Why the Words “But” and “However” Determine the EMFA’s Legal Basis

The European Commission bases its proposal for a European Media Freedom Act (EMFA) solely on the legal basis of Art. 114 TFEU. This corresponds to the “general objective” of the proposal to improve the functioning of the “internal media market”. In principle, the EU is not precluded from invoking this so-called internal market clause even when regulating the media sector, characterised by its twofold nature with an economic and cultural dimension. However, it becomes problematic when the actual focus of a legislative proposal is not mainly an economic but a cultural one, namely safeguarding media pluralism and freedom. Enacting a regulation, which is directly applicable throughout the EU, with such a focus would undoubtedly entail a far-reaching interference with the cultural sovereignty of the Member States, documented inter alia in Art. 167(4) TFEU and the Amsterdam Protocol concerning public service broadcasting. This requires a careful concretisation of existing obstacles to the internal market, their actual overcoming by the proposed rules and a consideration of cultural interests and traditions of the Member States. In its current shape, the EMFA, irrespective of its noble goal, does not meet these requirements. Therefore, most of the EMFA’s substantive rules do not solidly rest on a legal basis, making the proposal partly incompatible with Union law.

Setting the Scene: In principle …

The competence structures within the Union, based on the principle of conferral, are complex and get even more complex when it comes to dealing with issues of media pluralism. In terms of regulating the internal market, the EU has far-reaching competences at its disposal, which also serve to guarantee fundamental freedoms in light of economic considerations. Accordingly, the EU is empowered under Article 114 TFEU – a provision that is regularly interpreted quite broadly – to adopt measures aimed at the establishment and (better) functioning of the internal market. Since (and to the extent that) media service providers offer (cross-border) services consumed by EU citizens in this internal market, this provision also extends to the “internal media market”. Pursuing also other objectives with such a market-oriented regulation does not pose a hindrance, as long as the internal market objective is the main focus. This is particularly relevant when regulating media: The regulation of economic aspects often entails cultural aspects and vice versa and they often cannot be separated from each other.

Consequently, and after a first draft of the EMFA was rejected inter alia due to not meeting requirements of Art. 114 by the Commission’s advisor – the Regulatory Scrutiny Board –, the Commission assured itself of the possibility of invoking Art. 114 TFEU. “In principle” this is also to be agreed with: the EU can enact rules for the internal market and, therefore, also for the internal media market. However, it is the “how” that matters. This requires a review of the conditions and limitations of Art. 114 TFEU in relation to each of the very diverse provisions of the EMFA with its multi-faceted nature.

… however, there is an actual focus on safeguarding media pluralism and freedom…

The “general objective” of the EMFA to improve the functioning of the internal media market is developed in the explanatory memorandum but surprisingly not in Art. 1 of the proposed regulation, as one would usually expect and can be observed, for example, in the DSA or DMA. This is less surprising if one takes a look at the considerably more detailed “specific objectives” further described in the explanatory memorandum, which contain keywords such as safeguarding media pluralism, independence, editorial freedom and the protection of journalists. Especially when it comes to safeguarding diversity, these are not closely related to economic considerations, but rather cultural ones. Thus, special attention must be paid to Art. 167 of the TFEU – the “culture clause” of the Treaties. Without being able to go into detail on the complexities of this provision, in brief, Art. 167(4) underlines that the Treaties aim at leaving a large degree of cultural sovereignty to the Member States which prevents the EU from harmonising and limits it to supplementing national law in a supportive manner. A similarly clear declaration can be derived from the Amsterdam Protocol specifically for the area of public service media (PSM) with which the Member States declared that Treaties and namely the competition rules are without prejudice to the Member States’ competences for the remit and funding of PSM, which in some Member States is closely linked to constitutional traditions and identity.

To overcome tensions between Art. 114 and Art. 167 TFEU, the Commission, interestingly, links the different objectives in its proposal: the protection of media freedom and pluralism is perceived as “an essential feature of a well-functioning internal market for media services” (Recital 2), i.e., elements that are actually of a cultural dimension are made a prerequisite for the appropriate provision of services in their economic dimension. From a fundamental rights perspective, this line of argument could not be more agreed with, because, as the ECtHR repeatedly emphasises, the media can only fulfil their essential function for democracy as a public watchdog if pluralism and freedom are guaranteed. From the perspective of the allocation of powers between EU and Member States, however, it has the risk of undermining the principle of conferral of competences if and because it could expand the internal market competence almost limitless. For example, it could equally be argued that sufficient retirement and health care provisions for journalists or the funding of local media are also prerequisites for the “well-functioning” of the (pluralist) internal media market, as otherwise quality content for EU citizens could no longer be ensured in the future. It is a different matter whether independence and pluralism are essential for the freedom of the media (as the EMFA states) or for the freedom to provide services in the single market (which is the necessary reference for application of Article 114 TFEU). Although these are values that the EU is founded on (Art. 2 TEU), they do not constitute a competence title in themselves.

… yet, Art. 114 TFEU requires actual hindrances for the internal market

Even if one acknowledges the internal market objective as the focus of the EMFA, Art. 114 TFEU requires the existence of actual obstacles to the internal market which the regulation intends to overcome. As the EU does not have the competence to create equal domestic conditions in all Member States per se, the barriers to trade or relevant distortions to competition need to be clearly demonstrated.

