The European Union Media Ownership Transparency

7/30/2019 The European Union Media Ownership Transparency

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E U A N D M E D I A O W N E R S H I P T R A N S P A R E N C Y

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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 Council of Europe Recommendation No. R (94)13 and Recommendation CM/Rec (2007) 2 ......... 6

2.1.ii The European Convention on TransfrontierTelevision ....................................................... ...... 7

2.2 EU transparency measures of specific relevance for

the media sector ........................................................... 9

2.2.i European Parliament resolution of 25September 2008 ................................................... 9

2.2.ii Directive 2007/65/EC ........................................ 10

2.2.iii Directive 2000/31/EC ....................................... 11

2.3 Generally applicable EU rules relating to competition

and corporate transparency ........................................ 11

2.3.i 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 Art. 114 TFEU ................................................... 15

3.1.ii Articles 50 and 62 TFEU .................................... 16

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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O P E N S O C I E T Y M E D I A P R O G R A M 3

Yolande Stolte and Rachael Craufurd Smith1

THE EUROPEAN UNION AND MEDIA OWNERSHIP

TRANSPARENCY: THE SCOPE FOR REGULATORY

INTERVENTION

1. INTRODUCTION

In modern economies and societies, the availability of information is central to betterdecision making by voters, consumers, and investors. Much of that information isprovided by the media, including newspapers, television, and radio, which collectinformation and make it available to the public. A crucial question then is how themedia 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 accurateand up-to-date data on media ownership lies at the very heart of any media pluralismregulation, as it would be impossible to take steps to address excessive mediaconcentrations without the tools to identify them.

1 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.2 S. Djankov, C. L. Mcliesh, T. Nenova, and A. Shleifer, Who Owns the Media? Journal of Law

and Economics,vol. XLVI (October 2003) 341381.


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Although the Council of Europe and the European Parliament have brought outrecommendations regarding media transparency in the last few years, these have notbeen acted on.3 It is left to Member States to implement legislation regarding mediaownership transparency, and there is by no means a unified or standard approach to befound across Europe.

The recent publication of the European Commissions Media Pluralism Monitor maysuggest that the tide is turning, in favour of a more pro-active approach.4 But there isno certainty of this. In a recent speech to the European Parliament, CommissionerViviane Reding emphasised that although one could arrive at a generousinterpretation 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 theproblem in question.5 Indeed, earlier attempts by the Commission to put forwardproposals for a directive on media ownership in the 1990s foundered not so much onthe absence of a Treaty basis as on political opposition from the Member States.6

A more contained regulatory initiative, focusing solely on transparency, is potentiallymuch 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 shouldbe done.

It would certainly be attractive for the European Parliament, which, in its 2008Resolution on concentration and pluralism in the media in the European Union sought toencourage greater transparency in media ownership, and would enable theCommission to take concrete steps to address a problem that to date has largely eludedit.7 Nor would this be such a significant step for the EU, in that it has already takenlimited steps to require transparency in the audiovisual media field in the AudiovisualMedia Services (2007/65/EC) and Electronic Commerce (2000/31/EC) Directives, as

3 See sections 2.1.i and 2.2.i below.4 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.5 Commissioner V. Reding, Freedom of Expression and Information in Italy: Declaration in the

European Plenary, 8 October 2009.6 G. Doyle, From Pluralism to Ownership: Europes Emergent Policy On Media Concentra-

tions 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

Review652672.

7 See section 2.2.i below.


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well as more extensive steps regarding share ownership generally through the 2007Transparency Directive (2007/14/EC).8

The challenge in relation to a media transparency proposal is to establish a convincinglegal and factual basis for EU intervention. As an initial contribution to this debate, thepresent 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 proposea measure in this field.

The report identifies two main legislative bases for action: the Internal Market, andCitizenship. In relation to both of these heads it will be necessary to establish thataction is required at the EU, as opposed to Member State, level. In relation to theInternal Market head, it will be necessary to show that there are concrete barriers to therealisation of the Internal Market which legislation of this type would address.

We also consider the role that the Agency for Fundamental Rights could play incollating information and stimulating debate on media transparency.

