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Public Financing of Public Service Broadcasting and its Qualification as State Aid

With Particular Regard to the "Altmark Trans" Jurisprudence

von Benjamin Linke (Autor:in)
©2016 Dissertation 151 Seiten

Zusammenfassung

The book sheds light on the demands of Art. 107(1) TFEU regarding public funding of public service broadcasting (PSB). Broadcasting is of particular importance in the modern structure of democracy. PSB provides broadcasting services that are of higher quality and of more cultural value to the community than services provided by commercial broadcasters. To ensure the operation of PSB, Member States of the European Union have introduced various measures to support broadcasters. These support measures have to comply with European State aid law, which seeks to prevent overcompensation. In its Altmark Trans-ruling, the ECJ laid down specific criteria under which compensation for services of general economic interest (SGEI) should not be considered State aid in the sense of Art. 107(1) TFEU. The author focuses on the Altmark-criteria. Apart from Art. 107(1) TFEU, he also looks at the effect of the Amsterdam Protocol, which is occasionally argued to have a significant impact on the application of the State aid rules to PSB.

Inhaltsverzeichnis

  • Cover
  • Title
  • Copyright
  • About the author
  • About the book
  • This eBook can be cited
  • Editorial
  • Table of content
  • A. Introduction
  • B. Public service broadcasting in the context of State aid
  • I. Definition
  • II. Public value
  • III. Compensation for public broadcasting services
  • C. Requirements of State aid and their existence in public service broadcasting
  • I. Is public funding for public service broadcasting constituting State aid?
  • 1) Favouring
  • a) Public service broadcasting as a service of general economic interest (SGEI)
  • (1) Characteristics of services of general economic interest
  • (2) Control standard of ‘manifest error’
  • (3) Does public service broadcasting meet the characteristics of the services of general economic interest in principle?
  • b) The Altmark Trans jurisprudence
  • 2) Granted by Member States or through State resources
  • (1) Burden of State budget
  • (a) PreussenElektra-ruling
  • (b) Essent-ruling
  • (c) Reception of the Essent-ruling
  • (d) Assessment
  • (2) Imputability
  • (a) Stardust Marine-ruling
  • (b) Pearle-ruling
  • (c) Assessment
  • 3) Distortion of or threat to distort competition
  • 4) Affect trade between Member States
  • 5) Intermediate conclusion
  • II. Burden of proof
  • 1) Art. 107(1) TFEU
  • 2) Art. 106(2) TFEU
  • III. Modification of the State aid-assessment through the Amsterdam Protocol?
  • 1) Legal exception or derogation from Art. 107(1) TFEU?
  • 2) Impact of the Amsterdam Protocol
  • a) Impact on the definition of public service obligations
  • b) Impact on the question of proportionality of the measure
  • c) Impact on the burden of proof
  • D. Does public funding of public service broadcasting comply with the Altmark-criteria?
  • I. 1st Criterion: Definition of and entrustment with public service obligations
  • 1) Public service obligations (or ‘which activities can be part of the remit’)
  • a) Public service obligations in public service broadcasting
  • (1) Segregation from commercial broadcasters?
  • (2) New conditions applied by the Commission?
  • b) Application of the criterion
  • c) Special areas of public service obligations
  • (1) Sport events or entertainment programmes
  • (2) New media services
  • (3) Pay-services
  • (4) Digital channels/special-interest channels
  • 2) Clear definition (or ‘precision of the definition’)
  • a) ‘Common’ approach
  • b) Criticism regarding the ‘common’ approach
  • c) Scope to clarify the definition
  • 3) Entrustment
  • II. 2nd Criterion: Objective and transparent establishment of compensation parameters
  • 1) Parameters
  • 2) Prior establishment
  • 3) Objective manner
  • 4) Transparent manner
  • III. 3rd Criterion: Overcompensation
  • 1) Net cost effect
  • a) Cross-subsidisation and separation of accounts
  • b) Receipts
  • c) Reasonable profit
  • 2) Control mechanisms
  • 3) Surplus
  • 4) Anti-competitive practice
  • IV. 4th Criterion: Efficiency
  • 1) Is the application of the fourth criterion necessary?
  • a) Chronopost-ruling
  • b) BUPA-ruling
  • c) Decisions of the Commission
  • 2) Public procurement procedure
  • a) General requirements
  • b) Public procurement procedures in the context of public service broadcasting
  • 3) Efficiency-test
  • a) Analysis of the costs
  • (1) Benchmark comparison or analytical approach
  • (2) Typical undertaking
  • (3) Well run undertaking
  • (4) Adequately provided with necessary means
  • b) Possibilities of assessing the efficiency in public service broadcasting
  • (1) Market price
  • (a) Assessment of the prices
  • (b) Usage of the resources
  • (2) Punctual benchmark-comparison
  • (3) Analysis of the processes
  • (a) Is such an assessment possible?
  • (b) Practical conduct
  • (4) The possibility of additional rationalisation
  • (5) Monitoring of quality?
  • (6) Heuristic
  • (7) Intermediate conclusion
  • E. Conclusion
  • Appendices

