal Market and Citizenship provisions are, in principle, possible.38 Art. 352 also requires Council unanimity for a measure to be adopted and for all these reasons it is thus a speculative and unattractive basis on which to found a legislative initiative.39 The recently established European Agency for Fundamental Rights has the purpose of providing the EU and Member State institutions with expertise regarding fundamental rights when they are implementing EU law.40 This entails that the Agency can only act autonomously with regard to activities covered by the EU Treaty.41 It has no competence to adopt regulatory measures, nor does it monitor the situation of human rights in the Member States with a view to supporting action under art. 7 TEU, or conclusively determine the legality of acts of the EU or implementing measures by the Member States. It may, however, be noted that the Commission has exercised its powers under the Treaty to adopt a three-step approach to addressing media pluralism, and it is arguably open for the Agency to engage with this process, particularly were the Media Pluralism Monitor to reveal limited media ownership transparency across the Member States. Similarly, the Agency might raise transparency issues if the EU were to consider action in the field of citizenship rights or corporate transparency.
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Independent Study on Indicators for Media Pluralism in the Member States: Towards a RiskBased Approach, p. 49, accessible at: http://ec.europa.eu/information_society/media_taskforce/doc/pluralism/study/final_report_09.pdf. See further Craufurd Smith, n. 6 above, p. 664. See Craufurd Smith, n. 6 above, pp. 664665. Art. 2 and art. 3(3) Council Regulation (EC) No 168/2007, establishing a European Union Agency for Fundamental Rights, (2007) OJ L53/1. The Agency opened in March 2007. See http://fra.europa.eu/fraWebsite/home/home_en.htm. A von Bogdandy & J von Bernstorff, The EU Fundamental Rights Agency within the European and international human rights architecture: The legal framework and some unsettled issues in a new field of administrative law, Common Market Law Review 46 (2009), at 10511053.
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The Agency acts, therefore, as an advisory body, and its main task is to collect and disseminate data and information to be used as a basis for developing future EU fundamental rights policies and action.42 The task of disseminating this data makes it possible for the Agency to signal problem areas, which can prompt the EU institutions to take action. The Agency publishes annual and thematic reports and is expected to use these to highlight examples of good practice, something that could be helpful in this context.43 It should be noted, however, that the Agencys work is concentrated around a 5-year work programme. The current programme includes participation of the citizens of the Union in the Unions democratic functioning and the information society and thus could potentially extend to the question of media transparency.44 Unfortunately, the programme does not provide for work designed to identify and analyse the role of the media in the democratic functioning of the EU during 2010,45 and the work undertaken in 2009 was not relevant to media pluralism and transparency.46 Work concerning the Information Society is currently mainly geared towards data protection. As the Agency is unlikely to take action under its own work programme in the near future regarding ownership transparency, the Agency will likely only consider the consequences of a lack of media ownership data if it is asked to do so by the European Parliament, the Council or the Commission.47 Should this happen, the Agencys report may become part of a legislative process48 and could as such influence policy making. As the European Parliament has shown an interest in media transparency, it is the most likely body to request research into the necessity of making media ownership data available, though it would have to do this on its own initiative. Another option would be to invoke the Fundamental Rights Platform, as discussed below.
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Art. 4(1)a Council Regulation (EC) No 168/2007, n. 40 above. Ibid., art. 4(1)g and e. Art. 2g&h Council decision 2008/203/EC, implementing Regulation (EC) No 168/2007 as regards the adoption of a Multi-annual Framework for the European Union Agency for Fundamental Rights for 20072012, (2008) OJ L63/14. FRA Annual Work Program 2010, p. 32. FRA Annual Work Program 2009. Council Regulation (EC) No 168/2007, n. 40 above, art. 4(1)c. Art. 4(2) Council Regulation (EC) No 168/2007, n. 40 above.
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4. C ON C L US IO NS
A ND
R E C OM M E ND AT I ONS
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preferable to apply a consistent set of rules across all media sectors, print as well as audiovisual, and thus avoid linking ownership disclosure to the licensing system.49
Note paras 7 and 41 of the Explanatory Memorandum to Recommendation No. R (94) of the Council of Europe. European Parliament Committee for Culture and Education, Draft Report on public service broadcasting in the digital era: the future of the dual system (rap. Ivo Belet) 2010/2028(INI), 3 June 2010, at para.12. Art. 10 of the Explanatory Memorandum to Recommendation No. R (94) of the Council of Europe. The exact participation requirements can be found at http://fra.europa.eu/fraWebsite/civil_society/fr_platform/participation/participation_en.htm.
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allows one million citizens from a number of Member States to invite the European Commission to put forward legislative proposals required to implement the Treaty. After all, nothing could be more important to Europe's citizens than knowing who owns the media on which they depend for information.
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