Biting More Than It Can Chew

Among (too) many other things, the recently adopted European Media Freedom Act (EMFA) introduced an assessment of the impact of media market concentration on media pluralism and editorial independence. It thereby aims to address the growing economic threats media pluralism and freedom have been facing all across Europe. These issues have been highlighted in Member States such as Poland or Hungary where over recent years illiberal populist governments have negatively impacted both the state of the media by capturing public and private media outlet, and competition law enforcement in the media sector. However, looking at the recent media merger cases in Poland as well as the substantive and institutional competition law framework, serious skepticism arises as to whether the Act will provide efficient solutions.

Origins of the EMFA

The much awaited proposal for a regulation was published by the Commission in September 2022. Adopted on 11 April 2024, the European Media Freedom Act entered into force on 7 May 2024. The new rules will apply as of 8 August 2025. It was presumed that the instituions  entered the work with the joint aim to conclude the process before the upcoming European Parliament elections in June 2024. The speed with which it was adopted underlines the relevance of free and plural media in guaranteeing respect for the right to vote. While the discussions and points of criticism of the Act have mainly focused on the measures chose as well as their legal basis, not enough has been said about the implications of the media pluralism test for mergers. Analysing it in detail, however, reveals that the proposed assessment may not be capable of protecting media freedom and pluralism from the negative impact of market processes.

The EMFA’s Media Pluralism Test

The  media pluralism test found in Article 22 EMFA covers ‘media market concentrations.’ Initially, the Act proposed a narrow definition of media market concentrations – concentrations within the meaning of Article 3 of EU Merger Regulation, which involve at least one media service provider. These are entities who provide a media service, which consists of providing programmes or press publications to the general public, by any means. Their aim is to inform, entertain or educate. They work under the editorial responsibility of a media service provider and have editorial responsibility for the choice of the content of the media service and determine the manner in which it is organised. There has been criticism that the exclusion of online platforms who provide programmes or publications and exercise editorial control through moderating and ranking content – imagine if Facebook and Twitter merged… – from the definition of media service providers could lead to regulatory assymetries further disadvantaging traditional media outlets. In response thereto, the final provision stipulates that a concentration including at least one online platform providing access to media content shall be treated as a media market concentration as well.

The Uncertain Meaning of Media Pluralism and Editorial Independence

More specifically, Article 22 EMFA states the Member States shall introduce substantive and procedural rules that ensure an assessment of media market concentrations that could have a significant impact on media pluralism and editorial independence. Presuming these two criteria shall be assessed cumulatively, not alternatively, this phrasing may limit the test’s scope of application. The initial draft lacked any definition of either media pluralism or editorial independence, and merely summarised the countless academic contributions discussing its layers (macro, meso, micro) or dimensions (internal vs external) in a footnote in EMFA’s Impact Assessment. The legislators now stated in recital 64 that media pluralism should be understood as the possibility to have access to a variety of media services and media content which reflect diverse opinions, voices and analyses. This, however, is a far cry from specifying how the impact on media pluralism and editorial independence should be measured. Instead, the Act merely lists things to take into account. These include effects on opinion-forming, diversity of market players, online environment, parties’ interest, links or activities in other businesses for media pluralism and the impact on editorial teams and measures for guaranteeing editorial independence. We may, however, expect guidelines by the Commission expanding on these issues. The updated article also refers to including the Commission’s annual rule of law report concerning media pluralism and media freedom when assessing media market concentrations. Interestingly, it also offers a possibility for the parties involved in the transaction to offer commitments to safeguard media pluralism and editorial independence.

