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European Union: European Court of Justice Rules on German Public Broadcasting Contribution

(Jan. 7, 2019) On December 13, 2018, the European Court of Justice (ECJ) held that a “contribution” required to be paid by all German households to public broadcasters is compatible with European Union (EU) law, in particular with the rules on preferential state aid. The request for a preliminary ruling was submitted by a judge from the Regional Court of Tübingen (Landgericht Tübingen). He asked that the ECJ determine, among other things, whether the broadcasting contribution represents preferential state aid that benefits public broadcasters to the exclusion of private broadcasters, which infringes EU law and thus must be notified to the Commission. (Case C‑492/17, Südwestrundfunk v. Tilo Rittinger and Others, Dec. 13, 2018, ECLI:EU:C:2018:1019, InfoCuria website; Consolidated Version of the Treaty on the Functioning of the European Union (TFEU) arts. 107–109, 2016 O.J. (C 202) 1, EUR-Lex website.)

Background

In Germany, enacting broadcasting legislation falls within the jurisdiction of the individual German states. It is mostly regulated in the Interstate Broadcasting Treaty. (Staatsvertrag für Rundfunk und Telemedien [RStV] [Interstate Broadcasting Treaty], Aug. 31, 1991, as amended, Media Authorities website.) The power to regulate broadcasting includes making decisions on the financing of public broadcasting corporations. Broadcasting fees are used to ensure that public broadcasters are able to “meet the public’s essential needs.” (Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Nov. 4, 1986, Docket No. 1 BvF 1/84, DFR website.)

In 2013, the German states changed the fee structure and introduced a “broadcasting contribution” per household (Rundfunkbeitrag) that replaced the previous broadcasting fee. Every household currently pays a monthly fee of €17.50 (around US$19.91) no matter how many TVs, radios, or internet-enabled computers exist in the household. The fee also covers private-use vehicles. Different rules exist for businesses and their premises. (For an overview of the German broadcasting fee system, see Kelly Buchanan, Jenny Gesley, Sayuri Umeda, Funding Public Broadcasting: Should Households Pay a Fee for Owning a Television?, IN CUSTODIA LEGIS (Jan. 18, 2018).)

Facts of the Case

The applicants in the main proceedings in Germany either did not pay or did not pay in full the required broadcasting contribution. The competent state broadcasting institution in the German state of Baden-Württemberg instituted enforcement proceedings against them to collect the unpaid amounts for the years 2013–16. (Case C‑492/17, at 13–15.) The debtors filed suit against the actions. The court that referred the questions to the ECJ stated that the questions on the enforcement of unpaid debt were closely related to the applicable substantive law, which it considered contrary to EU law. It argued that the broadcasting contribution was contrary to EU law because it constitutes state aid, is used to finance the establishment of a new terrestrial digital broadcasting system, gives public broadcasters several advantages over private broadcasters—for example, with regard to enforcement powers—and infringes the freedom of information, freedom of establishment, and principles of equal treatment and nondiscrimination. (Id. at 21–27.) The ECJ restricted its ruling to the questions of state aid and whether the change in the fee structure constitutes existing aid or new aid, and found the other questions inadmissible as primarily matters of German rather than EU law. (Id. at 52.)

Ruling

The ECJ held that the change in the fee structure did not constitute a substantial alteration to the system of financing public broadcasting that required notifying the European Commission. The Court recalled that EU law provides that an increase in the original budget of an existing state aid scheme by up to 20% is not to be considered an alteration to existing aid and therefore the Commission does not need to be notified. (Id. at 55; Commission Regulation (EC) No. 794/2004 of 21 April 2004 Implementing Council Regulation (EC) No. 659/1999 Laying Down Detailed Rules for the Application of Article 93 of the EC Treaty, art. 4, para. 1, sentence 2, 2004 O.J. (L 140) 1, EUR-Lex website.) In the case at issue, the change in the fee structure did not substantially change the system of financing German public broadcasting because the objectives, beneficiaries, public tasks assigned to the public broadcasters, and compensation the public broadcasters receive remained essentially the same. (Case C‑492/17, at 59–65.) The ECJ pointed out that the change in the fee structure was aimed at “simplifying the conditions of levying the broadcasting contribution, in a context of evolving technologies for receiving the public broadcasters’ programmes.” (Id. at 64.)

Finally, the ECJ stated that the enforcement powers that the public broadcasters enjoy were not altered when the new broadcasting contribution was introduced. They had therefore already been taken into account by the European Commission in a prior decision in 2007 on whether the financing of public broadcasters in Germany is compatible with EU law. Such powers are inherent in the public tasks of public broadcasters and comply with EU law. (Id. at 70–72; Commission Decision on State Aid E 3/2005 (ex- CP 2/2003, CP 232/2002, CP 43/2003, CP 243/2004 and CP 195/2004) – Financing of Public Service Broadcasters in Germany, C (2007) 1761 final (Apr. 24, 2007).)