CMPF Policy Report Presentation

Policy Report

European Union Competencies in

Respect of Media Pluralism & Media

Freedom

Summer School for Journalists and Media Practitioners 2013

Freedom and Pluralism of traditional and new

media

Policy Report European Union competencies in respect of media pluralism and media freedom

The report presents the phenomena of media freedom and pluralism, and in

particular:

The importance of media freedom and pluralism for the democratic

regime

Perspective on the measuring and evaluating of media pluralism.

Analyses major aspects of media economics and ownership of media

players

Examines the development of the debate on legal instruments and

jurisprudence

Aims to suggest how the legislation in force could be used

Social and Political Aspects of Media

Pluralism and Media Freedom

Alina Dobreva

From Aristotle…

Communication and Democracy

…to McLuhan

Normative expectations of media

How to do it?

Facilitates the flow of information about public events to citizens

Exposes politicians and governments to public scrutiny

Leads to better social orientation and therefore, informed political choice

Urges people to participate in the political process

Leads to exposure to and exchange of different views (increased political knowledge, understanding, and tolerance)

Legitimate democracy

Definition of media freedom & pluralism

Independence from government,

authorities’ control & intervention;

no governmental monopoly on

information

framed within the media-

government relations

Media pluralism

Media freedom

Independence from disproportionate

private control and influence of

1/few economic, social and/or

political power(s)

based upon the tolerance and

inclusiveness in politics and society

preconditions

Normative functions of media freedom &pluralism

Opportunity

(1) to provide a platform for self-expression …

(2) to provide citizens with access to information (not to ‘truth’)…

(3) to foster agonistic public debate and deliberation …

(Czepek; McConnell & Becker)

Outcome for all groups

… reflecting the plurality of voices

without misrepresentation

… by various, easily accessible

sources, presenting wide variety of

viewpoints

… between all groups in a society

Media freedom Media pluralism

Media freedom “Owner” of the freedom: ordinary citizens, journalists or editors/media

owners?

Current de-professionalisation of journalists – tbd

Freedom at the level of media source or freedom at the level of the individual

journalist – depending on the particular media system and its emphasis on

internal/external pluralism

Emphasis on violations versus proactive overall view

Minimal definitions of democracy

Focus on the presence or absence of

certain indicative problems, e.g., the

killing of journalists

Social, political context &facilitating

legislation

Focus on overall performance, higher

standards of democratic functioning

Media pluralism Variety, diversity and the plurality of media supply, free, independent and

autonomous media:

Ownership, media outlets, sources of information and range of contents, guaranteed by market rules and regulations

Political and economic independence

Public sphere, general public and/or audience

Actual consumption cannot be regulated, but easy access to pluralistic information should be guaranteed

Led by factors beyond commercial viability and profitability

Results in access and choice of opinions & representations, which reflect the citizens of the state in question; The result however, depends on social and political factors beyond media as well

Measuring Media Pluralism across

Social & Political Contexts

Andrea Calderaro

Measuring Media Pluralism

• International Institutions (CoE, 2008 & UNESCO 2007)

• Non Governmental Organizations (Ofcom 2012)

• Academic Research (Valcke et al. 2009)

There is no agreement about how to measure

Media Pluralism

Challenges

• Identifying the indicators: media-ownership concentration, media market competition,

content diversity, freedom of journalists

• Framing a comparative research design

• Selection a research strategies: Quantitative/Qualitative methodologies

Comparing

- to explore the unequal behaviour of our observed

phenomenon

- to identify national peculiarities

- as a component of a larger transnational system

Standardizing

Benefits

• Focusing on the same national indicators

• Standardize research tools

• Collection of neutral empirical data

• Which can easily understood in different contexts

Vs Contextualizing Quantitative Vs Qualitative

Independent Study on Indicators for Media

Pluralism in the Member States – Toward a Risk-

Based Report Valcke, KU Leuven - 2009

3 level of analysis

• Legal Indicators

• Socio-Demographic Indicators

• Economic Indicators

Quantitative Approach

Criticism

• The lens that we use to observe and collect data in one context, does not imply that is is equal valid in an other contexts

