New rules to target media monopolies

Date: 18/07/1996

By Fiona McHugh

ITALIAN media magnate Silvio Berlusconi may be barred from expanding his television empire if draft new EU rules on media pluralism become law.

Under a proposed directive due to be adopted by the European Commission next week, firms owning channels which capture more than 30&percent; of a country's television or radio audience would be prevented by EU national authorities from growing any bigger. Owners of more than one media - a radio and a television station for example - would be allowed a total audience share of 10&percent;.

Newspapers would not be affected by the 30&percent; threshold, but would be covered by the multi-media provisions.

With an estimated audience share of over 40&percent;, Berlusconi is the man most likely to fall victim to the proposed threshold - but other television tycoons would also be affected.

Although national authorities could not, under the draft rules, order media moguls considered too powerful to shed part of their business, they could refuse to renew the licences of companies exceeding the legal limit.

A rash of media mergers across Europe in recent times has given rise to widespread concern that too much power and influence is being concentrated in too few hands.

The potential threat to democracy of excessive media concentration was highlighted in Italy when Berlusconi, controller of a majority of the country's media interests, decided to run for prime minister. With the biggest TV network on his side, many feared he had an unfair advantage over his political rivals.

What is unusual about the draft directive, which has not yet been finalised, is that it seeks to regulate media concentration on the basis of audience share instead of ownership. National laws, on the whole, limit the number of media operations a firm or an individual can own but not the audiences they reach.

“Setting limits on the control of media based on audience shares offers a more effective protection of pluralism than does setting limits based on the number of media services or the amount of capital invested,” says the document.

In a move bound to cause bitterness among commercial broadcasters, public television stations are excluded from the scope of the proposed directive.

“This is totally unfair. As far as we are concerned, influence is influence and state-owned stations are just as capable of exercising it as we are,” said one private television representative, pointing out that an independent study in the UK found that 29&percent; of those who watched the BBC news thought it was biased, while only 4&percent; believed Sky News favoured one political party.

The need to protect the public's interest while at the same time ensuring the growth of TV powerhouses capable of competing with US giants has put the Commission under enormous strain of late.

Competition Commissioner Karen Van Miert has shown himself to be uncompromising in his approach to the sector, pulling the plug on one-quarter of all media mergers notified to the EU's competition authority.

The text which is about to emerge from interservice consultation seeks to strike a balance between the conflicting interests of citizens and industry.

The Commission tried to introduce EU-wide media concentration rules some years ago, but was forced to withdraw them in the face of stiff opposition.

The latest version of the text, despite the relatively high thresholds, will no doubt have as turbulent a passage through the institutions as its predecessors. Germany and the UK remain radically opposed to the introduction of common measures which, they say, breach the principle of subsidiarity.

However, Internal Market Commissioner Mario Monti, whose services drafted the directive, believes the rules are needed to encourage cross-border investment in Europe's growing media market.