Explanatory Memorandum to COM(2022)457 - Common framework for media services in the internal market (European Media Freedom Act)

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This page contains a limited version of this dossier in the EU Monitor.

dossier COM(2022)457 - Common framework for media services in the internal market (European Media Freedom Act).
source COM(2022)457 EN
date 16-09-2022


1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

This explanatory memorandum accompanies the proposal for a regulation of the European Parliament and Council establishing a common framework for media services in the internal market (the ‘European Media Freedom Act’). The proposal delivers on the political commitment by President von der Leyen, who announced the initiative in her 2021 State of the Union address. In her speech, she stressed the role of information as a public good, acknowledging that media companies cannot be treated as any other businesses and that their independence must be protected at EU level 1 . The initiative has been included in the Commission’s 2022 work programme 2 .

The media sector is part of the cultural and creative industries ecosystem 3 , one of the 14 industrial ecosystems that are key for an inclusive and sustainable recovery and for the twin (green and digital) transition of the EU economy. At the same time, media services are not only an important and dynamic economic sector, they are also essential for a healthy civic sphere and for economic freedoms and fundamental rights, including equality 4 . Independent media, and in particular news media, provide access to a plurality of views and are reliable sources of information to citizens and businesses alike. They contribute to shaping public opinion and help people and companies form views and make informed choices. They play a crucial role in preserving the integrity of the European information space and are essential for the functioning of our democratic societies and economies. With digital technologies, media services can increasingly be accessed across borders and through various means, while competition in the digital media space is increasingly international. The European Union is already a global standard setter in this field, with this proposal further strengthening and organising the European information space.

Against this background, the proposal seeks to tackle a series of problems affecting the functioning of the internal market for media services and the operation of media service providers. In particular, media companies face obstacles hindering their operation and impacting investment conditions in the internal market such as different national rules and procedures related to media freedom and pluralism. These rules include in particular scrutiny of market concentrations for media pluralism purposes and protectionist measures affecting the operation of media companies. Such rules have created fragmentation in the internal market, impacting legal certainty for media market players and resulting in additional costs when operating across borders.

The picture is further complicated by insufficient cooperation among national media regulators 5 . The European Regulators Group for Audiovisual Media Services (ERGA) has limited scope for action, and that scope is related to audiovisual media services only. Moreover, ERGA does not have sufficient tools and resources to contribute to solving cross-border matters or practical issues in key areas of media regulation. The resulting insufficient regulatory convergence affects media market players, in particular providers of audiovisual media services and video-sharing platforms, and harms the public interest. The role of media regulators is also key in the protection from rogue media service providers, including those that are state-controlled, be it financially or editorially by certain third countries, which may prejudice or pose risks of prejudice to public security and defence.

European media service providers also face increasing interference in their editorial decisions and ability to provide quality media services (i.e. services produced independently and in line with journalistic standards) in the internal market, as evidenced by the Commission’s annual rule of law reports 6 and the Media Pluralism Monitor 7 . The problem is driven by fragmented safeguards to prevent interference in the editorial freedom of all media and uneven independence guarantees for public service media 8 , leading to distortions of competitive conditions in the internal market.

Finally, internal market barriers and an uneven playing field result from the opaque and unfair allocation of economic resources. In particular, the opacity of and biases inherent to proprietary systems of audience measurement skew advertising revenue flows, affecting negatively in particular media service providers and disadvantaging competitors that provide audience measurement services abiding by industry-agreed standards 9 . The internal market is also distorted by the opaque and unfair allocation of state advertising (i.e. public funds used for advertising purposes), which may be allocated preferentially to incumbent national service providers or used to favour and covertly subsidise certain media outlets that provide government-friendly views. The regulation in this area is fragmented and limited 10 , with many Member States lacking specific rules and the existing rules varying in scope 11 , to the detriment of legal certainty and with the ensuing risk of arbitrary or discriminatory decisions.

While the gravity of the problems varies across the EU, overall they make it difficult for media service providers to use the internal market to its full potential, maintain economic sustainability and properly fulfil their societal role to inform people and businesses. The recipients of media services are also negatively impacted by an insufficient or non-independent media offer, the uneven playing field and the lacking protection of their interests.