(Adcock & Collier, 2001)

• By pursuing a neutral data, we risk to lose information which is essential to understand the national context

(Peschar 1984)

Qualitative methodologies

• Ethnographic approaches

• Interviews

• Observatory participation

Produce explanation,

instead of dry pictures of facts

Standardizing Vs Contextualizing Quantitatve Vs Qualitative

Concluding

Benefits

More powerful tool to develop a

deep knowledge of local

contexts, in order to understand

local Media Pluralism

Limits

It makes a transnational

comparison more difficult

Benefits

It generates neutral and easily

comparable data

Limits

It risks to loose information on

national peculiarities, which

might be the goal of the research

Standardization/Quantitative Contextualizing/Qualitative

Economic aspects of media

pluralism and media freedom in the

European Union

Giovanni Gangemi

With few contestants, prices can grow up, thus narrowing the

access of new entrants (e.g. the TV sports rights)

Dominant firms can keep the prices low (predatory prices),

making the market not profitable for potential entrants,

especially because of the high initial costs

For press media marginal costs are low, as additional cost is

related to just a part of the product (paper, distribution…)

For broadcasting media the marginal cost is zero, as any new

viewer/listener does not have any additional cost.

On the internet, though, more viewers/listeners mean more

bandwidth, and more costs

Entry

barriers

High initial

costs

Low marginal

costs

Economies

of scale

Media markets tend to concentration

Media markets tend to concentration Due to high initial costs and to economies of scale, big

media firms tend to expand vertically.

In the media markets, vertical integration is a strategic

issue as a firm could control both content production

and content delivery levels.

Low marginal costs and consequent economies of scale

make more profitable for a media firm to expand

horizontally.

Fragmentation increases this tendency, because the same

product will be available on a cross-media base in order to

match the audience, as the latter is more and more spread

on different means of communication. (Doyle, 2002)

Vertical

integration

Horizontal

integration

New context and the technological change On the one hand it lowers entry barriers, reducing dominance, with

positive effects on market plurality

On the other hand it contributes to fragment the audience,

dispersing consumers and thus making the market less attractive

for new entrants.

Aggregated consumers have stronger bargaining power, because

they constitute an attractive group and so stimulate tighter

competition (in particular when customer are well informed)

If consumers are homogeneous and aggregated they attract

possible new entrants (and this reduces the incumbent market

power)

If consumers are dispersed, fixed costs make entrance into the

market unattractive (the entrant will probably deal only with a

small proportion of consumers)

Audience fragmentation in media markets could discourage the

access of new entrants

Lowering of

barriers to entry

Long tail

effect

Audience

fragmentation

Products

customization

Media concentration and ownership debate

While the number of channels increased dramatically, the ownership of those

channels has narrowed to an even smaller few (Lessig, 2004),

it is easier to speak, but harder to be heard (Einstein, 2004),

five global dimension firms won most of the newspapers, magazines, book

publishers, motion picture studios and radio and television station in the United

States (Bagdikian, 2004),

more does not necessarily mean different (Murdock, 1982),

while there is indubitably greater “numercial diversity”, we are seeing a greater

concentration at the level of “source diversity” (Winseck, 2008).

Media ownership is increasingly concentrated (Castells, Arsenault 2008)

There are fewer and larger companies controlling more and more (McChesney)

the media sky has never been brighter (Thierer 2005),

more competition than ever (Compaine, 2000)

Pessimists

Optimists

Is concentration increasing or decreasing in the online media environment?

Dynamic of media concentration

Noam

u-shape effect

If barriers to entry increase and economies of scale decline, in

a first moment there is more concentration with less contestants, but

then, due to scale economies, there will be more players.

If barriers to entry drop, but economies of scale increase, then

in a first moment there will be more contestant, attracted by low

barriers to entry, but then competition will increase and contestants

will decrease

The lowering of distribution costs lead firms to allocate more

resources on the first copy of the product, to keep the same profit.

