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IP/06/349

Brussels, 22nd March 2005

State aid: Commission closes inquiry into financing of Portuguese public broadcaster following commitments

Following commitments to change the funding system of the Portuguese public service broadcaster RTP, the European Commission has closed the existing procedure under EC Treaty state aid rules (Article 88(1)). Portugal has agreed to implement measures to increase transparency and proportionality in its funding system, which will prevent cross-subsidies for commercial activities

Competition Commissioner Neelie Kroes said “The Commission recognises the need for the public service broadcaster to enjoy stable financing. The Portuguese authorities have agreed to make the financing system more transparent and to avoid unnecessary market distortions This is another example of good cooperation between the Commission and Member States on the financing of public broadcasters.”

Towards the end of 2003, the Commission issued preliminary requests to several Member States, including Portugal, asking them to review certain aspects of the existing financing systems for their national public broadcasters (see IP/03/1399 and IP/03/1686). In April 2005, the Commission closed its enquiry concerning the French, Italian and Spanish public broadcasters, following amendments of - or commitments to amend - the respective funding systems (see IP/05/458).

The Commission and the Portuguese authorities have now agreed on the necessary amendments to ensure that the financing of RTP respects the principles laid down in the Commission’s 2001 Communication on the application of state aid rules to public service broadcasting (see IP/01/1429). In particular, safeguards will be introduced to keep the financing of RTP within the minimum necessary to ensure the proper execution of its public service tasks and from unduly benefiting its commercial activities (thereby avoiding overcompensation and cross-subsidies). Moreover, changes will be introduced to ensure that public and private broadcasters compete on equal terms in commercial markets such as TV advertising (market conform behaviour for commercial activities).

The Commission’s decision today formally recommends to Portugal to implement these measures and, at the same time, takes note of the Government’s acceptance to adopt them by the end of 2006.

The financial restructuring agreement signed between the Portuguese authorities and RTP in 2003 is not part of today’s decision and will be dealt with in a separate procedure.

Similar investigations are pending as regards the German, Irish and Dutch public broadcasters (see IP/05/250). For further information on the applicability of state aid rules to public broadcasting, see MEMO/05/73.

Information on the present case will be available on the Commission’s web site at: http://ec.europa.eu/competition/state_aid/register/ii/by_case_nr_203.html


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