Competition Commission Opens Investigation to Open the Books at ARD/ZDF
Michael Hedges February 24, 2005
Representatives of four German States paddled to Brussels last week hoping to head off a formal investigation. It failed. Commissioner Kroes says the “open the books.”
According to an article in Der Spiegel (February 19), representatives from Bavaria, Rheinland-Pfalz, Nordrhein- Westphalia and Saxonia-Anhalt met EU Competition Commissioner Neelie Kroes in Brussels. At issue is a two-year old complaint by VRPT that German public television unfairly competes with private broadcasters by using license fee funds to support on-line development. Commissioner Kroes has taken up the complaint because ARD and ZDF keep financial information to themselves. This “lack of transparency” always raises eye-brows in Brussels.
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Governments must look for efficiency in their public media policies, says a Dutch think tank. Entertainment is out.
Europe’s public service broadcasters, nearly healed after the last anxiety attack, return to the analysts couch.
An anniversary like no other passes this week, January 28th. Don’t expect celebrations. In the year since Lord Hutton tarred the BBC, the public broadcasting icon, every critic has piled on.
Time was when the BBC deftly avoided punches thrown by critics and competitors. A series of OFCOM reports and statements suggests the real contest is only beginning.
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The European Commission generally accepts that national public broadcasters are free to determine how they are funded. Commissioner Kroes has stated that broadcast license fees that fund public broadcasting are legal. The Commission also mandates financial transparency of all publicly funded institutions. What the Commission wants is a clear separation between public and commercial activities.
This makes the public broadcasters a little crazy. Commercial activities, from ad sales to on-line services to film production, are considered essential if public broadcasters are to maintain high quality free-to-air programming and to remain competitive among all media platforms. Public broadcasters, in Germany and elsewhere, have made considerable investment in digital platforms, often years ahead of private companies.
Commercial broadcasters see it differently. They want public broadcasters out of commercial ventures, particularly those sure to make money. Their argument is that funding from broadcast license fees distorts competition, giving public broadcasters an unfair advantage. Public broadcasters also benefit from certain tax breaks not available to commercial enterprises.
So Commissioner Kroes has written to the German public broadcasters – as well as Irish and Dutch – telling them the formal investigation has begun.
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