← 12 | 13 →

A.  Introduction

Broadcasting is of particular importance in the modern structure of democracy. It helps building cultural identity, develops citizenship and has the potential of strengthening social cohesion.1 Consequently, in the European tradition, broadcasting has become part of public services, i.e. infrastructural services supported by the state to meet public needs.2 Such public service broadcasting (PSB) provides broadcasting services that are of higher quality and of more cultural value to the community than services provided by commercial broadcasters. To ensure the operation of PSB, Member States of the European Union have introduced various measures to support broadcasters.

Over the last two decades, the public aid provided to public service broadcasters has become more and more controversial. This has not always been the case. Up to the late 70s/beginning of the 80s, broadcasting was performed solely on a monopolistic or oligopolistic basis due to the limited technical possibilities,3 and, as a result, this support did not have the potential to influence competition. By virtue of new transmission technologies, the market was opened up to private broadcasters, which did not receive public support.4 Until the middle of the 80s all West European countries were seeing the introduction of private broadcasters that were solely financed by revenues earned from commercial activities (e.g. sale of advertisement space).5 As public service broadcasters and commercial broadcasters were competing for the same license rights (e.g. sports, films), the same viewers and (at least partly) for the same advertisers and sponsors, public funding was seen more critically as it carried the potential to distort competition in the broadcasting market.6 The situation aggravated as advertising revenues were falling by virtue of the significantly ← 13 | 14 → increased number of channels.7 In particular, (possible) competitors of the favoured broadcasters saw considerable potential for market damage as the tasks of the public service broadcasters were broadly defined, thus enabling broadcasters to move both vertically and horizontally into neighbouring markets.8

European State aid law was soon discovered by competitors as an area of law that might preclude funding measures for public service broadcasters. Hence, in 1992, two Spanish commercial broadcasters filed the first State aid complaints regarding this matter.9 Until then, precedents, or any other form of guidelines as to how to solve these cases, were completely lacking.10 The Commission issued its first final decision in October 1996,11 followed by decisions regarding the financing of the German channels ‘Kinderkanal’ and ‘Phoenix’12 and a decision concerning the British channel ‘BBC News 24’13 in 1999. Additionally, in 2001, the Commission adopted a communication on PSB which provided guidelines for the Member States regarding the conditions under which the Commission would see public funding to be in line with the requirements of State aid law.14 Since 2001, more than 20 decisions have been made based on the Communication.15 In 2009 the Communication adopted in 2001 was superseded by new guidelines.16 ← 14 | 15 →

Despite the various decisions of the Commission,17 and those of the CFI,18 the question as to if and when public funding of public service broadcasters is to be qualified as illegal State aid has not yet been clarified.19 In particular, a ruling of the European Court of Justice (ECJ) is still lacking.

In its Altmark Trans-ruling,20 the ECJ (in a case concerning public transportation services) laid down specific criteria under which compensation for services of general economic interest (SGEI) should not be considered State aid in the sense of Art. 107(1) TFEU. These criteria are significant for the assessment of public funding for PSB, as PSB is part of the SGEI.21 Nevertheless, the Commission frequently applies Art. 106(2) TFEU – a derogation from Art. 107(1) TFEU – as the decisive ← 15 | 16 → law, whereas the question whether the measures constitute State aid in the sense of Art. 107(1) TFEU is usually22 answered in the affirmative.23 This focus on Art. 106(2) TFEU is also illustrated in the aforementioned Communication of 2009, since these guidelines mention the Altmark-criteria, but do not give any further explanation as to their application to PSB.24

Rather than for compelling legal reasons, the shift towards Art. 106(2) TFEU is the result of difficulties in the application of the Altmark-ruling. Qualification of public funding as non-state aid, however, is accompanied by considerably more advantages for the beneficiary than a declaration that the measure is compatible with the internal market. According to Art. 108(3) TFEU, for example, Member States shall not introduce State aid without the prior approval of the Commission (the so-called standstill obligation). The approval-procedure, however, does not need to be carried out if the measure is not State aid. Since it is not yet common practice for the Member States to implement the procedure according to Art. 108(3) TFEU there are also significant risks to consider when solely relying on a compliance with Art. 106(2) TFEU. Beneficiaries not complying with Art. 107(1) TFEU could face serious proceedings in front of national courts. Contrary to the proceedings in front of the Commission, where compliance with Art. 106(2) TFEU prevents the recovery of State aid, national courts have to order the recovery of any benefit received as long as the Commission has not declared the measure compatible with the internal market.25 Even if compatibility is declared, national courts are generally required to order the recovery of benefits arising from the infringement of Art. 108(3) TFEU and the consequent untimely granting of the aids (for example interests).26 Moreover, a breach of Art. 108(3) TFEU obliges the national courts to prevent a future payment ← 16 | 17 → from taking place.27 At last, every granting act (e.g. contract, administrative decision) is invalid as a result of the Member State’s breach of Art. 108(3) TFEU.28

