On 16 September 2022, the European Commission presented its proposal for a Regulation establishing a common framework for media services in the internet market (European Media Freedom Act – EMFA) and amending Directive 2010/13/EU (AVMSD). On the same day, the Recommendation (EU) 2022/1634 on internal safeguards for editorial independence and ownership transparency in the media sector was published.
The EMFA proposal contains partly sweeping, partly vague rules ranging from rights of media service providers, independence of public media, protection of journalistic freedom, specific rules for very large online platforms (VLOPs) and video sharing platforms, a right of customisation of devices and software for users, to rules on media market concentration and audience measurement. The draft legislative report of the European Parliament dates from 31 March 2023, with the deadline for amendments set by the CULT committee for 5 May 2023. Interinstitutional negotiations are planned to start in October 2023.
Background
Media freedom and media pluralism form important principles of the Charter of Fundamental Rights of the EU (Article 11) and the European Convention of Human Rights (Article 10). The European Commission’s 2020-2022 Rule of Law reports raised concerns regarding the media, including its 'politicisation', risks regarding the right to information and the journalistic profession, media ownership and a lack of independence of media regulators in several EU Member States. The EMFA draft stresses the problem of misallocation of economic resources, ie advertising revenues, caused mainly by non-transparent audience measurement and unfair allocation of state advertising (see Explanatory Memorandum to the EMFA, page 2).
The European Commission aims to support the recovery and transformation of the media and audio-visual sector after the pandemic and protect journalists across the EU, ensure media freedom and pluralism, high quality media services and fair[HD1] allocation of economic resources throughout the Union.
Main issues
- Scope: The EMFA covers “media services”, including television, radio, on demand audio-visual online services, but also podcasts and press publications. The scope is, therefore, far wider than the AVMS Directive. Non-commercial user generated content, private correspondence, product advertisement and corporate publishing will be out of scope (see Recital 7). When exercising editorial control over their service, even VLOPs or video sharing platforms will be considered to provide “media services” within the meaning of the EMFA (Recital 8).
- Territorial reach: The draft remains ambiguous as to its territorial reach. But based on Articles 56 and 57 TFEU, it might be assumed that all media services offered by entities based in the Union as well as entities offering their services to recipients in the Union will be covered (see also Recital 6). Clarification of the intended scope seems, however, desirable.
- In Chapter 2, the EMFA addresses the rights of recipients of media services to receive a plurality of news and current affairs content with respect for editorial freedom, and the rights of media service providers, including protection against interference in editorial policies and decisions, protection against detention, sanctions, interception, surveillance of media service providers, their family members or employees, as well as a prohibition to deploy spyware. Further, the EMFA contains certain safeguards for the independent functioning of public service media providers including an obligation on Member States to ensure that public service media providers have adequate and stable financial resources (Articles 4-5, Recital 18).
- Chapter III, among others, addresses media service providers on very large online platforms (VLOPs) as defined in the DSA (ie platforms that have more than 45m. average monthly active recipients in the EU and are designated as a VLOP pursuant to the DSA, (Article 17 and Article 2(10)). VLOPs shall allow media service providers to self-declare them as independent and regulated media service providers, putting an additional burden on the platform in the event of suspensions.
- Further, users will have a right to easily change the default settings of any device or user interface (covering hardware as well as software) in order to customise the offering. Manufacturers and developers of devices and user interfaces (eg connected TVs) shall ensure that they allow users to freely and easily customise the default settings (“customizability-by-design”).
- The EMFA also contains specific provisions for video sharing platforms as defined in the AVMSD. No new substantive rules are introduced, but a national regulatory authority may request the regulatory authority of another Member State to take actions to enforce obligations imposed on the video sharing platform under Article 28(b) of the AVMS Directive (Article 14).
- Allocation of advertising revenue and audience measurement: audience measurement is seen by the EU Commission as a decisive factor in the allocation of advertising. Accordingly, the EMFA proposes that providers of proprietary audience measurements systems shall provide to media service providers, advertisers and designated third parties, information on the methodology used by their audience measurement system (Article 23). The EMFA aims to cover measurement systems developed as agreed by industry standards within self-regulatory organisations and systems developed outside such self-regulatory approaches, including online players which self-measure or provide their proprietary audience measurement systems to the market (Recitals 9, 45 and 46).
- State advertising must be awarded according to transparent, objective, proportionate and non-discriminate criteria. Public procurement rules will remain unaffected (Article 24).
- Remarkably, the EMFA also addresses the assessment of media market concentrations (Article 21). Member States must provide transparent rules that ensure an assessment of media marketing concentrations that could have a significant impact on media pluralism and editorial independence. This assessment will be expressly distinct from the competition law assessments (including those provided for under merger control rules) and thus partly echoes the German model of “media concentration” in the broadcasting sector. The EMFA provides rules on the assessment of media concentration as well as an obligation on parties to notify an (intended) concentration (such as a merger, takeover etc.), that could have a significant impact in advance on the relevant national authorities. The draft is, however, silent on the consequences of the notification or a finding of impact (eg the possibility of voting against an intended merger or implementing safeguards).
- A new Board with new procedures: the EMFA will set up, as has increasingly become the norm in new EU regulations, a European Board for Media Services, consisting of representatives of national regulatory authorities under AVMSD. The Board will have a number of tasks, including to support and advise the Commission, draw up opinions and draft guidelines, mediate in the case of disagreements between national regulatory authorities, foster cooperation on technical standards related to digital signals, and draw up opinions including on media market concentration (Article 8 and following)).
- The Recommendation on internal safeguards for editorial independence and ownership transparency in the media sectors contains further recommendations for media service providers to: implement voluntary measures to guarantee the independence of individual editorial decisions, such as rules to ensure integrity of editorial content and editorial independence; and to make available information on their ownership easily and directly accessible to the public.
Initial reactions
The EMFA is broad in scope, but short on detail. Rules on plurality of media, freedom of media service providers from interference, as well as independence of public service media providers are already accepted and non-controversial aspects in a democratic society, and are arguably targeted more at Member States in which there is a perceived risk to media freedom. The provisions on media concentration lack concrete consequences for non-compliance so this issue is likely to remain in the hands of the Member States.
While the Commission bases the draft on Article 114 TFEU (internal market), it has been suggested that the internal market competence may not be sufficient for rules that primarily regulate media freedom rather than economic aspects of the media. There are also questions about whether a Regulation is the appropriate tool to regulate media aspects, which still vary widely between Member States. Further, the potential of the Commission to influence the Board is seen as potentially diminishing its independence. Finally, the EMFA expressly leaves certain existing legislation, namely the e-Commerce Directive, the DSM Copyright Directive, the Platform-to-Business Regulation, the DSA, the DMA, and the Regulation on Transparency and Targeting of Political Advertising, unaffected. As with the DSA, the distinctions will require a detailed review and assessment as to which rules apply and prevail in which cases.
Next steps
The draft EMFA is still in its early stages. According to Euractiv, a leaked amended draft shows the Swedish presidency has introduced certain changes including on the obligations for VLOPs as well as the preparation of guidelines on concentration. While the EMFA is now picking up speed, there still seems to be a long way to go. After its eventual entry into force, media service providers will then have six months until most of the provisions actually apply.
