On 16 September, the European Commission (“Commission”) published its much-anticipated proposal for a Media Freedom Act (“MFA”). The proposed MFA is an ambitious initiative. It includes rules that would apply to all actors of the media ecosystem (Member States, broadcasters, press publishers, on-demand players, online platforms). It also seeks to address several complex issues which have been facing the media sector for decades and which have become more pronounced in recent years. Those include political interference with editorial decisions, the independence of public service media (“PSM”), media concentration, and platforms’ arbitrary decisions over media content. Against this background, proposing a regulatory tool that may contribute to the protection of media freedom and media pluralism, which are prerequisites for a well-functioning democracy, is a worthy initiative. That said, this initiative raises doubts as to the adequacy of the means it proposes to safeguard those principles (e.g., it may exacerbate the regulatory asymmetries between platforms and media service providers). This blog post discusses whether the MFA proposal can tackle the issues it is set to address in an effective and legitimate manner.
Brief description of the MFA proposal
In terms of the substantive matters it tackles, the MFA proposal can be divided into five different parts:
The first part establishes safeguards for media freedom, such as the Member States’ obligation to respect the editorial independence of media service providers; the Member States’ obligation to set up a process for the appointment (and dismissal) of PSM management that is governed by transparent and non-discriminatory criteria; and the obligation of media service providers to ensure disclosure of any conflict of interest that may affect the provision of news and current affairs content (Articles 3-6).
The second part is about the institutional set up. It entrusts national media regulators with the task of ensuring the effective implementation of the MFA and creates a mechanism of cooperation between them. It further establishes the European Board for Media Services, which will replace and succeed the European Regulators Group for Audiovisual Media Services. The task of the Board will be to promote the effective and consistent application of the MFA by, inter alia, supporting the Commission through technical expertise (Articles 7-16).
The third part establishes a set of obligations for platforms, such as procedural requirements that must apply to a platform’s decision to suspend content offered by a media service provider (Articles 17-19).
The fourth part establishes a framework for the well-functioning of the media market, including the Member States’ obligation to have in place rules for the assessment of media market concentrations that may have a significant impact on media pluralism (Articles 20-22).
The fifth part establishes rules to ensure a transparent and fair allocation of resources, such as the obligation to ensure that audience measurement systems comply with the principles of transparency and non-discrimination and the Member States’ obligation to ensure that public funds granted to media service providers for the purposes of advertising are awarded according to transparent and objective criteria (Articles 23-24).
The MFA proposal is accompanied by a Recommendation. As its name suggests, this document does not have binding legal force. Moreover, the Recommendation focuses on internal safeguards for editorial independence and ownership transparency. In other words, it does not cover the full set of issues tackled by the MFA proposal (e.g., how media market concentrations should be assessed).
On the face of it, the MFA proposal is as multi-faceted as it should be. It takes account of the wide range of actors that may pose challenges to media freedom and media pluralism by proposing obligations for Member States, “media service providers” (a broad term that covers TV and radio broadcasters, on-demand media content providers, and press publishers), and platforms. However, many gaps remain to be filled. Notably, the Commission has arguably not made a convincing case that the proposal is aligned with the principle of conferral (which governs the limits to EU competences), nor has it explained how exactly the obligations established in the MFA have “teeth” to improve the status quo ante. What is more, as it currently stands, the text is likely to exacerbate the regulatory asymmetries between media service providers and online platforms and largely misses the target as to how platforms should be regulated to protect media pluralism. Within the sphere of “traditional” media services, certain issues remain unaddressed (e.g., effective supervision of specific media service providers). Finally, further reflection is needed on the institutional set up in terms of the tasks assigned to the regulators that will oversee compliance with the MFA (e.g., monitoring the press sector) and on ensuring that the competent regulators have sufficient resources to perform their mission effectively. I address these issues below.
Legal basis, subsidiarity and proportionality
As I have explained in a previous blog post, the EU has limited law-making powers in the areas of media freedom and media pluralism. Pursuant to Articles 167(1) and 6(c) TFEU, the EU may merely carry out actions to support, coordinate or supplement action taken at the national level in order to promote media policies. In that regard, Article 167(5) TFEU provides that the EU may adopt incentive measures and recommendations, but not instruments that would harmonise national media laws and regulations. Post-Lisbon, the Charter of Fundamental Rights of the EU (“CFREU”) became legally binding. Though the Charter establishes the (EU’s) obligation to “respect” media freedom and media pluralism (Article 11(2)), it also explicitly provides that it does not afford new powers or tasks to the EU in the field of fundamental rights and principles. In other words, Member States remain primarily responsible for protecting these values at the domestic level. The rationale for this division of competences is that Member States are better placed to design media regulation in accordance with their traditions, community needs, and specificities of domestic markets.