We conclude by making several recommendations for further research and possiblecourses of action that may help to put this issue on the political agenda and, ultimately,

lead to an improvement in media transparency.

8 See sections 2.2.ii, 2.2.iii and 2.3.ii.a below.


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2. OVERVIEW OF EXISTING MEASURES AT THE EUROPEAN LEVEL

THAT RELATE TO MEDIA OWNERSHIP TRANSPARENCY

2.1 Council of Europe initiatives

The Council of Europe has adopted two recommendations that, although they do not

propose harmonisation in this context, emphasise the importance of mediatransparency and the need for action by state parties.

These measures are not, however, legally binding and do not appear to have resulted inmajor changes to the way in which states approach transparency. By contrast, theConvention on Transfrontier Television, which applies to cross border televisionbroadcasts, is binding. This includes extensive ownership disclosure requirements,which go considerably beyond those contained in the comparable EU provisions.

The Council of Europe requirements are currently being revised to bring theConvention into line with the EU Audiovisual Media Services Directive (AVMSD),and it is important, from a transparency perspective, that the revision does not result inthe Conventions more exacting requirements being harmonised down to conform tothe minimum standards set by the Directive. It would be extraordinary if the Councilof Europe, which has expressly supported media transparency in the past, were now toact in a way that reduced the standards that it has set in this field.

2.1.i Council of Europe Recommendation No. R (94) 13 andRecommendation CM/Rec (2007) 2

Both these Recommendations are applicable to all media types and both documentshave never sparked legislative attempts. As Recommendations these documents arenotbinding, but the Committee of Ministers can ask member states to inform it of theaction 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 atguaranteeing media transparency but, rather, to suggest courses of action togovernments which either do not have rules on transparency and would like tointroduce such into national legislation, or which already have rules but would like torevise or supplement them. This indicates that they were not suggesting Europeanharmonizationof legislation on media transparency, or proposing to define a standard.

The 2007 Recommendation on media pluralism and the diversity of media contentcan be viewed as an update of the 1994 Recommendation. Several of its provisionsdirectly address transparency and ownership, and take account of thetechnological/digital developments that have occurred since 1994. It specificallydiscusses the need for transparency not only for the regulatory authorities that arerequired 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 amountof information that should be available to the public, in terms of media ownershiptransparency.9

2.1.i i The European Convention on Transfrontier Television10

This Convention applies only to traditional television broadcasts with a transfrontiercharacter.11 The signal does not have to be aimed specifically at another Member State:it suffices that the signal can be received in a different Member State than that wherethe signal originates.12 Given this scope, the Convention does not regulate purelydomestic broadcasting signals.

Art. 6 of the Convention requires any broadcaster to provide information on requestconcerning (at a minimum) the name or denomination, seat and status of thebroadcaster, the name of the legal representative, the composition of the capital, thenature, purpose and mode of financing of the programme service the broadcaster isproviding or intends providing.

Although this article does not require broadcasters to publish this information, it does

require the information to be made available by the competent authority at the requestofanylegal or natural person.13 Art. 6 is, according to the Explanatory Memorandum,specifically aimed at satisfying the interest of the public in knowing the name underwhich the broadcaster is registered or name under which the broadcaster is known bythe public, the composition of a broadcasting organisation, its legal status and mode offinancing, etc.14

This Convention has not been signed by the EU, and art.27 of the Conventionprovides that parties who are EU Member States should only apply the rules in theConvention where there is no EU rule governing the particular subject concerned.Since the AVMSD does cover the issue of transparency, in an admittedly weakenedversion (see below), it may be concluded that the Convention does not here apply tothose EU Member States who have ratified it. The Convention has, however, been

9 Draft Second Protocol amending the European Convention on Transfrontier television,

Explanatory Memorandum T-TT (2009)009FIN, para 189.10 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 2002.11 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.12 See further art.3 of the Convention.13 Para 49, Explanatory Memorandum to the Convention.

14 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 somewhatbroader reach than the AVMSD.

