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  1. Public Service Media and EU State Aid Law: A Balancing Act between Internal Market and Public Value Anna Herold European Commission Audiovisual and Media Policies Public Service Broadcasting in Europe in the Digital Age Exeter, 1 July 2010

  2. Legal Basics I: What’s in the Law Article 107(1) TFEU Treaty: prohibition of State aid (e.g. direct grants from State budget or licence fees) Article 106(2) TFEU Treaty: exemption possibility for public service activities “Amsterdam Protocol” (now: No 29): recognition of special status of PSB AVMS: Co-existence of private and public audiovisual media service providers is a key feature of the European audiovisual media market

  3. Legal Basics II: Broadcasting Communication Broadcasting Communication of 2001, revised in 2009: main tool guiding/binding for the Commission Service of general economic interest and clearly defined as such by the Member State (definition); Commission checks only if no manifest error Explicitly entrusted by the Member State with the provision of that service (entrustment) Application of the competition rules of the Treaty (in this case, the ban on State aid) must obstruct the performance of the tasks assigned to the undertaking and the exemption from such rules must not affect the development of trade to an extent that would be contrary to the interests of the Community (proportionality)

  4. Revision Necessary in the Digital Era No general overhaul but focus on some issues: Public service remit: Recognition of development of remit into new areas (internet, mobile): PSB as key players in content creation in line with Digital Agenda But: safeguards against market distortions due to publicly funded new media activities Overcompensation: Control mechanisms against overcompensation

  5. What’s New: Ex Ante Evaluation of Significant New Services New activities in fields not yet explored by PSBs possible if meeting “the same democratic, social and cultural needs of the society” Specific prior evaluation procedure (+ open public consultation) for significant new audiovisual services Developments parallel to elaboration of the BBC public value test, but ex ante test largely drawn from Commission experience in the German case

  6. BBC Public Value Test (2007) Not EU-originated but reaction to internal criticisms Economic approach Two-step process: Public Value Assessment by BBC Trust: are BBC’s public purposes furthered (reach, quality, impact, and cost and value for money) Market Impact Assessment by Ofcom More public outreach: extreme openness

  7. German Three-Step Test (2009) Result of 2007 Commission decision Focus on editorial value/competition Three-step test: Offer should meet the democratic, social, and cultural needs of society Offer should contribute in a qualitative way to ‘editorial competition’ (distinguishable from competitors/quality and diversity) Which expenditure required? (transparency) A less open process: fewer external actors

  8. Commission Approach: UK Inspired but Drawing from German Case Common: compliance with public service mission + value for money assessment MS to balance market impact against the value of the services for society: similar/substitutable offers, editorial competition, market structure and position of PSB, level of competition and impact on private initiatives If predominantly negative, State aid proportionate only if justified by the added value in terms of serving the social, democratic and cultural needs of society To be carried out by bodies independent from PSBs (BBC Trust, German broadcasting councils) Open public consultation key

  9. There is No One-size Fits All Solution Tests may lead to different outcomes for similar issues: Catch-up services: UK: de facto 44-day catch-up DE, AT, FR: 7-day catch-up Scope of the test: DE: Bestandstest (also for existing services) Other MS only new services Regulatory set-up: heavier in DE than UK Definition of PS remit may differ: erotic content explicitly excluded in AT, not in DE Common: long and expensive everywhere!

  10. Thank you for your attention! anna.herold@ec.europa.eu