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Brussels, 20 July 2005

Freedom of establishment and capital movements: Commission scrutinises Greek restrictions on media ownership

The European Commission has decided to send Greece an official request for information about the obligation imposed on all media companies to have registered shares held by individuals. It considers that the obligation in question raises problems of compatibility with the provisions of the EC Treaty on the free movement of capital and freedom of establishment. The Commission’s request takes the form of a letter of formal notice, which is the first stage in the infringement procedure provided for in Article 226 of the Treaty. Greece is being given two months in which to reply.

Greek legislation (Laws 2328/1995, 1746/1988 and 3310/2005) requires media companies – television stations, radio stations, newspapers and magazines – to have registered shares held by individuals (in the words of the legislation, “registered until a natural person is identified as owner”). As far as television and radio are concerned, there is a clause to the effect that companies lawfully established outside Greece in a country where there is no obligation that shares be registered until a natural person is identified as owner may be authorised under certain conditions to hold up to 15% of the capital of a radio or television company.

These provisions greatly restrict the investment and establishment opportunities of companies lawfully established in other Member States in the absence of similar provisions in the law of their country of establishment and, what is more, introduce specific arrangements for those companies.

On the basis of the information in its possession, the Commission considers that the Greek legislation imposes restrictions contrary to the principles of the EC Treaty on companies from other Member States wishing to invest in a Greek media company or to establish themselves in Greece. The legislation does not seem to be dictated by grounds of public policy, public health or public security such as might justify special arrangements for foreign nationals in relation to freedom of establishment nor, for that matter, does it seem to be either suited or proportionate to meeting an aim justified by an overriding reason in the general interest recognised by the Court of Justice, such as corporate transparency or media pluralism.

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