EMFA Article 25. Allocation of public funds for state advertising and supply or service contracts

Public funds allocated for state advertising and supply or service contracts are an important source of revenue for many media service providers and providers of online platforms, contributing to their economic sustainability. In order to ensure equal opportunities in the internal market, access to such funds should be granted in a non-discriminatory way to any media service provider or provider of an online platform from any Member State which can adequately reach some or all of the relevant members of the public. Moreover, public funds allocated for state advertising and supply or service contracts could make media service providers and providers of online platforms vulnerable to undue state influence or partial interests to the detriment of the freedom to provide services and fundamental rights. An opaque and biased allocation of such funds is therefore a powerful tool to exert influence on the editorial freedom of media service providers, ‘capture’ media service providers or covertly subsidise such providers to gain unfair political or commercial advantage or favourable coverage. Public funds allocated for state advertising and supply or service contracts are in some regards regulated through a fragmented framework of media-specific measures and Union public procurement rules, which do not offer sufficient protection against preferential or biased distribution. In particular, Directive 2014/24/EU of the European Parliament and of the Council does not apply to public service contracts for the acquisition, development, production or co-production of programme material intended for audiovisual media services or radio media services. Media-specific rules on public funds allocated for state advertising and supply or service contracts, where they exist, diverge significantly from one Member State to another. That could create information asymmetry for media market players and have a negative impact on cross-border economic activity in the internal market for media services. Most importantly, it could distort competition, discourage investment and be detrimental to a level playing field in the internal market for media services.

In order to ensure undistorted competition between media service providers and online platforms and to avoid the risk of covert subsidies and of undue political influence on the media, it is necessary to establish common requirements of transparency, objectivity, proportionality and non-discrimination in the allocation of public funds or other state resources to media service providers and providers of online platforms for state advertising or in purchasing goods or services from them other than state advertising, for example, audiovisual productions, market data and consulting or training services. Where possible, with due regard to the national and local specificities of the relevant media markets, to national governance models and to the division of competence between national, regional and local level in the Member States, taking into account, in particular, the amount of state resources allocated and the number of potential providers of relevant advertising services or relevant goods or services other than advertising, such allocation should aim to ensure media plurality, in particular by benefitting a variety of different media service providers and providers of online platforms. Such allocation should not result in an unjustified and disproportionate advantage for certain providers. In order to ensure a high level of transparency, it is important that the criteria and procedures used to allocate public funds to media service providers and providers of online platforms for state advertising and supply or service contracts be made publicly available in advance by electronic and user-friendly means. The common requirements regarding state advertising and supply or service contracts should cover public funds allocated both directly and indirectly, for instance through specialised intermediaries such as advertising agencies and advertising exchange providers. It is also necessary to establish common requirements to publish information on the recipients of state advertising expenditure and the amounts spent. It is important that Member States make the necessary information related to state advertising publicly accessible in an electronic format that is easy to view, access and download, in compliance with Union and national rules on commercial confidentiality. It is also necessary for national regulatory authorities or bodies or other competent independent authorities or bodies in the Member States to monitor and report on the allocation of public funds for state advertising to media service providers and providers of online platforms. Where requested by national regulatory authorities or bodies or other competent independent authorities or bodies, public authorities and entities should provide them with additional information necessary to assess the completeness of the information published and the application of criteria and procedures used for the allocation of such funds. This Regulation should not affect the application of the Union’s public procurement and State aid rules.