1. 1 8 / 0 9 / 2 0 1 3 , B O C C O N I U N I V E R S I T Y
K O N S T A N T I N A . B A N I A @ E U I . E U
EU MEDIA LAW: HOW DOES THE EU
COMPETITION AUTHORITY SHAPE
MEDIA POLICIES?

2. EU MEDIA LAW: THE PROBLEM OF
COMPETENCE
Article 6 TFEU:
• The Union shall have competence to carry out actions to
support, coordinate or supplement the actions of the
Member States. The areas of such action shall, at
European level, be:
• (a) protection and improvement of human health;
• (b) industry;
• (c) culture (MEDIA);
• (d) tourism;
• (e) education, vocational training, youth and sport;
• (f) civil protection;
• (g) administrative cooperation.

3. EU MEDIA LAW: THE PROBLEM OF
COMPETENCE
• Article 2(5) TFEU:
• In certain areas and under the conditions laid down
in the Treaties, the Union shall have competence to
carry out actions to support, coordinate or
supplement the actions of the Member
States, without superseding their competence in
these areas.

4. EU MEDIA LAW: THE PROBLEM OF
COMPETENCE
• BUT, ON THE OTHER HAND, Article 3(1) TFEU:
The Union shall have exclusive competence in the
following areas:
• (a) customs union;
• (b) the establishing of the competition rules
necessary for the functioning of the internal market;
• (c) monetary policy for the Member States whose
currency is the euro;
• (d) the conservation of marine biological resources
under the common fisheries policy;
• (e) common commercial policy.

5. EU MEDIA LAW: THE PROBLEM OF
COMPETENCE
• Article 2(1) TFEU:
When the Treaties confer on the Union exclusive
competence in a specific area, only the Union may
legislate and adopt legally binding acts […]
• BUT, in these cases, Article 167(4) TFEU also applies:
The Union shall take cultural aspects into account in
its action under other provisions of the Treaties, in
particular in order to respect and to promote the
diversity of its cultures.

6. EU MEDIA LAW: THE PROBLEM OF
COMPETENCE
• MEDIA FROM A
CULTURAL POINT OF
VIEW:
• LIMITED
COMPETENCE: The EU
cannot adopt legally
binding acts, MS
entitled to formulate
media policies as
they wish.
• MEDIA FROM AN
ECONOMIC POINT OF
VIEW
• EXCLUSIVE
COMPETENCE: Only
the EU can adopt
legally binding acts.
• And, in area of
culture, must take
particularities into
account.

7. EU MEDIA LAW: THE PROBLEM OF
COMPETENCE
• EXAMPLE:
• BBC is based in the UK but may broadcast in Italy.
How? AVMS Directive, country of origin principle.
THAT’S OK FOR THE EU TO REGULATE (ECONOMIC
ACTIVITY)
• What if Italy decides that it wants strict rules on the
protection of minors (e.g. child pornography) or on
advertising? THAT’S OK FOR THE MS TO REGULATE
(MEDIA POLICY TO PROTECT PUBLIC INTEREST)

8. EU MEDIA LAW: EU COMP LAW AS A
CASE STUDY
• Why ?
• EU has exclusive competence to establish
competition rules
• AND
• The EU competition authority, the
Commission, handles the vast majority of
transactions of interest to media industry, e.g.
mergers, State aid cases, agreements that may
affect trade in the EU and multinationals abusing
their dominant position.

9. THE ISSUE OF COMPETENCE: SUMMARY
• EU has undisputed competence to regulate media
companies as economic entities
• BUT, EU has limited competence to regulate media
organizations as actors vital for preservation of
democracy, promotion of cultural diversity, etc.
• IN MANY CASES, tensions arise and conflicting interests
come to the fore, e.g. PROMOTION OF ECONOMY v.
DEMOCRACY, etc.
• EU COMP law excellent example due to the volume of
transactions and importance of decisions.