Currently, a revision to the Convention is being prepared, which will bring art.6 intoline 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 nameof the legal representative, the composition of the capital, or the nature, purpose andmode 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, thesecond of which states that Parties will promote full transparency of ownership ofmedia service providers. On the one hand, this new provision is potentially far-reaching in that it imposes on Parties a positive obligation to promote, not simplytransparency, but full transparency of media ownership. On the other, it is morelimited than the existing art. 6, in that it merely calls on Parties to promote such alevel of transparency, and does not require them actually to achieve it. It may also benoted that the existing art. 6 requires the information specified to be made available bythe 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 ensurethat information is made available.

If adopted in this form, it will be necessary to consider whether art. 12 will apply toMember States of the EU if they sign the revised Convention. The existing art. 27 ofthe Convention, discussed above, has been carried forward into the new draft in aslightly amended form in art. 32.2. This indicates that where EU law governs theparticular subject concerned and applicable to the specific case, EU law is to takeprecedence but does not state, as does the existing art. 27, that the Convention ruleswill not apply in this area. Indeed, the new provision states that this is withoutprejudice to the object and purpose of the present Convention. This suggests that theConvention may impose an additional tier of obligations on EU Member Statesbeyond those in the AVMS, provided that they are not inconsistent with the terms ofthe AVMS.

It is also possible to argue that the provisions in art. 12 of the draft revised Conventionhave no direct parallel in the AVMS. Art. 5 of the draft undoubtedly now covers thesame ground as the transparency requirements in art. 3a of the AVMS, but art. 12 onmedia pluralism and diversity of information, has no parallel in the AVMS. There isthus no EU rule governing the particular subject of media pluralism and diversity asset out in the draft revision. If this analysis is correct, EU Member States which sign up

15 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 topromote full transparency of ownership.

Although international law can take effect immediately within the domestic legal orderof some states, in others, such as the UK, international obligations must first beenacted 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 particularprovisions within it. Nevertheless, the Convention, if amended in accordance with thecurrent draft, is a promising basis for promoting media transparency, not only withinthe EU Member States, but across a wider membership. States which sign up to theConvention have committed themselves to promote media transparency and this canbe used as a political tool by pressure groups and interested parties to call for concreteaction at the domestic level. Moreover, the Standing Committee to the Convention,composed of representatives of the State Parties, has the power to makerecommendations concerning the application of the Convention. Standing Committeemeetings could thus prove a useful forum in which to press for a co-ordinated andeffective response to the demands of art. 12.

2.2 EU transparency measures of specific relevance for the mediasector

In the EU context it is also possible to point both to non-binding recommendationsthat explicitly address the question of media ownership transparency, and bindingdirectives that establish minimum transparency requirements for the audiovisual sector.

The AVMSD applies to broadcast and online television programme services, while theElectronic Commerce Directive applies to other on-demand electronic media services,such as online newspapers or radio services. A distinction is thus drawn between radiobroadcasting and printed papers/magazines, which are in this respect unregulated bythe EU, and comparable online services, which are. To fall within the ambit of theseEU provisions, the services must have a commercial aspect.

Notably, however, these measures do not require information to be provided about thecomposition of the service provider; hence they fall well short of the Council of EuropeConvention. As a result of these limitations, the general transparency measures that theEU has established in the corporate field are of more assistance. These measures arediscussed in the following section (2.3).

2.2.i European Parl iament resolution of 25 September 2008 16

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

16 Final documentP6_TA(2008)0456.


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of all media outlets to help achieve greater transparency regarding the aims andbackground of the broadcaster and publisher. This shows that there is interest inmedia transparency on several levels in the EU.

2.2.i i Directive 2007/65/EC 17

Art. 3a of the legally binding AVMSD requires Member States to ensure that anyaudiovisual media service provider under their jurisdiction, at a minimum, shall makeeasily, directly and permanently accessible to the recipients of a service at least thefollowing information: (a) the name of the media service provider; (b) the geographicaladdress at which the media service provider is established; (c) the details of the mediaservice provider, including his electronic mail address or website, which allow him tobe contacted rapidly in a direct and effective manner; (d) where applicable, thecompetent regulatory or supervisory bodies.