Both Parliament 12 and Council 13 have repeatedly called on the Commission to take action to lift barriers to the functioning of the internal media market and promote pluralism and independence in that market. In the final report of the Conference on the Future of Europe, published on 9 May 2022, in their proposals, citizens called on the EU to further promote media independence and pluralism, in particular by introducing a legislation addressing threats to media independence through EU-wide minimum standards. They also called to defend and support free, pluralistic and independent media, to step up the fight against disinformation and foreign interference, and to ensure the protection of journalists 14 .

Against this background, the proposal for a European Media Freedom Act aims to improve the functioning of the internal media market.

Contents

1.

The proposal is articulated around four specific objectives:


·Fostering cross-border activity and investment in media services by harmonising certain elements of the diverging national media pluralism frameworks, in particular to facilitate cross-border service provision. Through coordination at EU level, the proposal aims to ensure that when assessing media market concentrations independent national authorities approach media pluralism and media independence in a consistent manner.

·Increasing regulatory cooperation and convergence through cross-border coordination tools and EU-level opinions and guidelines. This will promote consistent approaches to media pluralism and media independence, and provide effective protection for users of media services from illegal and harmful content, including online and with regard to service providers (including from third countries) not following EU media standards.

·Facilitating provision of quality media services by mitigating the risk of undue public and private interference in editorial freedom. The proposal aims to guarantee that journalists and editors can work without interference, including when it comes to protecting their sources and communications. By fostering editorial independence, it also guarantees better protection for the interests of recipients of media services.

·Ensuring transparent and fair allocation of economic resources in the internal media market by enhancing transparency and fairness in audience measurement and allocation of state advertising. The proposal aims to ensure transparency, non-discrimination, proportionality, objectivity and inclusiveness of audience measurement methodologies, in particular online. It will also ensure transparency, non-discrimination, proportionality and objectivity in allocation of state advertising to media outlets, in order to minimise the risks of the misuse of public funding for partisan interests, to the detriment of other market players. It will thus promote fair competition in the internal media market.

The legislative proposal is accompanied by a Recommendation, which sets out a catalogue of voluntary good practices for media companies to promote editorial independence and recommendations to media companies and Member States aimed to increase media ownership transparency. The Recommendation will contribute to mitigating the risks of unjustified interference in individual editorial decisions and enhancing access to information on media ownership 15 .

• Consistency with existing policy provisions in the policy area

This proposal is consistent with the existing EU horizontal and sectoral rules concerning media and online services. It seeks to address regulatory gaps, which affect the functioning of the internal media market.

The proposal does so firstly by building on the revised Audiovisual Media Services Directive (AVMSD) 16 , which governs EU-wide coordination of national legislation for audiovisual media. It steps up cooperation within the European Regulators Group for Audiovisual Media Services (ERGA) set up by the Directive by transforming it into the European Board for Media Services (‘the Board’) and giving it a broader scope of action and additional tasks 17 .

The proposal lays down new rules related to media services, such as those on the protection of journalistic sources and communications, state advertising and audience measurement. By doing so, it complements the copyright reform 18 , which supports the financial sustainability of the press.

The proposal is fully consistent with, and complements the e-Commerce Directive 19 and the Regulation on platform-to-business relations (P2B) 20 . It is also consistent with and complements the Digital Services Act (DSA) 21 and the Digital Markets Act (DMA) 22 , which provide horizontal frameworks setting out harmonised rules for online services. The proposal addresses remaining sector-specific issues which the two horizontal instruments do not fully address.

The proposal complements the EU competition rules, which do not directly address the impacts that market concentrations could have on media pluralism or independence, and State aid rules, which are applied on a case-by-case basis (often ex post) and do not sufficiently address the problems created by the unfair allocation of state resources to the media service providers. The proposal ensures that state advertising is systematically subject to ex ante rules on transparency, notably as regards the beneficiaries and the amounts spent, and on fair allocation of such advertising. The proposal, and in particular the state advertising provisions, are consistent with the proposal for a Regulation on the transparency and targeting of political advertising 23 .

Moreover, the proposal is complementary to and does not affect existing EU rules on transparency of ownership. The Anti-Money Laundering (AML) Directive 24 is the main instrument to ensure beneficial ownership transparency, while the EU Company Law Directive 25 regulates the information that in particular limited liability companies need to disclose in business registers. The AVMSD encourages Member States to adopt measures to make accessible information on the ownership structure of audiovisual media. The proposal will complement the existing framework by requiring all media service providers providing news and current affairs content to provide information on media ownership in particular on direct, indirect and beneficial owners, to recipients of media services.