Against this background, the legal basis on which the MFA proposal rests is Article 114 TFEU, the provision on which the EU relies to “adopt measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States, which have as their objective the establishment and functioning of the internal market”. In light of the competence limitations introduced by the TFEU and the CFREU discussed above, one may wonder about the choice of legal basis given that the MFA will seek to harmonise a range of issues pertaining to national media policies.
However, choosing Article 114 TFEU does not mean that the proposal is doomed from the outset. For example, the Audiovisual Media Services (AVMS) Directive, which regulates the activities of TV broadcasters, on-demand audiovisual service providers and video-sharing platforms, also relies on Article 114 TFEU. Yet, there is an important difference between the two instruments. In addition to establishing rules specific to media content (e.g., obligations concerning the fight against hate speech and the protection of minors), the AVMS Directive has a clear “internal market component”, namely the “country of origin” principle whereby providers that operate legitimately in the Member State where they are established can offer their services to the audiences of other Member States. It is currently unclear what the “internal market component” of the MFA proposal is. The Explanatory Memorandum is restricted to mentioning that the initiative “aims to address the fragmented national regulatory approaches related to media freedom and pluralism and editorial independence”. It then lists the issues which hinder the completion of the internal market (e.g., State interference with editorial decisions, obstacles to distributing media content on very large online platforms) and merely notes that “the objectives of the intervention cannot be achieved by Member States acting alone, as the problems are increasingly of a cross-border nature and not limited to individual Member States or to a subset of Member States”. Similar remarks are made in Recitals (4) and (5) of the MFA proposal.
The above seems hardly enough to justify intervention on the basis of Article 114 TFEU. There is no detailed discussion of the national measures that effectively restrict the freedom to provide media services, nor does any evidence-based analysis take place to set out the extent to which affected providers are discouraged from penetrating the market of another Member State. In other words, the MFA proposal appears to lack context, and the justifications put forward by the Commission could be relevant to anyinitiative that seeks to harmonise domestic regulations. Moreover, unless a more robust internal market rationale for the MFA is offered, it is dubious whether reliance on Article 114 TFEU would be supported by the Court of Justice of the EU (“CJEU”). When assessing the validity of the legal basis on which an instrument rests, the CJEU takes account of the “aim and content” of the measure (i.e., the primary objective that the instrument concerned pursues, the principles that underlie it and its ideological premises). The legal test is strict: “recourse to Article  is not justified where the measure to be adopted has only the incidental effect of harmonising market conditions within the [EU]” [emphasis added]. For the reasons discussed above, it is dubious whether the MFA proposal would pass this test as it currently stands.
As a result, in order to survive judicial review, a more convincing case needs to be made as to the chosen legal basis and how the MFA complies with the principle of subsidiarity.
The same remark can be made about compliance with the principle of proportionality. The Explanatory Memorandum simply notes that the MFA proposal “is limited to issues on which Member States cannot achieve satisfactory solutions on their own”. Aside from the fact that the point on national issues is not sufficiently developed, the Commission refrains from discussing how the MFA would remedy problems that may not be resolved by the existing EU toolkit, including competition and State aid rules, the “Rule of Law” mechanism, and the AVMS Directive (see my analysis here).
All in all, unless the lacunae discussed above are addressed, the MFA will be vulnerable to legal challenge.
Exacerbating the regulatory asymmetries between media service providers and online platforms?
It is widely known that contrary to “traditional” media, online platforms have been subject to “light-touch” regulation. This is gradually changing as the legislator has begun to acknowledge the role that platforms play in determining the variety and quality of content users access. For example, the revised AVMS Directive establishes obligations for video-sharing platforms. The DSM Copyright Directive establishes an ancillary copyright for press publishers for the online use of their publications. Such changes not only reflect users’ increasing use of platforms in order to engage with media content, they also attempt to address the regulatory asymmetries that are pervasive in the media landscape. Those regulatory asymmetries can distort competition. Media service providers and platforms often compete for the same audiences and the former must incur significant costs in preventing risk (e.g., by ensuring that their services are aligned with content standards and ownership restrictions) and complying with decisions adopted by the competent regulator. Instead of narrowing that gap, the MFA is likely to exacerbate the existing asymmetries. I will illustrate this point by referring to the rules included in the MFA proposal for the assessment of media market concentrations.