10. EU COMPETITION LAW: THE BASICS
• Article 101 TFEU: AGREEMENTS BETWEEN COMPANIES THAT
MAY RESTRICT COMPETITION (agreements on the
licensing of football rights)
• EU Merger Regulation: CONTROL OF M&As (media
concentration and pluralism/freedom of expression)
• Article 102 TFEU: ABUSE OF A DOMINANT POSITION (the
Google case)
• Articles 107, 106(2) TFEU: State aids (to public service
broadcasters)

11. AGREEMENTS ON THE LICENSING OF
FOOTBALL RIGHTS
• SPORT AS PART OF
CULTURE
• Falls under national
policy: Forum of social
interaction, function of
social
integration, means of
promoting inter-cultural
dialogue, etc.
[See Commission
(EC), White Paper on
Sport COM (2007) 391
final, 11 July 2007]
• SPORT AS AN
ECONOMIC ACTIVITY
• Bosman ruling of 1995:
out-of-contract
footballers may leave
their clubs without the
clubs receiving a
transfer fee.
[Case C-415/93 URBSFA
ASLB v Bosman [1995]
ECR I-4921]

12. RELATIONSHIP BETWEEN MEDIA AND
FOOTBALL
• IMPORTANCE OF BROADCASTING FOR FOOTBALL
ASSOCIATIONS:
• Exclusive broadcasting rights is an important source
of revenue for sports organizations and clubs.
• TV coverage ensures exposure for a league (new
sponsors, new supporters, etc.).

13. RELATIONSHIP BETWEEN MEDIA AND
FOOTBALL
• IMPORTANCE OF FOOTBALL MATCHES FOR MEDIA
COMPANIES:
• Sports content is decisive for media operators to create
an attractive ‘bouquet’ of programs for their audience.
What happens if a TV channel does not offer matches?
E.g. the German Premiere, the French TPS, etc.
• High AD revenues: Ability to attract young men (they
have a less fixed spending pattern as compared to other
people but watch TV less than others)
• For more details on the relationship between sports and TV see van
Rompuy and Lefever (2009), pp. 243-247 (distributed material)

14. FOOTBALL MATCHES = PREMIUM
CONTENT
• PREMIUM CONTENT = KEY TO COMPETITION
• COMMISSION INVESTIGATIONS
• JOINT SELLING AGREEMENTS (football associations
sell jointly)
• JOINT BUYING: THE EBU Eurovision system
(broadcasters acquire jointly)

15. JOINT SELLING AGREEMENTS – THE
GENERAL RULE
• The general prohibition Article 101(1) TFEU:
• The following shall be prohibited as incompatible
with the internal market:
• all agreements between undertakings, decisions by
associations of undertakings and concerted
practices
• which may affect trade between Member States
• and which have as their object or effect the
prevention, restriction or distortion of competition
within the internal market

16. ARE JOINT SELLING AGREEMENTS
CAUGHT BY ART. 101(1)?
• Agreements between undertakings: Professional
football clubs and their associations engage in
economic activities.
• Trade in the common market must be affected:
Even when rights to NATIONAL sports events are
concerned (e.g. German Bundesliga)
• Have as their object or effect the restriction of
competition: Joint selling agreements restrict
competition between clubs in the market for
premium content.

17. JOINT SELLING AGREEMENTS – THE
EXCEPTION
• BUT, exception under Art. 101(3) TFEU:
• The provisions of paragraph 1 may, however, be
declared inapplicable in the case of any
agreement which contributes to improving the
production or distribution of goods or to promoting
technical or economic progress, while allowing
consumers a fair share of the resulting benefit.

18. JOINT SELLING AGREEMENTS – UEFA
CHAMPIONS LEAGUE
• Agreement coordinated pricing policy of UEFA media
rights
• UEFA broadcasting rights were sold on an exclusive basis
in a single bundle to one broadcaster per territory.
• Why did it violate Art. 101(1) TFEU?
• As a result of the agreement, clubs no longer compete in
the sale of broadcasting rights Market foreclosure
• Rights are sold on an exclusive basis to one broadcaster
Other broadcasters cannot access premium content
• Price-fixing agreement Eliminates price competition
between football entities

