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IP/10/978

Brussels, 20 July 2010

State aid: Commission approves new tax-based funding system for Spanish public broadcaster RTVE

The European Commission has approved the new tax-based funding system for the Spanish public broadcaster RTVE, on which it had opened a formal investigation under EU state aid rules in December 2009 (see IP/09/1861). Spain abolished advertising and other commercial activities of RTVE and replaced this source of income by new taxes on TV and telecommunications operators. The Commission had doubts concerning the compatibility of the new taxes with EU law, in particular the rules on electronic communications networks and services. However, the Commission has now concluded that the compatibility of the aid to RTVE is not affected by the legality of the new taxes and that the measure is in line with the state aid rules, because it ensures that RTVE will not be overcompensated for providing public broadcasting services.

"Spain's choice to place greater emphasis on RTVE's public service mission as part of the reform of public service broadcasters is in line with the policy of media plurality which the EU supports. Moreover, it significantly reduces the risk of anticompetitive spill-overs between public and commercial activities" said Joaquín Almunia, Commission Vice President in charge of Competition Policy.

The new Spanish law (Law 8/2009) of 1 September 2009 provides that advertising, teleshopping; merchandising and pay-per-view services at RTVE will be discontinued with immediate effect. Spain intends to compensate RTVE for the abolition of these revenues with specifically dedicated income, generated from two new fiscal measures and one existing measure, in addition to the existing state financing of RTVE:

  • A tax on the revenues of free to air commercial broadcasters (3%) and pay-TV broadcasters (1.5%);

  • A 0.9% tax on the revenues of electronic communications operators;

  • A share of 80% of the already existing levy on radio spectrum use, up to a maximum amount of €330 million.

The rules on state aid to public service broadcasting leave Member States a wide discretion on the way they finance the services of public broadcasting, provided there is no unfair discrimination between operators and no over-compensation.

During its in-depth investigation, opened on 2 December 2009 (IP/09/1861), the Commission had to ascertain that the new mechanism of financing RTVE would not lead to overcompensation. Moreover, the Commission had to verify whether the newly created taxes form an integral part of the aid scheme. In the latter case, the compatibility of the aid would be affected by the legality of these taxes. In a separate procedure, carried out by the Information Society services of the Commission, the the Commission had expressed doubts whether the tax on operators of electronic communications was in line with the rules on electronic communications networks and services (Directive 2002/20/EC of 7 March 2002) (see IP/10/322).

The Commission's investigation showed that the amount of the aid to be granted to RTVE does not depend on the revenue generated by these taxes, but is only determined by the net operation costs of the broadcaster. Therefore, the compatibility of the aid is not dependent on the question whether the taxes are eventually legal or not, which is being examined in the separate procedure. Moreover, Spain demonstrated that safeguards to avoid overcompensation were in place, in particular external auditing of RTVE's annual accounts.

The non-confidential version of the decision will be made available under the case number C 38/2009 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.

The Commission today adopted a similar decision concerning France (see IP/10/979).


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