These minimum requirements are, however, insufficient to guarantee transparency forthe public, as the information that must be made available does not concerninformation regarding parent companies, syndicates, finances, major share holdings,etc.

Ironically, this article may even complicate transparency regulation. Only the MemberState which has jurisdiction over a broadcaster can regulate its services and once abroadcaster complies with these regulations, no other Member State may exercisesecondary control, i.e. impose stricter regulations, except under a limited number ofderogations, which are not applicable in the field of transparency. As this provisionapplies to all fields covered by the Directive,18 and transparency is (at least partly)covered by the Directive, Member States will not be able to impose strictertransparency regulation on signals originating from other Member States.

To counter this, one might argue that the transparency requirements in the Directiveare not designed to facilitate the citizens right to know who has provided news andinformation. Rather, they ensure that consumers have the information they need to

contact a particular media company in order, for example, to exercise their right ofreply or complain about material transmitted. The provision is thus complaint, notinformation, oriented.

17 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.

18 Art. 2a AVMSD, n. 17 above.


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2.2.i i i Directive 2000/31/EC 19

The E-Commerce directive is applicable to Information Society Services, which aredefined as any service normally provided for remuneration, at a distance, by electronicmeans and at the individual request of a recipient of services.20 Radio and televisionbroadcastsare specifically exempt from the Directive, though on-demand video and

radio services do fall within the definition. The transparency requirements that applyto these media services are nearly identical to those of the AVMSD, though slightlymore stringent requirements are made for commercial communications.21Interestingly, most online newspapers will fall under the E-Commerce Directive, thusapplying the same transparency requirements to them as the AVMSD does toaudiovisual media services, though offline newspapers remain unregulated. As theystand, therefore, the existing rules are limited in both scope and ambit.

2.3 Generally applicable EU rules relating to competition andcorporate transparency

Although the EU has established rules designed to ensure fair competition and thecontrol of media mergers, the application of these rules will not provide complete and

accessible information about media ownership. Considerably more important are thoseEU rules that require the ownership of major shareholdings in certain companies to bemade public.

2.3.i Competition law

Although the application of EU competition law may help to protect media pluralismby preventing collusive practices or mergers that could restrict consumer choice, it canonly be used sporadically, on a case by case basis, to guarantee transparency. Generallyspeaking, even if competition law makes a certain amount of ownership data andfinancial information available to the public (and steps are taken by the EU not toreveal 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 beable to locate such information in the decided cases, or have the necessary training tounderstand it.

19 Directive 2000/31/EC on certain legal aspects of information society services, in particular

electronic commerce, in the Internal Market, (2000) OJ L178/ 116.20 Art. 1(2) Directive 98/34/EC, as amended by Directive 98/48/EC.21 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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require extensive forensic investigation to ascertain who actually controls the mediacompany.

Although it is an extremely useful first step, the Directive is ultimately of limited use inthe field of media transparency. This indicates the importance, when framing specifictransparency 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 thatare able to exert a material influence over the operation of the media company.

2.3.ii.a Commission Directive 2007/14/EC25This Directive requires issuers of public securities in regulated markets within the EUto ensure transparency for investors through disclosure of certain information to thepublic. At a minimum, the following need to be disclosed: financial reports,information on major holdings of voting rights, and information disclosed pursuant tothe Market Abuse Directive.

As indicated above, the Directive only applies to companies that issue public securitiesin a regulated market, as defined in the Directive, and not all public securities aretraded on regulated markets. In addition, certain media organisations do not issue

public securities at all. Information relating to the immediate shareholders may notreveal those who ultimately control a media company, and it may be difficult for thelayperson to access and decipher the information that is available.

Although the Directive is undoubtedly a useful measure, and reveals that the EU maylegally impose transparency requirements even in relation to the print media (since allmedia organisations are potentially covered by this Directive), it fails to provide asufficient answer to the problems of media transparency.

25 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 COMPETENCE TO ACT IN THE FIELD OF MEDIA

OWNERSHIP T RANSPARENCY

At the moment it is mainly left to Member States to enact legislation regarding mediaownership transparency, and there is by no means a unified approach to be foundacross Europe.