19. JOINT SELLING: UEFA CHAMPIONS
LEAGUE
• MODIFICATIONS TO THE AGREEMENT:
• a reduction in UEFA’s exclusive right to sell
(football clubs should be allowed to sell
certain media rights in parallel with UEFA);
• unbundling of the media rights by splitting
them up into several different rights
packages that would be offered for sale to
different third parties;
• the offering of all media rights to the
market, (e.g. internet and mobile
telephony);

20. JOINT SELLING: UEFA CHAMPIONS
LEAGUE
• media rights are offered for a period of a maximum
of three years.
• BUT,
• UEFA will have a right to provide video content on
the Internet one and a half hours after the match
finishes. Live streaming will not be made possible
because of the technical development of the
Internet at this stage, which does not permit the
maintenance of a satisfactorily high quality. This will
of course change over time, making it necessary to
revisit the embargo in the foreseeable future.
IS THIS STILL THE CASE?

21. SUMMARY - JOINT SELLING
AGREEMENTS
• Sports, and especially the relationship between
sports and media, is very tricky in terms of
competence.
• BUT, counting on the economic activities of
broadcasters/football associations, Commission
found its way to regulate relevant arrangements.
• Joint selling/joint buying agreements fall under
Article 101(1) TFEU but may be exempted under
101(3) TFEU if exclusivity restrictions (territory AND
term) are lifted or reduced.

22. EU MERGER CONTROL AND MEDIA
CONCENTRATION
• Media concentration: Not just a European phenomenon
(result of both economics of media markets and politics)
• Why is it important? Negative effects on pluralism /
democracy:
• “It would be dangerous for any person to control too
much of the media because of his or her ability to
influence opinions and set the political agenda” (Lord
McIntosh – Ofcom 2010)
• Concentration of ownership “may result in a skewed
public discourse where certain viewpoints are excluded
or underrepresented” (European Commission, 2007)

23. MEDIA CONCENTRATION – NATIONAL
POLICY TRENDS
• BUT, economic interests have prevailed.
• “[w]hilst the need for a plurality of media sources
remains clear, we are committed to a deregulatory
approach to media markets. From a commercial
point of view, further liberalization would benefit
existing and potential new investors, providing for
further consolidation, greater efficiency, more
scope for investment, and a more significant
international presence” UK Department for
Culture, Media, and Sport (“DCMS”), Consultation
on Media Ownership Rules (2001)

24. MEDIA CONCENTRATION – THE
EUROPEAN STORY
• 1990 and 1992: EP Resolutions on Media
Concentration
• 1992: Commission issues Green Paper on pluralism
and media concentration in the Internal Market
• July 1996: Commission submits first draft - REJECTED
• March1997: Commission submits second draft (with
different name) – REJECTED
• Commission’s official position now: it would not be
appropriate to submit a Community initiative on
media concentration and pluralism.

25. EU MERGER CONTROL – MEDIA
CONCENTRATION
• Merger Regulation the ONLY instrument to address
media concentration in the EU.
• Commission’s role in prohibiting media concentration
VERY LIMITED (1):
• From 1994 – 1998: Prohibited 5 mergers (25% of all
merger operations).
• 1998 - ALL MERGERS HAVE BEEN PERMITTED: –
ECONOMIC INTERESTS PREVAIL IN EU PRACTICE

26. EU MERGER CONTROL – MEDIA
CONCENTRATION
Commission’s role in prohibiting media concentration
VERY LIMITED (2):
• Mainly concerned with:
• PRICES
• ACCESS TO PREMIUM CONTENT (Hollywood films and football
matches)
• NO DECISION CHECKING OPINION-FORMING POWER POST-
MERGER

27. EU MERGER CONTROL – MEDIA
CONCENTRATION
• The ORNAMENTAL exception to the rule:
• Article 21(4) EC Merger Regulation: “Member States
may take appropriate measures to protect
legitimate interests other than those taken into
consideration by this Regulation and compatible
with the general principles and other provisions of
Community law. Public security, plurality of the
media and prudential rules shall be regarded as
legitimate interests within the meaning of the first
subparagraph”.