The proposal is also consistent with the Protocol on the system of public broadcasting in the Member States (the Amsterdam Protocol) 26 , which recognises the competence of Member States to define the public service remit of public service media and to provide for their funding insofar as such funding does not affect trading conditions and competition in the EU to an extent that would be contrary to the common interest. The Amsterdam Protocol implicitly confirms that public service media are within the scope of the internal market.

The proposal is in line with the Strategic Compass for Security and Defence 27 and relevant Council Conclusions 28 . By strengthening the role and cooperation between media regulators, including in matters affecting the EU’s information space, the proposal complements the actions taken to develop the EU’s toolbox on Foreign Information Manipulation and Interference.

The proposal is in line with the Council of Europe’s Recommendation of the Committee of Ministers to Member States on public service media governance 29 . The recommendation states that public service media need to operate and evolve within a sustainable governance framework, which secures both the necessary editorial independence and public accountability.

In view of the recent threats to journalistic sources, the proposal adds a targeted safeguard against the deployment of spyware in devices used by media service providers or journalists, building on protections provided by Directive 2002/58/EC (the ePrivacy Directive), Directive 2016/680/EU (the Law Enforcement Directive) and Directive 2013/40/EU on attacks against information systems.

• Consistency with other Union policies

The proposal builds on the European democracy action plan 30 in which the Commission proposed a set of measures to promote democratic participation, fight disinformation and support free and independent media. By strengthening the protection of journalistic sources and communications, the initiative complements the Recommendation on the protection, safety and empowerment of journalists 31 , as well as the proposal for a Directive 32 and Recommendation 33 on protecting persons who engage in public participation from manifestly unfounded or abusive court proceedings (‘Strategic lawsuits against public participation’). The proposal provides concrete actions in response to the European Declaration on Digital Rights and Principles for the Digital Decade 34 , which calls for safeguarding the freedom of expression and information online, and supports the implementation of the Media and audiovisual action plan 35 , in which the Commission set out a series of actions to strengthen financial sustainability and digital transformation of the media sector.

The proposal aims at strengthening editorial independence of media service providers. In parallel, financial sustainability is a key element for protecting editorial independence from external and market pressures. As raised by stakeholders during the public consultation, the fragile economic situation of the media sector remains an issue, and has been exacerbated by the COVID-19 crisis. Securing diverse and sufficient financing sources could bolster the resilience and independence of media, and support the provision of quality services to Europeans.

Consequently, the media sector has been increasingly turning to the EU for financial support, in view of the fact that the Commission has for long co-financed the independent media coverage of European affairs to foster a European public sphere. While inevitably limited in amount relative to the scale and importance of the sector, European funding is indeed well placed to contribute to the recovery of the sector from the COVID-19 pandemic, the digital transformation of news, and the experimenting across borders of new formats or new models to monetise content online.

As a result, following the adoption of the Media and audiovisual action plan in December 2020, the Commission has bundled actions geared to support news media, in full respect of editorial independence. For example, it has set up MEDIA INVEST, a dedicated equity investment instrument under the InvestEU programme, designed to foster the financial capacity of European audiovisual companies. Equity support is also available to news media since 2022, combined with investment readiness actions to mobilise private investors and increase equity investment volumes. In parallel, the Commission is supporting the launch of a dedicated co-investment facility under the InvestEU programme with foundations and philanthropic organisations in order to target three specific mission areas, including ‘Media pluralism, democracy and culture’ 36 . Innovation is another focus of the bundle: under the research and innovation and digital programmes, financing is offered to develop innovative solutions, including in particular a soon-to-be-launched call to develop a European media data space. In addition, innovative research funded under Horizon 2020 and Horizon Europe helps to understand the impact of the media on citizens and democracy, and provide tools and strategies to foster a healthier and more diverse media landscape, tackling online disinformation and improving journalistic standards. Regular exchanges with the industry in the context of the European News Media Forum, also contribute to monitoring innovation in the sector, and provide a forum to discuss the EU agenda on the matter.

