Brussels, 24th April 2007
State aid: Commission closes investigation regarding the financing regime for German public service broadcasters
The European Commission has decided to formally close an investigation under EC Treaty state aid rules into the financing regime for German public service broadcasters in the light of formal commitments from the German Government to amend the current regime. The Commission's decision accepts these commitments, submitted in December 2006, as an adequate means to ensure compliance with general EU Treaty state aid rules and the 2001 Commission Communication on the application of state aid rules to public service broadcasting. The amendments announced include a more precise definition and a proper entrustment of the public service mission in particular as regards new media activities, adequate safeguards against overcompensation and cross-subsidisation, the respect of market principles in commercial activities and more transparency as regards the sublicensing of sports rights. The Commission's investigation, opened in March 2005, was prompted by complaints.
Competition Commissioner Neelie Kroes said “I am pleased that the co-operation between Germany and the Commission has finally resulted in an agreement on a future financing regime which ensures compliance with EU state aid rules. The new regime will allow broadcasters to fulfil their public service mission in the new media environment, while at the same time limiting public funding to what is really necessary and avoiding adverse effects on competition."
Since 2002, private competitors have lodged a series of complaints against the financing of public service broadcasters in Germany, claiming in particular that public funding was not proportionate to the public service needs (overcompensation) and that commercial activities benefited from public funds (cross-subsidisation). They expressed concerns that the current financing regime led to disproportionate adverse effects on competition also in the area of new media services and the acquisition of sport rights.
In March 2005, the Commission informed Germany of its preliminary view that the current financing regime was no longer compatible with the Single Market (see IP/05/250).
The German authorities came forward with proposals for amending the financing regime. After further discussions, the Commission and the German authorities reached an agreement, first on a number of guiding principles (see MEMO/06/273), and later on the measures necessary to ensure compliance with EU state aid rules (see MEMO/06/494). The formal submission of these commitments by Germany in December 2006 paved the way for today's decision to close the investigation.
Today's decision confirms the Commission's view that the current financing regime is not in compliance with EU state aid rules, identifies the requirements for the future financing regime and accepts the commitments given by Germany as adequate to remove competition concerns.
The public service remit will be further clarified by setting a number of conditions for new media activities. In addition, public service broadcasters need to submit proposals for new media services for formal entrustment by the Länder. The financing of public service broadcasters will be limited to what is necessary for the fulfilment of their public service tasks, including adequate ex post controls of possible overcompensation. Public service broadcasters' commercial activities will be clearly separated from the provision of public service activities and subject to the requirement of market conform behaviour. External control of compliance with these requirements will be increased. Finally, public service broadcasters will make transparent the scope and conditions of sublicensing sports rights to third parties. For additional information, see MEMO/07/150.
Germany has two years from now to implement the commitments. The Commission will monitor the implementation of the commitments at national level.
The Commission assesses state aid measures in the broadcasting sector with regard to EC Treaty rules (Article 86(2)) requiring undertakings entrusted with the operation of services of general economic interest to be subject to the Treaty's competition rules and the principles of the Commission’s 2001 Communication on the application of state aid rules to public service broadcasting (see IP/01/1429; further information on the applicability of state aid rules to public broadcasting is provided in MEMO/05/73).
Based on this set of rules, the Commission has already in the past examined existing financing regimes in various Member States and proposed measures to ensure full compliance with the state aid rules. In all cases handled by the Commission so far, agreement was reached with the Member States concerned on the necessary amendments of the financing regimes, so that the Commission could eventually close the investigation. Examples include the revisions made to the public sector broadcasting regimes in France, Italy, Spain and Portugal (see IP/05/458 and IP/06/349).