The increase of the costs of the first copy creates higher barriers to

entry and thus could lead to a reduction of diversity

Baker

Old and new concerns on media pluralism As internet develops, traditional media move to the online, and online media

conglomerates boost their profits, notwithstanding the crisis. Though, all this is rising

a new patterns of concerns about pluralism and diversity:

There is an unclear definition of relevant markets: what should be measured and

how?

It is difficult to assess competition between offline and online media (level

playing field).

Successful online information and content providers are not new but are mainly

traditional media outlets moving online (BBC, CNN, FOX…)

New content providers are smaller and find hard to compete with traditional

players.

Successful players are mainly intermediaries and aggregators, with low/no

investments in new contents.

Tendency to concentration in the online media markets

An further question is the increasing tendency to market concentration in new media

(search engines, social networks…): the winner takes all.

Some examples of concentration in the online media markets are

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2007 2008 2009 2010 2011

Facebook

MySpace

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

2004 2005 2006 2007 2008 2009 2010 2011

Yahoo!

Google

Google and Yahoo! revenues 2004-2012 Facebook and MySpace 2007-2012

Source: eMarketer and data provided by operators. Source: Netmarketshare.

Note: figures include only revenues coming from audiovisual

Geographical market A final concern is about the geographical origin of new players and the role of EU

industry.

The balance of trade between US and Europe has mainly taken one direction,

due to internal market size, linguistic and cultural factors, general economic wealth

New operators emerging from the internet economy are almost exclusively

coming from the US.

Europe struggles to establish new players able to compete worldwide.

The challenge is between local-based and well-established media firms and

international globalised organisations, mainly based in the US, operating as

content aggregators.

Traditional instruments such as quotas or public funding to protect local

industries risk to be ineffective in the online media environment

The gap between US and EU audiovisual industry increases EU industry has been deeply affected by the economic crisis, while US firms keep on

growing in the globalised economy. EU audiovisual firms revenues are flat, while US and

Japan companies increased their turnovers. This happens despite public funding (license

fee, grants, etc.).

0

50.000

100.000

150.000

200.000

250.000

2006 2007 2008 2009 2010

US

EU

JP

BR

MX

+4.8%

+0.5%

+7.8% Source: European Audiovisual Observatory,

Yearbook 2011.

Note: figures include only revenues coming from

audiovisual activities. They include results from the

50 leading audiovisual worldwide companies

Total revenues of the audiovisual industry 2006-2010

Mil

lio

n €

CAGR

CAGR

CAGR

Conclusion

A greater diversity on the supply side could not correspond to a greater

diversity on the demand side, and could not lead automatically to more

pluralism.

There is a need for a clearer definition of relevant markets to better

address both pluralism and market competition on media.

An excessive fragmentation in the EU media markets and the lack of a

unified market risk to make European media outlets too vulnerable in the

globalised economy.

It must be understood whether current tools to protect European

industry are still effective or not.

Media Pluralism and Freedom: Legal

Instruments for EU Intervention

Elda Brogi & Paula Gori

June 2012. As Vice-President N.Kroes affirmed: “Currently the

EU does not have the legal competence to act in this area [media

pluralism] as part of its normal business. In practice, our role [of the

EC] involves naming and shaming countries ad hoc, as issues arise.”

A legal overview

- the Treaties do not confer an explicit competence to the EU on “media pluralism and

media freedom”

- but the EU has not been “neutral” on the issue of media pluralism and media

freedom

- -subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if

and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member

States…

- the debate on EU competencies with regard to media pluralism and media freedom is

a long debate which is still on-going

- Media Monitor

- CMPF, HLG and Media Future Forum

in broadcasting regulation

1974. Sacchi Case: “…a television signal must, by its nature, be regarded as provision of services”

1989. Television Without Frontiers Directive (TWFD): First harmonisation instrument for

the free movement of TV services. It establishes the country of origin principle and refers

only to traditional linear broadcasting services.

It sets some minimum standards like the protection of minors and public order, consumer

protection, the promotion of European works, the right of reply.