Following the Media and audiovisual action plan, the news media sector has become a dedicated focus of the Creative Europe programme, designed to support the cultural and creative sectors. The programme can finance partnerships between media organisations in order to innovate, test new formats or share good business practices across borders. Creative Europe also co-finances projects that promote a more pluralistic media environment: grants allow to provide protection for reporters (including legal support) and cover areas such as fact-finding, monitoring, advocacy work, informing the public and awareness raising. EU funding also supported the operations of media councils, as well as the activities of the Media Pluralism Monitor. As of 2023, the Commission will also allocate dedicated funding under the Creative Europe programme to support media that serve the public interest, such as investigative outlets, thus contributing to a pluralistic debate across borders and a more healthy democracy.

The demand for media funding exceeds the funds available. The European Parliament called for the reinforcement of the funding opportunities for the news media sector, in particular through a permanent News Media Fund and by strengthening the budgets for the Cross-sectoral and Media strands under Creative Europe 37 . The Council also invited the Commission to strengthen funding for independent journalism 38 . With a view to complementing current EU policies, and ultimately reinforcing the financial resilience of the sector, the Commission will map public financial schemes and initiatives developed by Member States and identify financing trends and gaps.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The legal basis for this proposal is Article 114 of the Treaty on the Functioning of the European Union (TFEU), which provides for the adoption of measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

The proposal aims to address the fragmented national regulatory approaches related to media freedom and pluralism and editorial independence. This will foster a common approach and coordination at EU level, ensure the optimal functioning of the internal market for media services, and prevent the emergence of future obstacles to the operation of media service providers across the EU.

2.

In particular, the proposal aims at tackling the following issues hindering the provision of media services in the internal market:


·national restrictions related to sources and communications of journalists as service providers, affecting the production and provision of media services;

·interference in the operation of media service providers, including their editorial decisions, and diverging approaches to protection of editorial independence;

·the risk of state interference in public service media, to the detriment of a level playing field in the single market and quality of public service media;

·the market operations of rogue operators (including media service providers that are state-controlled, be it financially or editorially, by certain third countries) that create tensions in the application of the free movement rules within the Union;

·given the increasing digitalisation of media service distribution, the risks to free provision of media services on very large online platforms, to the detriment of a level playing field in the internal market;

·national media market measures affecting the operation of media service providers restricting the free movement in the Union, thereby fragmenting the internal market and leading to legal uncertainty; the same applies to national rules and procedures for the assessment of the impact of media market concentrations on media pluralism and editorial independence;

·opacity and possible biases in audience measurement systems and methodologies, leading to market distortion, to the detriment of the level playing field in the internal market;

·unfair and un-transparent allocation of state advertising expenditure to media service providers, to the detriment of other media service providers, including those established in other Member States.

In addition, Article 114 TFEU is an appropriate legal basis for the creation of new structures under EU law. This is particularly relevant given the governance aspect of the initiative, which aims to foster closer cooperation between national media regulators within an EU-level Board, which would be tasked to promote the effective and consistent application of EU media rules.


The EU legislator must not only comply with fundamental rights when regulating the internal market 39 , but also balance competing fundamental rights 40 . The present Regulation proposal constitutes a harmonious, coordinated and multi-pronged legislative framework by which the legislator contributes to the development and protection of the internal market for media services, thereby also pursuing several further legitimate public interests (including the protection of users) and reconciling in a fair manner the fundamental rights of all the individuals concerned.

• Subsidiarity

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. Production, distribution and consumption of media content, including news, are increasingly digital and cross-border as the internet continues to drive the transformation of traditional media business models. The provision of media services across the EU is increasingly affected by global platforms, which act as gateways to media content while being prominent online advertising providers.

A common EU approach, promoting convergence, transparency, legal certainty and a level playing field for the relevant media market players is the best way to advance the internal media market. It will reduce the burden for media service providers, who have to comply with different national legal regimes when they operate in several Member States. It will enhance legal certainty for media market players, thereby promoting fair competition and cross-border investment. It will also enable media regulators to adopt coordinated responses in matters affecting the EU’s information space and in particular the protection of EU consumers’ interests.

The initiative takes due account of the Protocol on the system of public broadcasting in the Member States (the Amsterdam Protocol) and Article 4(2) of the Treaty on European Union (TEU). It will not interfere with Member States’ competence to provide funding to public service media so that they can fulfil their public service remit, as conferred, defined and organised at national level, nor will it interfere with national identities or regulatory traditions in the media field. It also takes due account of stakeholders’ views; it thus follows the proposition that exceedingly uniform and detailed EU media pluralism rules would be undesirable and disproportionate, as such rules must be adapted to the historic and cultural background of each Member State. Instead, the initiative strikes the right balance between generally couched provisions and more specific rules to reach the policy objectives.

