State aid: Commission closes investigation into financing regime of Austria's public service broadcaster ORF
European Commission - IP/09/1603 28/10/2009
Brussels, 28 th October 2009
The European Commission has concluded that the financing regime of Austria's public service broadcaster ORF is now, following formal commitments from the Austrian Government, in line with EU state aid rules and has closed its investigation. In particular, Austria has undertaken to clarify ORF's public service remit, to limit ORF's financing to what is strictly necessary to fulfil its public service tasks, to organise a public consultation on proposed new media services and to clearly separate ORF's commercial activities from its public service mission. This decision applies for the first time the criteria outlined in the Commission's revised Broadcasting Communication of 2 July 2009 (see ).
Competition Commissioner Neelie Kroes said “I am satisfied that the commitments offered by Austria will ensure the right balance between the need to ensure high quality public service broadcasting and the need to maintain a level playing field in the sector".
Following complaints from VÖZ, the association of Austrian newspaper publishers, and VÖP, the association of commercial television operators in Austria, the Commission began an investigation into the public financing of ORF.
On 31 January 2008 the Commission informed Austria of its preliminary concerns that the financing of ORF by means of programme fees was incompatible with EC Treaty state aid rules (see IP/08/130 ). The Commission's main concerns were the unclear definition of the public service remit, in particular for online activities and sports programmes, and the lack of adequate supervision for the public service mandate. Furthermore, no adequate mechanisms were in place to prevent overcompensation (and so potential cross-subsidies of activities outside ORF's public service remit) and to ensure that ORF carried out its commercial activities in line with market principles.
After several meetings between the Austrian authorities and the Commission, an agreement was reached on the framework for bringing the public financing of ORF and its recapitalisation after the crisis into line with EU state aid rules.
Clearer public service remit and ex ante test
The public service remit will be clarified by additional criteria for new media activities. Austria will create a new media authority charged with supervising the remit of ORF. ORF will have to submit proposals for new media services to this independent media authority, which will have to launch a public consultation to test the added value of the proposals for Austrian society and their market impact, giving citizens and stakeholders the opportunity to comment on ORF's plans for new media offers.
The financing of ORF will be limited to what is strictly necessary for the fulfilment of its public service tasks, including an effective ex post control of possible overcompensation. ORF's commercial activities will be clearly separated from the provision of public service activities. The newly created media authority will not only supervise ORF's compliance with the public service mandate but also ensure that ORF is not unduly overcompensated for the cost of providing its public service activities. ORF will be obliged to sublicense unused sport rights to third parties and the programming of ORF Sport Plus will in future focus on minority sports of interest to Austrians. ORF's planned new special interest channels for information and culture will be subject to prior public consultation on their added value and their potential market impact. The programming of the existing TV channels ORF1 and ORF2 will be subject to an ongoing internal quality control procedure and complaints can be lodged with the new media authority.
Austria has 12 months to implement the commitments and the Commission will monitor their implementation.
ORF may launch new online services before all appropriate measures are formally implemented, subject to the condition that such offers are not commercially exploited before the new media authority has tested their public value and market impact. This solution will in particular apply to the planned new "ORF TV-THEK" which will offer downloads for ORF's own TV and radio productions.
The non-confidential version of the decision will be made available under the case number 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 .
On 2 July 2009 the Commission adopted a revised Broadcasting Communication ( ).The Commission had previously adopted more than 20 decisions on Member States' financing regimes for public service broadcasting based on the 2001 Broadcasting Communication (see ). Examples include the revisions made to the public sector broadcasting regimes in France ( ), Portugal ( ), Belgium ( ), Ireland ( ) and Germany ( ).