Yet there are a number of potential legal bases for EU intervention in this field, set outbelow. The strongest contenders are those that relate to the completion of the InternalMarket and Citizenship. The Citizenship provisions are more difficult to enact,requiring unanimity in the Council, whereas the challenge for those considering actionon an Internal Market basis will be to establish that the existing patchwork of domesticprovisions creates a real barrier to trade within the EU.

3.1 Completion of the Internal Market

One of the objectives of the EU is to support the creation of an Internal Market thatoperates without barriers to trade. Arts. 34 and 56 of the Treaty on the Functioning ofthe European Union (TFEU) therefore protect the free movement of goods andservices respectively, while Art. 49 TFEU protects the freedom of establishment. Forthe EU to intervene in this context, it will be necessary to show both that action at theEU level is required and that the existing patchwork of transparency rules creates abarrier to the exercise of one or more of these freedoms.

In relation to the former requirement, it is apparent that even after a number ofCouncil of Europe and European Parliament recommendations there has been noconcerted effort by Member States to ensure transparency. In relation to the latter, twoscenarios might be envisaged:

a) The cost to a company of meeting exacting disclosure requirements or the

implications of releasing ownership information that it wishes to keep secret

could influence where a company decides to locate (establish) itself or its

subsidiaries. It may be noted that such requirements do imposeadministrative burdens on media companies.

b) If a Member State were to require all media operators active in its

territory, even if not formally established there, to provide ownership

information, this would impose an additional cost on companies located in

other Member States with less onerous requirements. This could impede the

free movement of goods or services, depending on the media concerned.26

We are not aware of any such domestic provisions, though this should be

investigated.

26 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 Art. 114 TFEU

Where differences in national legislation form a barrier to the functioning of theInternal Market, measures can be taken based on art. 114 TFEU. This article allows

the EU to adopt measures to approximatenational provisions in order to further theestablishment and functioning of the internal market.

The mere existence of disparities between national rules is not sufficient justificationfor the application of art. 114.27 The disparities have to be such that they obstruct thefundamental freedoms and thus have a direct effect on the functioning of the InternalMarket.28 This leaves the question whether the differences in national legislationrelating to media transparency would be considered sufficiently appreciable to disruptthe functioning of the Internal Market.29 This judgement will hinge mainly on howdifficult it would be for a media company to comply with stricter transparencyregulations and the costs involved for the company. It is difficult to predict which waythis would go; the Commission would initially need to accept that there was asufficient basis to propose legislation and the requisite number of Member States andthe 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 challengeits legality under Art. 263 TFEU before the Court of Justice, on the grounds that therewas not a viable Treaty basis. This is an area where further research into domesticprovisions is certainly required.

It may be noted that in relation to broadcast and on-demand television services, theAVMSD could ensure that there is no appreciable effect on the Internal Market in thecontext of scenario 3.1.b above: Member States will not have jurisdiction to imposestricter transparency requirements on television services originating from otherMember States (see 2.2.ii above). This would create a disparity between the regulationof 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 adoptedby the European Parliament, acting by a majority of the votes cast, and the Council,

27 Case C-376/98 GermanyvParliament and Council[2000] ECR I-8419, para 84.28 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 60.29 Case C-376/98 GermanyvParliament and Council[2000] ECR I-8419, para 108.30 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 theCouncil could make it easier for such a measure to be adopted.

3.1.i i Articles 50 and 62 TFEU

The TFEU also provides for directives, under the ordinary legislative procedure, to

facilitate the freedom of establishment and provision of services. In particular, art.50(g) TFEU provides for the coordinationto the necessary extent of the safeguardswhich, for the protection of the interests of members and others, are required byMember States of companies or firms within the meaning of the second paragraph ofArticle 54 with a view to making such safeguards equivalent throughout the Union.

One argument in support of intervention on this basis is that the E-CommerceDirective and the AVMSD, with their limited transparency requirements, wereintroduced on the basis of the equivalent to arts. 50 and 62 TFEU in the previous ECTreaty. If variable rules in relation to these requirements were considered to createsufficient barriers to trade for EU intervention, then variable rules relating toownership disclosure should also form the basis for EU action. The problem, as withmedia concentration measures, may not be so much that a legal basis cannot beformulated as that there is insufficient political will for action.

