Case C-234/12, Sky Italia – demanding the same advertising time as free-to-air commercial broadcasters [judgment 2013, ECLI:EU:C:2013:496]
If you watch commercial free-to-air TV in Italy, then you will see adverts. However, if you watch pay-TV in Italy, then you see fewer of them because Pay-TV companies are permitted less advertising time per hour of broadcasting. Pay-TV company Sky claims this difference contravenes EU Treaty law.
Facts
Italian law stipulates that free-to-air commercial TV broadcasters can devote a percentage of their broadcasting time to the showing of adverts. The same Italian legislation sets a lower percentage of time for Pay-TV companies, like Sky, whose signals are encrypted.
The Italian regulatory authority known as AgCom (Autorità per le Garanzie nelle Comunicazioni) decided that Sky Italia was showing its audiences too much advertising, and was breaking Italian law.
Sky Italia objected to AgCom’s decision and it appealed to the administrative judge at the TAR Lazio. Sky claimed that there was no basis in Italian or EU law for justifying the difference in legal treatment which in effect reduced how much advertising it could broadcast each hour.
The referring judge noted that national rules on advertising had not been completely harmonised by EU legislation. But EU law did not make a distinction between commercial broadcasters whose signals were free-to-air, and Pay-TV signals. Protecting Pay-TV viewers in this way could also not be squared with the goal of EU sectoral rules since the real effect of the national rules was primarily intended to increase the advertising revenues generated for free-to-air commercial broadcasters. And the discriminatory national rules of the legislature appeared to go against principles of equality, and fundamental freedoms such as freedom of expression, and receiving information. It could not be said that these legislative rules were ‘necessary’ in the general interest of society. Besides restricting the fundamental freedoms enshrined in EU law, they distorted competition.
It was not contested that the rules of the Italian government: constrained Sky’s freedom to sell advertising time to advertisers located in other Member States; restricted Sky’s right of establishment since they made it more difficult for Sky to stay in the Italian market; and would deter foreign investors from investing in Sky’s activities in Italy, and more generally in Pay-TV in Italy.
Questions Referred
According to the Curia website, the TAR Lazio has asked:
1. Must Article 4 of Directive 2010/13/EU, the general principle of equality and the rules of the Treaty on the Functioning of the European Union relating to the free movement of services, the right of establishment and the free movement of capital be interpreted as precluding the rules in Article 38(5) of Legislative Decree No 177/2005 which lay down shorter hourly advertising limits for pay-TV broadcasters than for free-to-air broadcasters?
2. Does Article 11 of the Charter of Fundamental Rights of the European Union, interpreted in the light of Article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms and the case-law of the European Court of Human Rights, and does the principle of pluralism in the media, in particular, preclude the rules in Article 38(5) of Legislative Decree No 177/2005 which lay down shorter hourly advertising limits for pay-TV broadcasters than for free-to-air broadcasters, distorting competition and creating – or rather strengthening – dominant positions in the television advertising market?
Update
This case is scheduled to be heard by the Second Chamber on 10 April 2013.
Outcome. By judgment of 18 July 2013 (ECLI:EU:C:2013:496) the Court ruled, in the words of the operative part: “Article 4(1) of Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive), as well as the principle of equal treatment and Article 56 TFEU must be interpreted as not precluding, in principle, a national rule, such as that at …” The full text is available on EUR-Lex and CURIA.
Comment
On its face, this reference looks like another litigious skirmish in the broader conflict between Mr Murdoch’s News Corp, and the Mediaset group. In this respect, it is notable that AgCom is but one of the defendants named in this reference, another is the Reti Televisive Italiane. This is a network of Italian television channels controlled by Mediaset, which in turn is controlled by one of Mr Berlusconi’s companies.
However, media pluralism in Italy is a matter of serious concern. Discontent about the situation in Italy has been expressed from the Council of Europe. Resolution 1387 of the Parliamentary Assembly (2004) ‘on monopolisation of the electronic media and possible abuse of power in Italy’ opened boldly: ’1. Italy is a founding member of the Council of Europe and strongly supports the ideals for which it stands. The Parliamentary Assembly is therefore concerned by the concentration of political, commercial and media power in the hands of one person, Prime Minister Silvio Berlusconi.’
It was a Resolution recently repeated at length by the Strasbourg Court when in 2012 it was reasoning towards a finding that the Italian State had violated not only Article 10 of the ECHR but also Article 1 of Protocol No. 1. This ruling of the Grand Chamber came in application no. 38433/09, Centro Europa 7, where the claimant company had been granted a licence for nationwide terrestrial television broadcasting back in 1999. Ten years later, Centro Europa 7 was still unable to broadcast in Italy because it had not been allocated any frequencies. Apparently, this was because one of the channels in the Reti Televisive had not relinquished its space in the radio spectrum.
The extensive ruling of the Strasbourg Court shows the ability of the Italian State to stifle a terrestrial broadcaster operating in Italy.
And in some ways it provides a nice backdrop against which to imagine a broader political and economic context that may have been at work in the formulation of the ‘advertising time’ laws that applied to Pay-TV companies like Sky.
It is perhaps a little ironic that the company pushing for media pluralism in this reference from the TAR Lazio is Sky. This is because the Grand Chamber of the CJEU has also just placed a great reliance on the freedom to receive information (as protected in Article 11(1) of the EU Charter), and the desire to promote media pluralism (as enshrined in Article 11(2) of the EU Charter) and it did so when resisting Sky’s attempt to invalidate a provision in the Audiovisual Media Services Directive (Case C-283/11, Sky Österreich).