One of the major changes that the MFA will bring about is the Member States’ obligation to provide, in their national legal systems, substantive and procedural rules which ensure an assessment of “media market concentrations” that could have a significant impact on media pluralism and editorial independence (Article 21). A key issue that arises from this obligation is the term “media market concentration”, which is defined as a concentration within the meaning of the EU Merger Regulation that involves “at least one media service provider” (Article 2(13)). In turn, the term “media service providers” does not cover platforms, which are distinguished from the former and which are subject to a different set of rules. As I have argued elsewhere, this approach fails to consider that platforms exercise editorial control by moderating, removing and ranking media content. Using a provocative example, if Facebook and Twitter merged, this would not qualify as a “media market concentration” for the purposes of the MFA (i.e., it would not be subject to an assessment that would examine the impact of the merger on opinion-forming).
Unless the term “media market concentration” is defined in a more nuanced manner, the MFA is likely to widen the regulatory asymmetries between media service providers and platforms. In order to understand the implications of the Commission’s suggested approach, the following needs to be considered. In recent years, several Member States that had in place rules to prevent media concentration have abolished them in order to enable national media to scale in a more globalised landscape dominated by platforms. If the proposal moves forward, those Member States would need to re-introduce such rules to comply with the MFA. Other Member States have not revised them (to the effect that they still bind traditional media only). Against this background, platforms are (still) only subject to horizontal merger control rules (we all know how well that worked) and, following the adoption of the Digital Markets Act (“DMA”), gatekeeper platforms will only be subject to a reporting obligation. The approach adopted by the MFA proposal needs to change.
Obligations for platforms: Does the MFA proposal miss the target?
The Commission suggests rules that will govern the relations between VLOPs (within the meaning of the Digital Services Act) and media service providers. Those rules will apply to the extent that a media service provider submits a declaration that it is editorially independent from Member States and third countries and that it is subject to (hard, self-, or co-) regulation (Article 17(1)).
As the proposal currently stands, the obligations for platforms may miss the mark. For example, under Article 17(2), where VLOPs decide to suspend the provision of their online intermediation services in relation to content provided by a media service provider on the grounds that such content is incompatible with their terms and conditions, they must take all possible measures to communicate to the media service provider concerned the statement of reasons accompanying that decision, as required by Article 4(1) of the platform-to-business (“P2B”) Regulation. It is not clear why this obligation needed to be included in sector-specific regulation. VLOPs providing online intermediation services for the purposes of the MFA are also “online intermediation service providers” within the meaning of the P2B Regulation. Similarly, media service providers that rely on such VLOPs to reach audiences are “business users” for the purposes of the P2B Regulation. In other words, it is not clear what Article 17(2) seeks to achieve especially given the fact that the P2B Regulation applies irrespective of a platform’s size (i.e., it is not limited to VLOPs). Moreover, according to the DMA, social networks and video-sharing platforms are not “online intermediation services”; they are distinguished from the latter and they form two different categories of platform services. These definitional inconsistencies must be addressed.
Furthermore, pursuant to Article 17(3), VLOPs are required to take all the necessary technical and organisational measures to ensure that the complaints submitted by media service providers in the context of Article 11 of the P2B Regulation are processed and decided upon with priority and without undue delay. By means of a reminder, Article 11 of the P2B Regulation establishes the obligation to set up a complaint-handling mechanism. This provision requires online intermediation service providers to handle complaints “swiftly and effectively”. This arguably prevents undue delays in complaint processing. In other words, the only added value of Article 17(3) is that it establishes that complaints submitted by media service providers deserve differentiated treatment because they must be decided upon with priority. This is justified by the fact that media service providers distribute information about matters of common concern, including news and current affairs content. Such content is perishable and, by the time a complaint is handled, it may lose its relevance to the public. Moreover, this provision can contribute to the fight against the spread of disinformation. However, without specifying what “with priority” means, the provision may not make a significant difference in practice. In that regard, it is worth mentioning that timeframes are not new to content regulation. For example, the Online Terrorist Content Regulation sets specific time limits within which platforms must process a removal order. A similar solution can be envisaged in order to ensure that socially relevant content finds its way to the audiences.