It should be noted that the Commission has indicated that it will consider reviewingMember State regulations systematically in order to determine the health of Europesmedia pluralism in the third stage of its initiative on media pluralism.31 If the MediaPluralism Monitor is put into operation, it should reveal how and where transparencyrules are being applied across the Member States. This in turn should enable goodpractice to be identified, thereby assisting in the formulation of effective andmeaningful proposals for EU action in this field.

3.2 Article 25 TFEU: Citizenship

Art. 10.3 of the Treaty on European Union (TEU) states that every citizen shall havethe right to participate in the democratic life of the Union, and EU citizens have theright to vote in European Parliament and municipal elections (arts. 20 and 22 TFEU).Most citizens obtain information about politically relevant events from the media, inparticular the audiovisual media, yet if they do not know who owns a given mediaservice it is difficult for them to evaluate it. It is thus arguable that media transparencyis essential for citizens to be able to participate meaningfully in the political process.

Art. 25 TFEU enables the Council, after consulting the European Parliament, to adoptprovisions to strengthen or add to the rights of citizens already listed in the Treaty.This, however, is to be achieved through the special legislative procedure and requires

31 See n. 4 above.


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unanimity among Council members. Any measure adopted must also be implementedby the Member States in accordance with their constitutional requirements.

Although a convincing argument can be put forward for action on the basis ofcitizenship, it will be much harder to adopt a measure under this head than on thebasis of the Internal Market provisions identified above. The chances of moving

forward on this basis are thus slim.

3.3 Freedom of expression and information

The Lisbon Treaty came into force on 1 December 2009, making the Charter ofFundamental Rights of the EU legally binding. Freedom of expression is laid down inart. 11 of the Charter, which not only specifically includes the right to receiveinformation but also states that freedom and pluralism of the media are to berespected.

It can be argued that media transparency is an essential element of freedom ofexpression. One of the main justifications for the need for freedom of expression, andmore specifically the freedom to receive information, is that citizens cannot participate

in public life if they are not informed about matters which may call for considerationor action.32 As noted above, in our society the main means of receiving thisinformation is through the media, but it is impossible for individuals to assign thecorrect value to this information unless they are aware of the precise source of theinformation. This can be provided through transparency regulations, which aretherefore an essential part of the freedom of expression.

Art. 52.3 of the EU Charter states that where a Charter right corresponds to a right inthe ECHR it should be given the same meaning and scope. Art. 11 of the EUCharter parallels art. 10 ECHR, and rulings by the European Court of Human Rights(ECtHR) suggest that the guarantee of freedom of information in art. 10 ECHRcannot be stretched to impose a positive obligation on media companies to provideinformation they do not wish to divulge.33

Transparency requirements do not, however, interfere with the content of mediaservices; they merely enable consumers (and citizens) to properly evaluate that content.In Gaweda v Poland, the ECtHR accepted that newspapers could be required to notifya state body with basic details relating to the papers title, place of publication, editorand so forth prior to publication, but indicated that if this were extended to editorialcontrols this would be inappropriate from the standpoint of freedom of the press.34

32 McCartan Turkington Breen v Times Newspapers[2001] 2 AC 277, para 10.33 Leander v Sweden(1987) 9 EHRR433, at para 74.

34 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 doubtfulwhether 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. Unlikeart. 10, it expressly emphasises the importance of media pluralism. Transparencyrequirements 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 remainsfree to offer more extensive legal protection than that in the ECHR.

However, art. 11 of the EU Charter cannot be used as a directbasisfor legislation inthis 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 theEU, 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 notestablish any new power or task for the Community or the Union, or modify powersand tasks defined by the Treaties.35

But can the EU Charter be used in combination with any other Treaty articles, eitheras the basis for legislation or to put pressure on Member States through other means toensure that such information is made available? Art. 2 of the TEU states that theUnion 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 toconclude, after consulting the European Parliament, that there is a clear risk of aserious breach by a Member State of one of the values in art. 2. Ultimately, it ispossible for the Council to suspend the voting rights of a Member State that is foundto have seriously and persistently breached these values.