• Proportionality

The initiative builds on existing legal frameworks and will only focus on areas where additional EU action appears necessary for the proper functioning of the internal media market, including to ensure a level playing field and independent operation of media market players across the EU. It is limited to issues on which Member States cannot achieve satisfactory solutions on their own, and provides for a well-calibrated harmonisation that does not go beyond what is necessary to achieve the objective of establishing a common framework for the proper functioning of the internal market for media services, while guaranteeing the quality of such services. The fact that several of the proposed rules are principle-based also contributes to ensuring the proposals’ proportionality.

The proposal gives rise to limited compliance and enforcement costs that will likely be offset by significant benefits for media market players and citizens. By enhancing transparency and reducing regulatory fragmentation in the market, the proposal will enhance legal certainty and fair competition while reducing market distortions. This will increase investors’ confidence and make cross-border media market transactions less burdensome, creating a positive environment for investments and free provision of media services across the EU. Citizens and businesses will also benefit from a more diverse and plural media offer, increased transparency and improved access to information.

• Choice of the instrument

The proposal takes the form of a regulation of the European Parliament and of the Council. In view of the issues to be addressed and given the economic, social and political context, a regulation is more suitable than a directive to ensure a consistent level of protection throughout the EU and reduce regulatory divergences that would hamper the independent provision of media services in the internal market. It will allow for a quick application of the new EU rules, thus addressing the problems faster. This will avoid a lengthy transposition process, prevent potential divergences or distortions during the transposition process, by stipulating directly applicable provisions and avoiding situations where Member States use the transposition process as a pretext to introduce or keep legislative measures that in substance run against independent media service providers or are otherwise discriminatory. The recourse to a regulation is also preferable given the initiative’s institutional component (the establishment of the Board). The choice of a regulation is equally justified by the increasing digitalisation and cross-border provision of media services, which calls for a swift, consistent approach across the internal market. By establishing directly applicable provisions, the proposed regulation will also ensure effective and efficient cooperation among national media regulatory authorities and bodies of the Member States.

3. RESULTS OF EX POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Stakeholder consultations

The proposal is based on extensive consultation with stakeholders, in the light of the general principles and standards for consultation of interested parties by the Commission.

A call for evidence announcing the initiative was published on 21 December 2021 and was open for feedback until 25 March 2022. A total of 1 473 responses were received 41 . A public consultation was open from 10 January to 25 March 2022 and attracted 917 responses 42 . They were both promoted through the Commission’s website, as well as through social media and specific networks. While the call for evidence aimed at gathering general feedback in response to the Commission’s announcement of the initiative, the public consultation collected views through a structured questionnaire containing specific questions regarding the initiative.

In addition, the Commission organised meetings with key stakeholders and experts to gather additional evidence and data on the specific problems to be addressed by the initiative, the policy approach and its impact, as well as technical information about existing industry practices. It also conducted targeted workshops and analysed numerous position and analytical papers received in the context of the initiative’s preparation. The preparation of the impact assessment underpinning the initiative was supported by two external studies encompassing a series of individual consultations with key stakeholders 43 .

Furthermore, the Commission discussed the initiative with members of the AVMSD Contact Committee and ERGA. These expert groups provided a direct channel to consult the most relevant authorities at Member State level. To gather views of researchers and experts with particular expertise in relevant areas (such as public and constitutional law as well as media freedom and internal market), a specific workshop with representatives from academia, ERGA and the Commission was organised on 18 February 2022.

The idea of a legislative proposal, regulating at least certain substantive areas, received support from citizens and most other stakeholders, including the media freedom community, consumer organisations, media regulators and ERGA, public and private broadcasters, content distributors and advertising ecosystem players. Among those stakeholders, there is wide support for a principle-based approach as opposed to no action or detailed standard-setting.

Non-governmental organisations and public service broadcasters particularly supported EU-level action to introduce safeguards for editorial independence, including that of public service media, while recalling the importance of the Amsterdam Protocol. Public broadcasters specifically support safeguards for editorial integrity online and guidance on the appropriate prominence of audiovisual media services of general interest.