The debate on the TVWF Directive

1999. Communication on the Future of European Regulatory Audiovisual Policy:

“…regulatory policy in the sector is aimed at safeguarding certain public interests, such as cultural and

linguistic diversity, the protection of minors and consumer protection…”

2005. Liverpool Conference : media pluralism still is responsibility of MS

The AVMS Directive

Technological developments - Same legal basis as for the TWFD, namely the free movement of services

- Linear services: Programmes provided by a media service provider at a scheduled time and watched

simultaneously by viewers

- Non-linear services: Programmes users select from a catalogue offered by the media service provider,

to watch at their own convenience.

However: the Directive does not define a general set of rules for the convergent services and excludes

the non broadcasting-like services that do not fall in the definition of industrially run mass media (Recital

22)

All media services have to respect a basic tier of obligations in some specific areas: identification of

media services providers, prohibition of incitement to hatred; accessibility for people with disabilities;

qualitative requirements for commercial communications; sponsoring and product placement.

However: two – tier system: stricter regulation for linear services

Recital 5 “Audiovisual media services are as much cultural services as they are economic

services. Their growing importance for societies, democracy — in particular by ensuring

freedom of information, diversity of opinion and media pluralism — education and

culture justifies the application of specific rules to these services”

Recital 10: “…Bearing in mind the importance of a level playing-field and a true

European market for audiovisual media services, the basic principles of the internal market, such as free competition and equal treatment, should be respected in order to ensure

transparency and predictability in markets for audiovisual media services and to achieve low

barriers to entry.”

Recital 12: “…that regulatory policy in that sector has to safeguard certain public interests,

such as cultural diversity, the right to information, media pluralism, the protection of

minors and consumer protection, and to enhance public awareness and media literacy, now

and in the future.”

Public service broadcasting/media

Instrument to safeguard media pluralism and freedom – 2000

Communication of the EC on Services of General Interest in Europe

“…the broadcasting sector has, since its inception, been subject to specific regulation in

the general interest. This regulation is based on common values such as freedom of

expression and the right to reply, pluralism, protection of copyright, promotion of

cultural and linguistic diversity, protection of minors and of human dignity, consumer

protection…”

PSB is seen as an instrument to ensure the coverage of a number of areas and the

satisfaction of needs that private operators would not necessarily fulfill to the optimal

extent. (COM 2001/C 320/04)

…

As a service of general interest it is covered by Article 106(2) TFEU as

interpreted according to the Amsterdam Protocol on Public Service

Broadcasting (1997): “… the provisions of the Treaty establishing the European

Community shall be without prejudice to the competence of Member States to provide

for the funding of public service broadcasters insofar as such funding is granted to

broadcasting organisations for the fulfilment of the public service remit as conferred,

defined and organised by MS, and insofar such funding does not affect trading

conditions and competition in the Community to an extent which would be contrary to

the common interest, while the realisation of that public service shall be taken into

account”.

two principal EC Communications (2001/C320/04 and 2009/C 257/01):

set of guidelines and rules followed by the EC when it comes to decide

state-aid cases in the PSBs domain.

Fundamental rights. Article 11 of the Charter

• (1) Everyone has the right to freedom of expression. This right shall

include freedom to hold opinions and to receive and impart information

and ideas without interference by public authority and regardless of

frontiers.

• (2) The freedom and pluralism of the media shall be respected.

Other legislation

Electronic commerce

Electronic communications

Information society services

What we say in the report

- media pluralism is a principle that can operate and be

implemented at various levels in the EU order

- a list of potential instruments

Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of the EU order (1)

- Article 11, Paragraph 2 Charter explicitly states that: “The freedom and pluralism

of the media shall be respected”.

- art. 6 TEU says the Charter has same legal value as the Treaties

- the provisions of the Charter are not to extend the competences of the

Union as defined in the Treaties

- the Charter is addressed both to the EU institutions, bodies, offices,

agencies, with due regard to the subsidiarity principle, and to the Member

States when they are implementing EU law (art. 51)

Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of THE EU order (2)

Article 52 (3) of the Charter affirms that:

“In so far as this Charter contains rights which correspond to

rights guaranteed by the Convention for the Protection of

Human Rights and Fundamental Freedoms, the meaning and

scope of those rights shall be the same as those laid down by the

said Convention. This provision shall not prevent Union law

providing more extensive protection.”

Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of the EU order (3)

- Another bill of rights acknowledged by Article 6 TEU is the

Convention for the Protection of Human Rights: “The Union shall

accede to the European Convention for the Protection of Human Rights and

Fundamental Freedoms.”

- Fundamental rights, as guaranteed by the ECHR and as they

result from the constitutional traditions common to the Member

States, are to constitute general principles of the law of the

European Union

Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of THE EU order (4)

- Charter, ECHR and constitutional traditions of MS form a normative

corpus that has already had, and will potentially have, a role in the

interpretation and application of European law.

- The two European Courts, the European Court of Justice of the

European Union and the European Court for Human Rights, for

instance, can play an important role in the definition and in the

application of common European principles starting at “case level”.

Competition and cultural aspects: Article 167.4 TFEU

- article 167.4 TFEU pluralism-specific considerations in competition

analysis.

The Commission must take cultural aspects into account in the framework

of the Union’s competition policy. Articles 11(2) and 51(1) of the Charter of

Fundamental Rights establish the Commission’s responsibility to respect and

promote pluralism. On the basis of these provisions, European competition

law needs to be applied in the spirit of the overall objectives pursued by the

Treaties.

Pluralism and internal market harmonization

Article 26 TFEU – internal market

Article 114 TFEU – internal market harmonization

- The European Parliament and the Council shall ... adopt the measures

for the approximation of the provisions laid down by law, regulation or

administrative action in Member States which have as their object the

establishment and functioning of the internal market

- The European Union can exercise its competences whenever the

proper functioning of the internal market is negatively influenced by the

existence and application of diverging national provisions in any sector

which is not expressly excluded from the founding Treaties

ownership; ownership transparency; libel; copyright... national legislation

-All these differences can hamper the functioning of the internal market: their

existence may be detrimental to the free movement of services or the right of

establishment, since operators may find it difficult to establish or to provide services

in another Member State, for instance, where dominant positions are in place (see

European Citizen initiative)

Pluralism and internal market harmonization

The implementation of AVMS and the role of NRAs (1)

- AVMSD does not foresee the establishment of relevant

independent National Regulatory Authorities (NRAs)

- comparison with the Electronic Communications

Regulatory Framework, which regulates issues which are

closely related to those in the AVMS Directive: all relevant

national regulatory authorities are requested to comply

with independence requirements.

The implementation of the AVMS Directive & the role of NRAs

- The AVMS Directive does not introduce any specific obligation

for the Member States nor does it provide any element about the

structure, functioning or role of those national bodies or about the

relationship among them.

- in an era of convergence, it could be reasonable to consider the

establishment of the same institutional requirements both for

electronic communications and AVMS (common standards on

definition and treatment of similar cases; definition of new media

markets).

New principles in the Treaties

“It is forbidden to create or maintain a dominant position in

media markets”

“Governments and economic forces cannot exercise any

undue influence on media undertakings”.

This general precept would be gradually defined by the case law of the CJEU, that would

indicate which behaviours could be considered acceptable and which not.

The European Agency on Human Rights (or another qualified body) soft law standard-setting & monitoring

- another potential European level of intervention on pluralism could be

through the Fundamental Rights Agency (FRA)

- another qualified body, which should be mandated to monitor Member

States and propose common standards, basing its work on the ample case

law of the the European Court of Human Rights and the European

Convention.

Conclusions - EU competences with regard to media pluralism appear scattered in the

European legal landscape.

- the European Union has few hard and soft law instruments to promote and

assure media pluralism and freedom in Europe

- the implementation of common principles is feasible at legislative, judiciary,

administrative level

- given the paramount importance of the democratic principles to be

promoted, greater clarity and certainty is needed with regard to EU

competences

Thanks !