It is by no means to be denied that there are serious problems even in the democratically constituted Member States, the Union indeed being threatened by worrying developments concerning the state of media concentration, editorial independence or journalistic freedoms. This has been demonstrated by the Media Pluralism Monitor, the RSF World Press Freedom Index and the recently published study on media plurality and diversity online. In its Impact Assessment, the Commission thoroughly examines these problems in order to justify the need for a Union-wide regulatory framework. What is already striking here, is that mainly examples from Poland and Hungary are cited for worrying regulatory developments, while others are never or hardly mentioned. In other words, it is recognised that in many aspects it is not so much an overall problem of the internal market rather than individual problems in specific Member States in several (albeit all media-related) regulatory areas. Yet, with regard to other regulatory developments in some Member States, the very existence of (any) regulation, without considering positive objectives or effects thereof, is seen as an obstacle because it results in a fragmentation. It is somewhat surprising, for example, that the Impact Assessment cites the new German rules on the findability of public-value content on user interfaces as a (negative) example of such fragmentation thus attributing these (positive) rules with the same fragmentation risks as they are criticised, for example, in view of the Polish draft law to prohibit majority ownership of broadcast media by foreign companies. According to the CJEU the mere fact that there are different rules in the Member States does not constitute an obstacle to the internal market so that a more differentiated approach within the EMFA would be desirable.

Ultimately, the question of internal market relevance also arises if the EMFA addresses such services that actually do not (want to) operate on a cross-border basis. This applies in particular to local and regional media that deal with local/regional topics in local/regional languages. To illustrate this: to what extent exactly is the (hypothetical) fact that a radio station operated by two persons for a municipality of 1,000 souls in Cyprus is not subject to any limitations under media concentration law an internal market problem or relevant for companies and citizens in other EU Member States who neither (can) receive the offer nor are in a competitive relationship with it? This questioning of single market relevance also applies to public service media, which only provide cross-border offerings in exceptional cases but are rather created precisely to ensure the basic supply with media and information content in a national context. Neither the technical dissemination possibilities of the internet nor the Commission’s linking of the two aims of the proposal are – in the view of this author – sufficient arguments to justify a relevance to the internal market and intervention by the EU as required by Art. 114 TFEU.

But does the EMFA at least overcome “internal market” obstacles?

A harmonising intervention by the EU based on Art. 114 TFEU requires that the contested obstacles can actually be overcome by the proposed rules. In light of the principle of subsidiarity (Art. 5(3) TEU), it is even necessary that EU action has an added value in the sense that the EU shall act only if and insofar the objectives of the proposed action cannot be sufficiently achieved by the Member States. Several Member States (see e.g. for Czech Republic, Denmark, France, Germany, Hungary, Italy, the Netherlands and Poland) have raised (serious) doubts about the respect of the principle of subsidiarity vis-à-vis the Commission. This is not without reason, given the scope and legal consequences (or lack thereof) of the individual rules of the EMFA.

A detailed consideration of each individual rule of the EMFA is not possible here, thus, referring to just a few examples should be still sufficient to show significant problems regarding ambiguities about the content and legal consequences of certain provisions, which are not only regrettable in terms of substantive law, but also in terms of the competence issue. For example, the worrying developments in media concentration are tackled with a mandatory media concentration assessment by national authorities, based on detailed criteria proposed, without, however, assigning these authorities powers of action – due to the reservation of competence for the administrative procedure for Member States – such as the possibility to ban mergers due to pluralism considerations or at least, for example, establishing an international database which would enable an assessment of developments in media concentration in the internal market. Art. 5 is entitled “Safeguards for the independent functioning” of PSM, but does in fact not prevent, for example, the composition of governing boards of PSM with an influence of political actors, but merely requires that these representatives are “at least” appointed in a non-discriminatory procedure. Other provisions, such as Art. 3 and 4(2)(b) tackling risks concerning the availability of impartial and pluralistic information and the protection of journalistic sources, exhaust themselves in a mere emphasis of already existing protection under fundamental rights, because neither monitoring and enforcement of compliance nor legal remedies are directly provided for.

Do all of the “but”- and “however”-arguments lead to a final “no” to the EMFA?

Strengthening the provisions of the EMFA in such a way that they would effectively overcome obstacles to the internal market (given such are developed more precisely in the proposal) would inevitably raise (even more intense) questions of the allocation of competences. This applies in particular to introducing law enforcement mechanisms a fortiori involving the Commission or to further increase the intervention in the structures of PSM, for which the definition of the remit must remain at the national level.

This does not mean, however, that the entire EMFA would have to fall off the cliff due to conflicts of competence, as the Commission’s Green Paper on pluralism and media concentration in the internal market did back then in 1993. Rather, the limitations described here and the considerations that must be made could be remedied by (significantly) amending the proposal without torpedoing its fundamental intentions. Some of the rules in the proposal, such as those on cross-border cooperation of regulatory authorities, are not only overdue, but also less controversial in terms of competences, although they would perhaps be better placed in a reform of the AVMSD. Other rules could be restructured to expand national leeway. Further, implementation could be shifted more to the Member State level and it could be more clearly shown what the EMFA actually wants (to remove internal market barriers) and does not want (to impair functioning national media regulation). This is above all a question of the degree of harmonisation – although the proposal sees itself as “minimum harmonisation”, this is not reflected in the draft provisions. Rather vague provisions whose implementation (by whom?) remains unclear conflict with the character of a (intentionally “strong”) regulation, from which the Commission apparently does not want to move away. It appears like the Commission’s goal of minimum harmonisation would be better accommodated by a (not per se “weaker” but maybe less intrusive) directive.