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Brussels, 17 th June 2009

State aid: Commission proposes appropriate measures to bring Swedish press aid into line with Single Market

The European Commission has formally proposed, under EC Treaty rules on state aid, appropriate measures to Sweden to make a Swedish scheme providing for state support to Swedish newspapers compatible with EU state aid rules. The Commission does not call into question the objective of media pluralism which is pursued by Sweden. However, the Commission considers that some amendments to the aid scheme are necessary in order to avoid disproportionate distortions of competition and trade. The proposals include a gradual reduction in aid ceilings for large metropolitan newspapers and a cap on operation costs. Sweden now has to inform the Commission within three months (which may be extended, if necessary) whether it can agree to the proposed amendments Failing an agreement, the Commission may open a formal state aid investigation.

Competition Commissioner Neelie Kroes commented: "The Commission recognises the importance of media pluralism for the cultural, democratic and public debate in Member States and the importance of newspapers in this context. However, running a newspaper is also a commercial activity and the Commission has a duty to prevent undue distortions of competition and trade resulting from public subsidies. The current economic climate has serious negative implications for the written press, especially for newspapers that do not receive aid".

The Swedish press aid scheme has been in place since 1971, before Sweden's accession to the European Union. It is therefore considered as existing aid and its assessment is subject to a specific cooperation procedure between Sweden and the Commission. The scheme provides, amongst others, for aid to the second largest (and smaller) newspapers in each city/county, with the aim of contributing to media pluralism.

In November 2008, following complaints, the Commission started an investigation and found that the press aid scheme constitutes state aid within the meaning of Article 87(1) of the EC Treaty. Such aid can be compatible with the Single Market if it pursues a goal of common interest, is proportionate and does not give beneficiaries an undue advantage over their competitors.

The promotion of media pluralism and diversity of views is an objective of common interest, and the press aid scheme targets this objective. However, the Commission's investigation found that the Swedish press aid scheme, in its current form, does not meet the proportionality test because it gives an excessive amount of aid to large press groups that publish wide circulation metropolitan newspapers, without fixing a threshold in relation to the total operating costs for publishing the newspapers.

Therefore, the Commission suggests the following amendments:

  • Reduce the aid amounts for large circulation metropolitan newspapers to ensure proportionality. Given the long duration of the scheme and taking into account the implications of the current economic crisis on the media environment, a progressive phasing out from the previous ceiling to the new limit would be acceptable. This would ensure that a sudden reduction of subsidies would not endanger the financial position of the beneficiaries.

  • The ceilings applicable to high and medium-frequency provincial newspapers and low-frequency newspapers can be maintained.

  • Introduce a threshold of total operating costs for publishing the newspaper in order to ensure the incentive effect of the aid and its proportionality.

  • Limit the aid in time (e.g. six years) and carry out a subsequent review of its impact on media pluralism and competition before it could be renewed.

If the appropriate measures are accepted by Sweden, t he non-confidential version of the decision will be made available under the case number E 4/2008 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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