Private broadcasters were especially in favour of common principles for media pluralism measures and audience measurement transparency, objectivity and verifiability, on the latter aspect agreeing with publishers and the advertising ecosystem players. Publishers, who are traditionally unregulated, expressed a general preference for self-regulation or a recommendation. However, they did support EU-wide measures both on protection of journalistic sources and on state advertising. Citizens strongly agreed with the need for transparency and fairness in the allocation of state advertising. Broadcasters and publishers called for effective regulation of online platforms.

As regards governance, there is overall wide support for oversight based on ERGA but differing views as to its potential future status. Regulators and the media freedom community are in favour of strengthening ERGA, while companies and business associations would rather keep it in its current form. Public authorities supported in particular regulatory cooperation at EU level to facilitate common standards for media pluralism and the strengthening of the role and resources of ERGA for further EU coordination.

• Collection and use of expertise

The Commission has relied on a wide array of expertise for the preparation of this proposal.

In addition to the public consultation and other stakeholder consultations described above, the Commission contracted two external studies to ensure a high level of coherence and comparability of analysis for all potential policy approaches.

The European Audiovisual Observatory of the Council of Europe also produced a special report on governance and independence of public service media 44 . The publication is accompanied by a comprehensive overview on the main governance safeguards for public service media in Europe.

The Commission’s rule of law reports, the annual reports produced by the Media Pluralism Monitor as well as some Eurobarometer surveys provided evidence and analysis on many relevant issues. These sources were used to identify the problems, their scale in the internal media market and their drivers. The Commission has also built on the relevant Council of Europe Recommendations, which were agreed on by all Member States 45 .

Finally, to further support evidence-based analysis, the Commission conducted a review of relevant case law and an extensive literature review, covering academic literature and a wide spectrum of policy studies and reports, including by NGOs active in the area of media freedom and pluralism.

• Impact assessment

In line with its ‘Better Regulation’ policy, the Commission conducted an impact assessment for this proposal, examined by the Commission's Regulatory Scrutiny Board (RSB). The impact assessment report was first submitted to the RSB on 13 May, and was discussed with it during a hearing on 8 June. Following a negative opinion delivered on 10 June, the report was substantially revised and re-submitted to the RSB on 11 July. The RSB delivered a positive opinion with reservations on 27 July. The impact assessment report was further revised to accommodate the RSB’s suggestions for improvement. The opinions of the RSB, and the comments and explanations of how they have been taken into account, are presented in Annex 1 to the impact assessment.

The Commission examined different policy options to achieve the proposal’s general objective, which is to improve the functioning of the internal media market.

3.

Three policy options of different degrees of regulatory intensity were assessed:


·Option 1: Recommendation on media pluralism and independence, encouraging Member States and, in certain areas, companies in the media market to implement a set of actions to promote media pluralism, editorial independence and transparency and fairness in the media market.

·Option 2: Legislative proposal and recommendation on media independence, the former providing common rules for the internal market for media services and the latter encouraging media companies and Member States to foster media independence and transparency.

·Option 3: Enhanced legislative proposal adding on top of all the legislative elements of Option 2 further obligations for companies in the media market and regulators to foster the availability of quality media services and transparent and fair allocation of economic resources in the media market.

4.

Two sub-options were considered for the governance of the legislative instrument under options 2 and 3:


·Sub-option A: a governance system based on a board supported by a Commission secretariat;

·Sub-option B: a governance system based on a board assisted by an independent EU office.

According to the Commission’s established methodology, each policy option was evaluated for economic, social and fundamental rights impacts. The preferred option is Option 2 Sub-option A. This option will meet the general objective of the intervention in an efficient, coherent, proportionate and largely effective way.

In particular, the proposed legislative instrument will establish some core principles and rules for the media market, and assign important tasks to the Board, as the collective body of independent media regulators, including tasks to provide expert advice on regulatory, technical or practical aspects of media regulation, to issue opinions on market concentrations likely to affect the functioning of the internal market and to coordinate actions with regard to media service providers (including from third countries) not following EU media standards. It will be possible to rely on the principles and rules established in the legislative instrument before national courts, and the Commission will be able to launch infringements proceedings, inter alia in case of systemic issues. The non-binding element of the policy package - the Recommendation - will suggest voluntary actions on two specific issues: media independence safeguards and media ownership transparency. Such a multi-layered and flexible approach will bring the desired benefits while optimising the costs for media market players and public authorities, also taking into account the lower cost of a Commission secretariat compared to the EU office.

