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Brussels, 27 February 2008

State aid: Commission welcomes proposed changes to financing of Irish public service broadcasters and closes investigation

The European Commission has decided to close its investigation under EC Treaty state aid rules into the financing regime of the Irish public service broadcasters RTÉ and TG4 following commitments from Ireland to amend the current regime. The main modifications concern the clarification of the public service remit, the entrustment of new activities, the transparency of accounts, supervision and control. The Commission concluded that the commitments were suitable to bring the regime in line with the state aid rules and ensure the necessary transparency and proportionality of funding. Ireland has now until December 2008 to implement these commitments in national law.

Competition Commissioner Neelie Kroes commented: “I am satisfied that the co-operation between Ireland and the Commission has brought the funding system of public service broadcasters in Ireland in line with EU state aid rules. The new system will provide more transparency, proportionality and accountability and public funding will be limited to what is necessary to allow public service broadcasters to fulfil their mission.”

The Commission initiated the procedure concerning the financing of the Irish public service broadcasters in March 2005, following a complaint from a private competitor (see IP/05/250). The complainant argued that the public service remit of the public broadcasters was not sufficiently precise and that they were not properly entrusted with public service obligations. Furthermore, the complainant claimed that the use of public funds lacked the necessary transparency to verify that the level of funding was proportionate and to make sure that public funds were not used for commercial activities.

Following discussions between the Commission and the Irish authorities, Ireland submitted in January 2008 commitments aimed at ensuring compliance with the state aid rules. The Commission's decision identifies the requirements for the future funding system to be in line with the state aid rules and concludes that the commitments proposed by Ireland are adequate to remove the competition concerns.

The amendments aim at ensuring that the scope of the public service remits of the public service broadcasters RTÉ (Radio Teilifís Éireann) and TG4 (Teilifís na Gaeilge) is sufficiently precise. In a number of circumstances, public value and sectoral impact assessments will be introduced and an explicit entrustment will be required for new activities. The fulfilment of the public service tasks will be supervised by an independent body. Transparent accounts and enhanced controls will be introduced to prevent overcompensation and cross-subsidisation of commercial activities. Finally, there will be safeguards to ensure that public broadcasters carry out their commercial activities on market terms.

As in other cases, the Commission will monitor the implementation of the commitments at national level.

The non-confidential version of the decision will be made available under the case number E 4/2005 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

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