This provision could, in theory, be used to put pressure on Member States to ensuremedia ownership information was made available. It is, however, extremely doubtfulwhether failure to enact media transparency provisions could be classified as a seriousbreach of human rights within the terms of these provisions. Indeed, CommissionerReding 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 ordersand fundamental rights systems.36 Although the European Parliament has expressedconcern over the lack of media pluralism in Italy, it has not been willing to put theseprovisions to the test.

Alternatively, art. 352 TFEU might be considered as a basis for legislation to furtherfreedom of expression and media pluralism within the terms of art. 11 of the EUCharter, in coordination with art. 2 TEU. Art. 352 TFEU enables measures to beintroduced in order to realise one of the EUs objectives, if no other provision of theTreaty gives the EU the necessary power to adopt it. The continuing interest and work

35 See to similar effect art. 6(1) TEU.

36 See n. 5 above.


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of the EU in the area of media pluralism requires that a certain amount of mediaownership data is available at a minimum. This is demonstrated by the EUs recentlydeveloped Media Pluralism Monitor, which specifically employs transparency as a testto measure media pluralism.37 Therefore, an improvement in media transparency inthe 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 controversialand could be seen as an attempt to get around the clear constraints on the applicationof the EU Charter set out in art. 6(1) TEU. Moreover, art. 352 is only available wherethere 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 andfor all these reasons it is thus a speculative and unattractive basis on which to found alegislative initiative.39

The recently established European Agency for Fundamental Rights has the purpose ofproviding the EU and Member State institutions with expertise regarding fundamentalrights when they are implementing EU law.40 This entails that the Agency can onlyact 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 humanrights in the Member States with a view to supporting action under art. 7 TEU, orconclusively determine the legality of acts of the EU or implementing measures by theMember States.

It may, however, be noted that the Commission has exercised its powers under theTreaty to adopt a three-step approach to addressing media pluralism, and it is arguablyopen for the Agency to engage with this process, particularly were the Media PluralismMonitor to reveal limited media ownership transparency across the Member States.Similarly, the Agency might raise transparency issues if the EU were to consider actionin the field of citizenship rights or corporate transparency.

37 Independent Study on Indicators for Media Pluralism in the Member States: Towards a Risk-

Based Approach, p. 49, accessible at:

http://ec.europa.eu/information_society/media_taskforce/doc/pluralism/study/final_report_09.pdf.38 See further Craufurd Smith, n. 6 above, p. 664.39 See Craufurd Smith, n. 6 above, pp. 664665.40 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.41 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 anddisseminate data and information to be used as a basis for developing future EUfundamental rights policies and action.42 The task of disseminating this data makes itpossible for the Agency to signal problem areas, which can prompt the EU institutionsto take action. The Agency publishes annual and thematic reports and is expected touse 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-yearwork programme. The current programme includes participation of the citizens of theUnion in the Unions democratic functioning and the information society and thuscould potentially extend to the question of media transparency.44 Unfortunately, theprogramme does not provide for work designed to identify and analyse the role of themedia in the democratic functioning of the EU during 2010,45 and the workundertaken in 2009 was not relevant to media pluralism and transparency.46 Workconcerning 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 nearfuture 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 EuropeanParliament, the Council or the Commission.47 Should this happen, the Agencys reportmay 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 mostlikely body to request research into the necessity of making media ownership dataavailable, though it would have to do this on its own initiative. Another option wouldbe to invoke the Fundamental Rights Platform, as discussed below.

42 Art. 4(1)a Council Regulation (EC) No 168/2007, n. 40 above.43 Ibid., art. 4(1)g and e.44 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 L63/14.45 FRA Annual Work Program 2010, p. 32.46 FRA Annual Work Program 2009.47 Council Regulation (EC) No 168/2007, n. 40 above, art. 4(1)c.

48 Art. 4(2) Council Regulation (EC) No 168/2007, n. 40 above.


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4. CONCLUSIONS AND RECOMMENDATIONS

4.1 A legal basis for action?

The foregoing analysis leads us to conclude that there is scope for EU action to supporttransparency of media ownership, either on an Internal Market or Citizenship basis.