The impacts of the policy options on different categories of stakeholders are explained in detail in Annex 3 to the impact assessment.

• Fundamental rights

The proposed regulation, by enhancing regulatory convergence in the internal media market, safeguarding editorial independence in conjunction with media service providers’ business freedom, and increasing transparency and fairness in the allocation of economic resources, will facilitate the provision of independent and quality media services across borders, hence promoting media freedom and pluralism. The key role of the Board in the new framework, fully independent from governments and any other public or private entities, will contribute to effective and impartial upholding of freedom of expression across the EU, protected by Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’), which corresponds to Article 10 of the European Convention on Human Rights.

The proposed regulation will also have a positive impact on the freedom to conduct a business (Article 16 of the Charter), by lifting obstacles to the freedom to provide services and limiting the risks of certain media market players being subject to discriminatory treatment.

4. BUDGETARY IMPLICATIONS

The budgetary impact of the proposal for this regulation will be covered by the allocations laid down in the 2021-2027 multiannual financial framework under the financial allocations for the Creative Europe programme, as detailed in the legislative financial statement accompanying the proposal.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

The Commission will establish a comprehensive framework to continuously monitor the output, results and impact of this legislative instrument. This includes in particular a new independent monitoring mechanism to identify and assess risks to the functioning of the internal market for media services. An evaluation of the instrument and a report to the European Parliament, the Council and the European Economic and Social Committee are envisaged within 4 years from its entry into force and every 4 years thereafter.

• Detailed explanation of the specific provisions of the proposal

Chapter I sets out the subject matter and scope of the Regulation and the definitions of key terms used in the Regulation. In particular, it states that Chapter II and Chapter III, Section 5 of the Regulation are minimum harmonisation provisions.

Chapter II contains rights of recipients of media services and rights of media service providers in the internal market. It also sets out safeguards for the independent functioning of public service media and duties of media service providers in the internal market.

Chapter III lays out a framework for regulatory cooperation and a well-functioning market for media services.

Section 1 provides that the independent national regulatory authorities or bodies of the Member States that are in charge of implementation of the AVMSD are responsible for the application of this Chapter and grants them appropriate powers of investigation to carry out their tasks.

Section 2 establishes the European Board for Media Services, the collective body of independent media regulators, replacing and succeeding the European Regulators Group for Audiovisual Media Services (ERGA). It sets out the requirements for the independence of the Board and specifies its structure. The Board will receive administrative and organisational support, required for carrying out its tasks, from a secretariat provided by the Commission. The Chapter lists the tasks of the Board under the Regulation.

Section 3 establishes rules and procedures for regulatory cooperation and convergence in the internal media market, comprising a mechanism for structured cooperation, requests for enforcement measures, guidance on media regulation matters and coordination of measures concerning third-country media services. The provisions are intended to ensure a closer cooperation among national regulatory authorities and bodies in different areas of media regulation.

Section 4 addresses specific issues concerning the provision of media services in a digital environment. Regarding the provision of media services on very large online platforms, it builds on existing horizontal legislation by providing additional safeguards for editorial integrity of content provided online by media service providers that adhere to certain regulatory or self-regulatory standards, and establishing a structured dialogue between very large online platforms and relevant media ecosystem counterparts. The Section also provides for the right of customization of audiovisual media offer in devices and user interfaces controlling access to audiovisual media services and the corresponding obligation of manufacturers and developers to technically enable such customisation.

Section 5 sets out a legal framework for national measures affecting the operation of media service providers and lays down requirements for national rules and procedures related to the assessment of the impact of media market concentrations on media pluralism and editorial independence. The Board will be given the task of taking position on instances where the functioning of the internal market may be affected.

Section 6 establishes requirements for audience measurement systems and methodologies deployed by relevant market players. The rules are accompanied by an encouragement to draw up codes of conduct and to foster exchanges of best practices. Section 6 also provides for common requirements on the allocation of state advertising expenditure to media service providers, without affecting the public procurement rules and the State aid rules.

Chapter IV sets out final provisions, in particular concerning monitoring, evaluation and reporting. The Regulation includes a mechanism for the Commission to monitor risks to the functioning of the internal market for media services on a regular basis, in consultation with the Board. The Chapter also repeals the relevant Article of the AVMSD and specifies the entry into force and the start of application of the Regulation.