28. EU MERGER CONTROL – MEDIA
CONCENTRATION
• Art. 21(4) MR – The Newscorp/BSkyB example:
• Concentration was argued to give Rupert Murdoch
a dangerous level of control of the UK media.
• Commission allowed the merger:
• The focus in merger control is whether there is the
ability of the merged entity to profitably increase
prices on defined antitrust markets post-merger.
• Media concentration - pluralism concerns are for
the UK authorities to address.

29. SUMMARY MEDIA
CONCENTRATION
• Trend in national law to deregulate the media because
of pressure from powerful media lobbies, to strengthen
national competitiveness, etc.
• An EU Directive on pluralism never passed and EU
Merger Regulation the only instrument that is used
against media concentration.
• BUT, Commission focuses mainly on prices, turns head
away from democratic concerns.
• Art. 21(4) has played an ornamental role: Does that
mean that powerful media lobbies have won?

30. ABUSE OF A DOMINANT POSITION –
THE BASICS
• Article 102 TFEU:
Any abuse by one or more undertakings of a
dominant position within the internal market or in a
substantial part of it shall be prohibited as
incompatible with the internal market in so far as it
may affect trade between Member States.

31. ABUSE OF A DOMINANT POSITION –
THE BASICS
• STEPS TO DECIDE AN ABUSE OF DOMINANCE CASE:
• Definition of the relevant market
• Market power assessment
• Assessment of abuse
• Imposition of fines or Commitments

32. THE GOOGLE CASE
• FACTS:
• 11/30/2010: Decision to open a formal investigation was
based on complaints launched by Foundem, Ciao and
eJustice: VERTICAL SEARCH ENGINES
• ATTENTION! Google offers several vertical search
tools, e.g. Google Product Search, Google Scholar, etc.
• The three complainants argue that Google has abused
its dominant position in the general search market by
treating them unfavorably in both its paid and unpaid
search results while according preferential treatment to
its own vertical tools

33. INSIDE THE BLACK BOX: HOW DOES
GOOGLE SEARCH WORK?
• Google is an advertising-based medium
• Delivers two types of results:
• Organic / unpaid results: The results that are returned
based on the natural indexing of the website
• AND
• Paid results/sponsored links: Advertisements displayed at
the top and at the right hand side of Google’s search
results page - Description of AdWords platform:
• Advertisers create Google Account
• Google sells keywords and advertisers must bid
• Position the advertisers get = Bid X Quality Score

34. MAIN COMPLAINT: DOWNGRADING OF
COMPETITORS
• 1. Google has been lowering the ranking of the
organic search results of our services to favor its
own vertical search services.
• 2. Google manipulates paid search results by
lowering the quality score of our services.
• RESULT? It reduces our visibility on the web search,
users ultimately access only Google’s content.

35. GOOGLE - WHAT DOES THE
COMMISSION HAVE TO SAY?
• NO FORMAL DECISION YET BUT FROM PR WE CAN SEE
WHERE THE COMMISSION IS HEADED AT:
• RELEVANT MARKET:
• General search?
• Online search in general?
• Something else?
• What are the implications?

36. GOOGLE - WHAT DOES THE
COMMISSION HAVE TO SAY?
• MARKET POWER – CONFLICTING VIEWS:
• GOOGLE IS DOMINANT:
• Market shares in the advertising markets: 80-90%
• Market shares in general online search: 80-90% (In Italy
92%)
• Must we take other factors into account? Where does
Google get its power from? E.g. access to user data.
• GOOGLE IS NOT DOMINANT:
• It operates in a new economy market / COMPETITION IS
ONLY A CLICK AWAY!

37. THE GOOGLE CASE – MARKET AND
DEMOCRATIC IMPLICATIONS
• ABUSE – ISSUES TO CONSIDER when discussing
Google’s special responsibility.
• POSSIBLE MARKET IMPLICATIONS:
• Drives competitors out of the market, becomes a
monopolist and may increase prices as it pleases
• Think of online advertising and how important it has
become for companies, especially SMEs!