The Assessment of Media Market Concentrations

The proposed assessment of media market concentrations is supposed to be distinct from a competition law assessment, such as national merger control rules. Nor is it meant to prejudice Article 22(4) of the EU Merger Regulation, which allows Member States to introduce in their merger review systems further measures to protect legitimate interests such as media plurality. The new rules for the assessment of media market concentrations are meant to be transparent, objective, proportionate and non-discriminatory. Member States must also designate national regulatory authorities or bodies which will be responsible for this assessment and to whom the parties of the media market concentrations shall pre-notify their planned transactions. The national regulatory authority or body is defined with reference to Article 30 of the Audiovisual Media Services Directive (AVMSD). This renders the authorities or bodies enforcing Article 22 EMFA the ones designated by Member States as ‘competent independent regulatory bodies’ to provide respective bodies and the Commission with the information necessary for the application of the AVMSD.

Possible Issues of Enforcement

While the media pluralism test may seem an appealing idea on paper, it is questionable how it would play out in practice. In the EU, control of concentrations generally relies upon an analysis of the effects of the merger on competition on the relevant market. Some countries in Europe have, however, introduced public interest considerations other than consumer welfare effects into their national merger control regimes. Thus, Member States such as Austria or Germany to some extent account for the effects on media pluralism in merger control. For instance, they have different thresholds for capturing media transactions or different turnover calculations. They also have arrangements for cooperation between competition authorities and media regulatory authorities to conduct the concentration’s assessment on media pluralism. Others,such as Poland, however, have no experience in the field, and more than that, exhibit significant skepticism towards it. Consequently, the enforcement of the media pluralism test could differ both in form and even in its binding nature across Member States.

With few aspects of the media pluralism test set in stone in the regulation itself, it seems the majority, from the definition of the key concepts of media pluralism and editorial independence to its quantitative and qualitative dimensions, will be left to the interpretative discretion of Member States. This could lead to a result that runs counter the Commission’s intention to harmonise internal market rules. As the media pluralism test does not even outline its relationship to the distinct competition law assessment, the doors remain open for countries to decide which should be given priority in case of a conflicting result. Let’s say a merger that is neutral to the competition on the market but bad for media pluralism and editorial independence – what happens? As the status quo suggests, it would likely result in a situation whereby competition law and its economic assessment take precedence, no matter what. If that is the case, and it likely is, then what exactly is the point of the regulation and the proposed media pluralism test?

Poland as a Case Study

The immateriality of this proposed provision can be exemplified using a recent controversial media merger from Poland – the PKN Orlen/Polska Press case. The unconditionally cleared merger was publicly criticised as negatively impacting media freedom and pluralism in Poland. In upholding the decision, the Warsaw Competition Court declared that Polish competition law does not allow for taking account of non-economic values, even if it is constitutionally protected as is the case with media pluralism. What is more, it does not matter whether the transaction impacts media pluralism, as it is the consumers who impact the demand on the market which shapes the media pluralism landscape. Besides indicating the Court’s limited knowledge of media economics, in the age of algorithms ruling our exposure to media online, it seems almost ignorant to assume we consume the media we ourselves choose.

Poland has remained particularly skeptical to the inclusion of media pluralism in competition law enforcement, with both the Competition Authority and Competition Court recently disregarding any relevance of the effects on media pluralism of media mergers. In this context, the solution proposed by the EMFA would not be easily introduced, bearing little to no meaning, especially if the hierarchy of ‘tests’ is not clarified by the Commission. The institutional rules required by the proposed media pluralism test could also be a challenge in the case of Poland. The regulatory authority designated under Article 30 AVMSD, the National Broadcasting Council, has undergone several reforms as part of the illiberal government’s attempt to capture public service media and remains far from ‘independent’. Even if structural changes were made, the body has no experience in assessing media market concentrations in whatever shape or form.

Conclusion

All of this renders it likely that the EMFA and its proposed media pluralism test will do little to address the economic threats to media freedom and pluralism. In a best case scenario, for the Member States who need to preserve whatever is left of media pluralism and freedom the most, the proposed media pluralism test changes little to nothing. Given the seriousness of the challenges for media pluralism and freedom in Europe, it is a highly disappointing conclusion.