Given that legislation in the citizenship field requires Council unanimity, the mostrealistic option would be to seek an initiative under one of the available InternalMarket heads. The most promising avenue would appear to be the co-ordinationprovisions in art. 50 and 62 TFEU.

The EU has already taken action to promote transparency both in specific mediasectors and in relation to corporate interests more generally, indicating that such aninitiative is in principle possible, even in relation to the printed press. The fact that theMember States have not themselves taken such measures forward indicates that there isa need for EU action to coordinate the field. Such a measure would also be relativelycontained.

A clear factual basis would have to be made for such an initiative, requiring furtherresearch on the position across the EU Member States.

4.2 Delimiting the scope of any future measure

Careful consideration should be given to the potential scope of any such measure. Inparticular, it seems necessary to ensure that information is made available not onlyregarding direct shareholdings of a certain size in media companies but also in relationto individuals or bodies able to materially influence a companys operation.Consideration is also needed as to by whom, and where, this information should bemade available: by the media organisations themselves in, for example, annual reports;though independent media regulators or, possibly, as a special section of generalbusiness registers? The cost of any such system needs to be considered. Therequirement that the media firm itself makes this information available to the public

on request would impose the least cost on state bodies and, possibly, on the mediaorganisations themselves, but would result in information being fragmented anddifficult to collate.

Traditionally, both radio and television broadcasts have been subject to regulation. Theperceived greater influence of broadcast content compared with the press and thelimited amount of bandwidth in the transmission spectrum have been taken asjustification for regulating the broadcast media. The printed press is not subject to asimilar level of regulation within the EU and only a few states retain (limited) licensingsystems. While transparency in relation to broadcast radio and television services couldthus be implemented through the licensing system, by requiring certain ownership andfinancial data to be disclosed as a condition of receiving a licence, this possibility doesnot generally exist for the written press. To prevent undue fragmentation it would be


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preferable to apply a consistent set of rules across all media sectors, print as well asaudiovisual, and thus avoid linking ownership disclosure to the licensing system.49

4.3 Getting transparency onto the political radar

How best can this issue be raised within the EU? Clearly, the Commissions current

analysis of media pluralism provisions as part of its three-step approach provides avery relevant venue.

In addition, the European Parliament, a staunch supporter of action in the field ofmedia pluralism, could be encouraged to ask the Agency for Fundamental Rights toinvestigate the need for EU action and to flag-up examples of good practice, or itselftake up the issue in one of its committees. There are encouraging signs that theEuropean Parliament will continue to press for specific measures to be taken toenhance media transparency. In its recent draft report on public service broadcastingin the digital era: the future of the dual system, the Parliament's Committee forCulture and Education noted that transparency of ownership of private broadcasters isnot guaranteed in all Member States, and called on the European Commission tomonitor and support progress to this end.50

Another venue for consideration is the Fundamental Rights Platform, which is theAgencys main channel for cooperation and information exchange with civil societyorganisations. The Platform has a wide membership base, including national andinternational organisations ranging from universities to the Red Cross. Individualmembers of the platform can make suggestions for the annual work programme of theHuman Rights Agency. They are thus in a position to emphasise the need for furtherresearch into media transparency to facilitate the participation of the citizens of theUnion in the Unions democratic functioning, within the current 5-year plan.51Membership is open, though applications for 2010 are now closed. It would bepossible for an institute aimed at the functioning of the media in the democraticsociety to become a member of the platform.52

Finally, these civil society organisations could actively promote the case for a citizensinitiative, provided for in art. 11 of the amended Treaty on European Union. This

49 Note paras 7 and 41 of the Explanatory Memorandum to Recommendation No. R (94) of the

Council of Europe.50 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.12.51 Art. 10 of the Explanatory Memorandum to Recommendation No. R (94) of the Council of

Europe.52 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 EuropeanCommission to put forward legislative proposals required to implement the Treaty.After all, nothing could be more important to Europe's citizens than knowing whoowns the media on which they depend for information.

The European Union Media Ownership Transparency

Documents

Transcript of The European Union Media Ownership Transparency