38. THE GOOGLE CASE – POSSIBLE
IMPLICATIONS FOR DEMOCRACY
• Search is the dominant usage on the Internet by far;
• Communicative abundance = Selection of content
more important now than ever before;
• 73% of European households are now connected to
the Internet and search engines constitute the main
entry gate;
• Consumers believe using search engines is reliable

39. THE GOOGLE CASE – POSSIBLE
IMPLICATIONS FOR DEMOCRACY
• Many Europeans get most of their news on national
and European political matters from the Internet
(29% and 26% respectively);
• Search engines and the content production
industry: Yahoo! News, YouTube’s acquisition by
Google, The Huffington Post’s acquisition by AOL
• What if newspapers or candidates are subject to
downgrading? Eipstein and Roberston (2013)

40. THE GOOGLE CASE – PROPOSED
COMMITMENTS
• Google offered for a period of 5 years to:
• - label promoted links to its own specialized search
services so that users can distinguish them from natural
web search results,
• - clearly separate these promoted links from other web
search results by clear graphical features (such as a
frame), and
• - display links to three rival specialized search services
close to its own services, in a place that is clearly visible
to users.
• NOT ACCEPTED BY THE EUROPEAN COMMISSION – CASE
HAS NOT CLOSED YET.

41. SUMMARY - ABUSE OF DOMINANCE IN
ONLINE SEARCH
• Relevant market: General v. Vertical search.
Important issue, fast-moving markets;
• Assessment of market power: High market shares –
other valuable inputs, e.g. user data, also matter;
• Assessment of abuse: Open to discussion. For EU
standards, Google has abused its dominant
position;
• Commitments or a fine? REMAINS TO BE SEEN.

42. STATE AIDS TO PUBLIC BROADCASTERS
• General prohibition on State aids – Art. 107(1) TFEU:
“any aid granted by a Member State or through State
resources in any form whatsoever which distorts or
threatens to distort competition by favoring certain
undertakings or the production of certain goods
shall, in so far as it affects trade between Member
States, be incompatible with the internal market”.

43. STATE AIDS TO PUBLIC BROADCASTERS
• BUT, the Treaty includes derogations from the general
prohibition – the one that’s used here is Art. 106(2) TFEU:
• Undertakings entrusted with the operation of services of
general economic interest or having the character of a
revenue-producing monopoly shall be subject to the
rules contained in the Treaties, in particular to the rules
on competition, in so far as the application of such rules
does not obstruct the performance, in law or in fact, of
the particular tasks assigned to them. The development
of trade must not be affected to such an extent as
would be contrary to the interests of the Union.
• BALANCING EXERCISE: Competition not to be affected –
Application of EU law must not obstruct the
accomplishment of their mission

44. STATE AIDS TO PUBLIC BROADCASTERS
– AMSTERDAM PROTOCOL
• THE HIGH CONTRACTING PARTIES, CONSIDERING that the
system of public broadcasting in the Member States is directly
related to the democratic, social and cultural needs of each
society and to the need to preserve media pluralism,
• HAVE AGREED UPON the following interpretive provisions:
• The provisions of the Treaties shall be without prejudice to the
competence of Member States to provide for the funding of
public service broadcasting and in so far as such funding is
granted to broadcasting organizations for the fulfillment of the
public service remit as conferred, defined and organized by
each Member State, and in so far as such funding does not
affect trading conditions and competition in the Union to an
extent which would be contrary to the common interest, while
the realization of the remit of that public service shall be taken
into account.

45. STATE AIDS TO PSB – CONFLICTING
INTERESTS
• PROPONENTS:
• Provision of impartial
information
• Cultural diversity
• Freedom of
expression
• Protection of media
pluralism
• OPPONENTS:
• Detrimental to
competitors (in
constant search of
ad revenues)
• No need for PSB: the
market caters to
every taste
• New services do not
accomplish public
mission

46. STATE AIDS TO PSB – THE
COMMISSION’S PRACTICE
• Role of the Commission in determining public
television policies very important: System of
notifications
• Broadcasting Communication: Soft-law instrument
laying down the conditions under which MS may
give money to public television.
• 2001: First BC
• 2009: Revised to regulate provision of new media services
by PSBs

47. THE BROADCASTING
COMMUNICATION – CONDITIONS
• The public service remit must be defined in a clear
and precise manner (definition);
• The undertaking in question must be explicitly
entrusted by the Member State with the provision of
that service and there must be an effective
monitoring mechanism in place to ensure that the
public service obligations are complied with
(entrustment and supervision) and
• State financing must not exceed the net costs of
the public service mission (proportionality).