Due the aforementioned focus of the Commission, Art. 106(2) TFEU has been covered in much more detail in academic literature in contrast to the application of Art. 107(1) TFEU and the Altmark-judgment in relation to PSB. Although it has been argued that compliance with the criteria set out in the Altmark-judgment is impossible for public service broadcasters,29 it is still not clarified as to if and when public funding for PSB might be qualified as non-State aid. An in-depth analysis of the possibility of compliance with the Altmark-judgment is lacking.

This work seeks to shed light on the demands of Art. 107(1) TFEU regarding public funding of PSB. Specific focus is placed on the Altmark-judgment, in particular, the frequently neglected ‘fourth criterion’. Consequently, the work tries to enhance our understanding of the application of Art. 107(1) TFEU and contribute to the clarification of a still opaque area of law. Apart from Art. 107(1) TFEU, the work also looks at the effect of the Amsterdam Protocol (the content of the Amsterdam Protocol has now been carried over to Protocol 29 of the Lisbon Treaty), which is occasionally argued to have a significant impact on the application of the State aid rules to PSB. Although the work does not cover the exceptions according to Art. 106(2) and Art. 107(2–3) TFEU, it should be noted that the present analysis is also intended to enrich the discussion on the requirements of Art. 106(2) TFEU on PSB, as most of the requirements of the article are congruent with those of the Altmark-judgment.

Before delving into the examination of Art. 107(1) TFEU and its application to PSB, the work gives a brief overview of the significance of PSB and its financing. ← 17 | 18 →


1 Katsirea, Public Broadcasting and European Law, p. 323.

2 Kübler, in: Fuchs/Schwintowski/Zimmer, Festschrift für Ulrich Immenga zum 70. Geburtstag, p. 231.

3 Schnaitter, Möglichkeiten und Grenzen der Ausgestaltung des Programmauftrags der öffentlich-rechtlichen Rundfunkanstalten, p. 16. Cf. also Niejahr, in: Montag/Säcker, Münchener Kommentar zum Europäischen und Deutschen Wettbewerbsrecht (Kartellrecht) – Band 3, Sektoren para. 134; Tigchelaar, EStAL 2003, 169, 169 et seq.

4 Cf. Commission, Communication from the Commission on the application of State aid rules to public service broadcasting (OJ C 320/5 of 15.11.2001), para. 2.

5 Cf. Schnaitter, Möglichkeiten und Grenzen der Ausgestaltung des Programmauftrags der öffentlich-rechtlichen Rundfunkanstalten, pp. 16 et seq.

6 Katsirea, Public Broadcasting and European Law, pp. 323 et seq.

7 Katsirea, Public Broadcasting and European Law, p. 324.

8 See Depypere/Tigchelaar, Competition Policy Newsletter 2004 (2), 19, 19 et seq. who mention the example of a cooking programme that leads to the publication of cookery books. Another example would be the launch of a website.

9 Cf. Bartosch, in: Koenig/Bartosch/Braun, EC Competition and Telecommunications Law, p. 164; Katsirea, Public Broadcasting and European Law, p. 324; Tigchelaar, EStAL 2003, 169, 170.

10 Niejahr, in: Montag/Säcker, Münchener Kommentar zum Europäischen und Deutschen Wettbewerbsrecht (Kartellrecht) – Band 3, Sektoren para. 134.

11 Commission, Decision of 02.10.1996, State aid No NN 141/95, RTP.

Details

Seiten
151
Jahr
2016
ISBN (PDF)
9783653059649
ISBN (ePUB)
9783653949759
ISBN (MOBI)
9783653949742
ISBN (Paperback)
9783631665688
DOI
10.3726/978-3-653-05964-9
Sprache
Deutsch
Erscheinungsdatum
2015 (Dezember)
Schlagworte
Service of general economic interest Beihilfe television licence fee Benchmark comparison Rundfunkgebühren Dienstleistung von allgemeinem wirtschaftlichen Interesse
Erschienen
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2016. 151 pp.

Biographische Angaben

Benjamin Linke (Autor:in)

Benjamin Linke acquired law degrees from the Universities of Tübingen (Germany) and Edinburgh (UK). He works as an attorney at law and specializes in public procurement law, State aid law and public commercial law.

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Titel: Public Financing of Public Service Broadcasting and its Qualification as State Aid
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154 Seiten