The other provisions that apply to platforms refrain from setting any strict obligations that could effectively prevent abuses of power over the distribution of media content. For example, in the case of frequent suspensions, the VLOP concerned must engage in a meaningful and effective dialogue with the media service provider (Article 17(4)); VLOPs are bound by a reporting obligation that requires them to disclose the number of instances of restriction or suspension as well as the grounds for those decisions (Article 17(5)); and VLOPs are expected to participate in the structured dialogue between interested stakeholders that the Board will organise to discuss experience in the application of the above obligations.
In sum, further reflection is needed throughout the legislative process in order to ensure that the MFA proposal is fit for addressing platform practices that affect the distribution of media content. Overarchingly, it remains unclear why the obligations discussed above would only bind VLOPs. It is reminded that the definition of VLOPs is quite rigid, covering platforms that have 45 million monthly active service recipients. No other criteria, including qualitative parameters, apply for a platform to qualify as a VLOP. As a result, the approach suggested by the MFA proposal ignores the fact that there may be platforms which do not reach that threshold but are nonetheless popular for the consumption of news content and may vary from one Member State to another.
Complex problems require “simple” solutions?
The MFA proposal seeks to address controversial issues. This may explain why several provisions are drafted in “high level” terms. Combined with the competence limitations discussed above, this may be justified. However, it also runs the risk of not putting any meaningful rules on the table. This concerns, for instance, Article 20 that establishes, inter alia, that any measure taken by a Member State that is liable to affect the operation of media service providers in the internal market must be proportionate, reasoned, transparent, objective and non-discriminatory. Similarly, Article 3 enshrines the users’ right to receive a plurality of news and current affairs content, produced with respect for editorial freedom of media service providers, to the benefit of the public discourse. Though such rules confirm the EU’s commitment to media freedom and media pluralism, they also raise the question as to whether they add to the CFREU (which is primary EU law and binding on Member States) and the long line of case law of the European Court of Human Rights. To prevent such rules from becoming political declarations, an adequate enforcement mechanism is needed (more on that below).
Another issue that arises from the sensitive nature of the matters the MFA proposal tackles is that certain problems are simply not addressed. For example, it is not clear why the transparency safeguards that the MFA proposal suggests for the allocation of State advertising (Article 24) do not apply to other schemes, such as schemes supporting PSM or other media service providers. Related to this point, it is also unclear why the MFA proposal is restricted to requiring Member States to have in place independence safeguards for the appointment of the head of management and the members of the board of PSM, but it does not suggest any independence safeguards for the bodies that are entrusted with assessing compliance with the PSM remit (which may not necessarily be national media regulators).
The institutional set up
The implementation of the MFA will rely on a number of actors that will oversee compliance with the obligations it establishes, including national regulators, potentially national competition authorities (that may be entrusted with examining the impact of media market concentrations on media pluralism), the European Board for Media Services (“the Board”), and the Commission.
There are several issues that arise from the institutional set up of the MFA proposal, which are worthy of another blog post. However, there are two issues that have stricken me after a first reading of the text. First, national media regulators (mainly regulators monitoring audiovisual media) and the Board, which will replace and succeed the European Regulators Group for Audiovisual Media Services, will oversee compliance with the MFA. But the MFA will cover several players, including press publishers that have traditionally been subject to self-regulatory codes of practice. The implications of this change for the free press can be significant and this must be reflected upon in the legislative process. Secondly, the remit of national media regulators is becoming more and more demanding. For instance, in addition to overseeing compliance with national media regulation and the laws transposing the AVMS Directive, national media regulators will also need to contribute to the effective implementation of the DSA and -apparently- the MFA. Though Article 7(3) of the MFA proposal lays down that “Member States shall ensure that the national regulatory authorities or bodies have adequate financial, human and technical resources to carry out their tasks under this Regulation”, this is easier said than done in the light of the avalanche of recently adopted regulations that add to their to-do list.
The MFA proposal is an ambitious and complex initiative. This blog post has only scratched the surface, but it illustrated that, as the legislative process unfolds, several issues need to be addressed for the MFA to (a) survive judicial review, and (b) establish a set of obligations which add meaningfully to the existing toolkit.
Authored by Konstantina Bania
Image Source Pixabay