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Brussels, 26th June 1997

European Commission requests Flemish Government to end VTM advertising monopoly

On the initiative of Karel van Miert, Member with special responsibility for competition, the Commission has adopted a decision establishing that the advertising monopoly awarded to the commercial television station VTM is incompatible with Community law. This monopoly was awarded to VTM on the basis of decisions taken in, inter alia, November 1987 and December 1991 by the Flemish Executive pursuant to Flemish media legislation, which recognizes the right of a single private television station to target the entire Flemish Community and, in so doing, broadcast advertisements.

The Commission procedure was triggered by a complaint from the British commercial broadcasting organization VT4 Ltd., part of the audiovisual group Scandinavian Broadcasting System. In a decision of January 1995, the Flemish Minister for Culture, Hugo Weckx, refused VT4 access to the cable in Flanders and Brussels, basing himself on the monopoly held by VTM and on the fact that VT4 was regarded by the Flemish Government as a Flemish broadcasting organization which had set up in the United Kingdom in order to circumvent Flemish Community legislation. At the request of VT4, the Council of State subsequently suspended this decision and VT4 was able to broadcast via the cable network in Flanders and Brussels.

The Commission decision, which was taken on the basis of Articles 90 and 52 of the EC Treaty, now makes it possible for both VT4 and other television broadcasting organizations to set up a permanent or secondary establishment in Flanders with a view to broadcasting, via the Belgian cable network, advertisements directed at the Flemish public.

The Commission states that, in this case, there are no compelling reasons of general interest, within the meaning of the case law of the Court of Justice, such as cultural-policy objectives, which could justify the monopoly held by VTM. The cultural-policy objectives originally invoked by the Flemish Executive (maintaining pluralism in the Flemish press by means of the advertising revenue of VTM, whose shareholders are publishers of Flemish daily and weekly newspapers and magazines) cannot be pursued using means which have the effect of eliminating all competition and, in addition, provide no guarantee that the advertising revenue will be used to benefit daily and weekly newspapers and magazines.

After all, this revenue, which is divided among the shareholders according to their stake in VTM's capital, could be used for activities devoid of any cultural aims. Moreover, there is a possibility that the capital of VTM could fall into the hands of a single shareholder, thereby working against the maintenance of pluralism in the media. While VTM initially had nine shareholders, only three publishing groups - Persgroep NV, Roularta Mediagroep and the Belgian subsidiaries of the Dutch VNU group - now own shares.

In view of developments in the market concerned, the Flemish authorities now acknowledge that reasons of general interest can no longer be invoked in favour of VTM.

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