Media Law not to be used by Member State to circumvent EU regulatory framework for electronic communications

On 29 January 2014, the District Court in The Hague (Den Haag) in The Netherlands decided to render two provisions of national law ineffective for reason that the legislator, by adopting those provisions, violated the rules of the EU regulatory framework for electronic communications.  The alleged provisions require that cable operators make available the channel package which they offer to their subscribers, for resale purposes, to third parties (their competitors), in order to promote competition on their cable systems and give consumers more choice.

The State of The Netherlands relied heavily on Article 1 paragraph 3 of the 2002 Framework Directive for electronic communications (as amended in 2009), which stipulates that “This Directive as well as the Specific Directives are without prejudice to measures taken at Community or national level, in compliance with Community law to pursue general interest objectives, in particular relating to content regulation and audio-visual policy”.

The State argued that the contested provisions pursued specific objectives of audio-visual policy and that the purpose of assessment is that consumers can choose from whom they purchase their television package. This freedom of choice, according to the State, should lead to competition, lower prices and better services.

The court, however, considered that in the present case, the contested provisions could not be seen as an audio-visual policy, now that those provisions were only intended to achieve that a standard package was forcefully offered for resale. This forced resale, according to the court, would not result in more content for the consumer to choose from: “At most, consumers can purchase the same standard package from a competitor for a lower price”.

Furthermore, the court recalled that the aim of the EU regulatory framework for electronic communications is progressively to reduce ex-ante sector specific rules as competition in the markets develops and ultimately, for electronic communications to be governed by competition law only. Promoting competition and consumer interests are, according to the court, “goals which EU competition law itself pursues and guarantees”; as the EU regulatory framework for electronic communications aims at full harmonization, the national legislator on this point has no powers anymore.

A further attempt by the State (supported by Tele2) to uphold the contested provisions was based on Article 31 of the Universal Service Directive (the “Must Carry” provision). The State and Tele2 argued that the resell obligation could be upheld on the basis of the “must carry” rules. The court, however, denied this, reasoning that Member States may only impose such obligations if they are necessary to meet general interest objectives as clearly defined by each Member State and they are proportionate and transparent. In the present case, according to the court, the contested provisions do not contain “must carry” obligations, but rather a “must resell” obligation, which goes beyond the purpose of the “must carry” rules, which merely intend to secure the receipt of the intended programme package by the end users. In addition, the court considered that the contested provisions do not comply with the requirement of Article 31 that “must carry” obligations must be in the general interest, since the contested provisions only pursue an economic interest.

Interestingly enough, in a similar case in Belgium, the authorities managed to uphold the resell obligation which they imposed on a number of cable operators; even against the opinion of the European Commission.

For an English translation of the judgement of the District Court in The Hague (Den Haag), click here (pdf).

For information of the situation in Belgium, click here (pdf).

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