48. THE BC – CLEAR AND PRECISE
DEFINITION
• MS free to define the remit (falls within their
competence): BUT, this is usually very broad (legacy
of the monopoly era) and leaves room for abuse.
• Commission entitled to check for MANIFEST ERRORS
(e.g. e-commerce, merchandising, etc.)

49. THE BC – CLEAR AND PRECISE
DEFINITION
• VERY BROAD REMIT: e.g. RAI Contratto di Servizio, Art.
1(1):
• The public service mission is to ensure to the universality
of users a wide range of programming and a balanced
and varied offer of transmissions, of all kinds, in order to
meet, with reference to national and European
context, the democratic, social and cultural needs of the
community, to ensure the quality of
information, pluralism, including cultural and linguistic
diversity, as understood in the framework of the broader
Italian national identity and still reiterating the value of
indisputable national cohesion (translation from Italian)

50. CLEAR AND PRECISE REMIT -
EXAMPLES
• BBC News 24: the service “would help to meet the
democratic and social needs of a society […] by
allowing the coverage of a wider range of events and a
more in-depth analysis of the events” – WITHIN
COMPETENCE LIMITS
• Dutch PSB and sports broadcasting: “broadcasting sports
programs, within a limit of around 10% of total
broadcasting time, does not constitute a manifest error.
Sports can be part of the public service mission of broad-
casters and a proportion of 10% of broadcasting time
dedicated to sports is not inconsistent with the remit of
offering a balanced and varied programming mix” –
EXCEEDING COMPETENCE LIMITS

51. EFFECTIVE SUPERVISION - EXAMPLES
• Effective control exercised by an external body independent
from the management of the PSB.
• Ad hoc payments to RAI and to RTP: public service
performance was based on annual reports produced by the
internal board of auditors.
• Tide turned with Irish RTE / TNAG case: “[t]he RTÉ Authority's
reporting obligations and the preceding responsibility of
ensuring that RTÉ complies with its legal obligations would
not, in the Commission's view, be sufficient to ensure effective
supervision, since the RTÉ Authority is not a control body
independent from the RTÉ but rather an integral part of it”.
• Subsequently, authorities established Broadcasting Authority of
Ireland.

52. PROPORTIONALITY PRINCIPLE
• Commission checks whether the amount of public
compensation exceeds the net costs of the public
service mission.
• How?
• Separate accounts between public and non-public
service (transparency directive) – New RAI Servizio di
Contratto (2013-2015)
• External body checking whether overcompensation has
taken place, e.g. in Austria, to guarantee that the public
broadcaster does not sell advertising below the market
value or purchase premium sports rights above the
market price

53. PSB AND NEW MEDIA SERVICES
• Very contentious issue
• But, Commission decided it is allowed upon certain
conditions forming what is known as the Amsterdam
test:
• Public Value Assessment: Up to the MS according to the
society’s needs
• Market Impact Assessment: the existence of similar or
substitutable offers, editorial competition, market
structure, market position of the public service
broadcaster, level of competition and potential impact on
private initiatives.
• Open consultation with interested stakeholders, e.g.
citizens, competitors, etc.

54. STATE AIDS TO PSB - SUMMARY
• Competition is fierce but MS continue to fund PSB
• Commission’s BC attempts to ensure transparency
and legal certainty for competitors – 3 criteria:
• Clear and precise definition: Difficult to strike a
balance, sometimes Commission exceeded competence
limits
• Effective supervision: External, independent body to check
compliance with public service obligations
• Proportionality: No overcompensation, separate accounts
and body to check how money is spent.
• Amsterdam test: PVA, MIA and public consultation.

55. K O N S T A N T I N A . B A N I A @ E U I . E U
MANY THANKS FOR
YOUR ATTENTION!