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State support is said to be not in line with the EC
During Monday’s press conference, Arnas Marcinkus, head of the Internet Media Association, and Karolis Kačerauskas, partner at Ellex Valiūnas, partner representing applicants in the EC-initiated case, presented their address to the EC.
“The current funding allocated by Seimas to Lithuanian radio and television does not meet the strict state aid requirements established by the European Commission. Therefore, a complaint was sent seeking clarity, acceptable common rules for all and fair competition in the already narrow and shallow media market, “said A. Marcinkus.
Photo by Julius Kalinskas / 15min / Arnas Marcinkus
According to him, the complaint does not mean that the plaintiffs seek to change the financing principle of the public broadcaster, that is, that the LRT is automatically financed from the state budget, at the expense of taxpayers.
“There simply has to be clarity and it must be agreed with the European Commission, and only then can it be legitimate,” Marcinkus explained.
K. Kačerauskas stated that since 2015 possible illegal aid has been granted to LRT and, according to him, the amount of illegal state aid is 227 million. euros
This state aid, for purely technical reasons, must be returned to the state budget.
“The funding provided to LRT since 2015 corresponds to all characteristics of state aid. Accordingly, it is only allowed with the separate permission of the European Commission. No such permission was obtained. This means that this state aid, exclusively for reasons techniques, it must be returned to the state budget, ”said K. Kačerauskas.
A. Marcinkus seconded K. Kačerauskas, declaring that the funds must be recovered from the LRT. Admittedly, this is not the sole purpose of applicants.
Ensures that the market is distorted
“Our goal is not just to get this money illegally assigned to the state.” We want a certain balance between the public service of broadcasting and the independent media, “said a spokesman for the portals.
According to him, the current model of the public radio station has shortcomings: the mission is not sufficiently defined, its fulfillment is subjective and the way in which the mission is carried out is supervised by the LRT Council, which, according to K. Kačerauskas , operates in an “obvious conflict of interest situation”.
Julius Kalinskas photo / 15min / Karolis Kačerauskas
“The LRT Council is one of the two members of the administrative body. And the LRT Board is directly or indirectly responsible for LRT’s financial and operating results. In other words, his goal and interest are related to the growth of LRT ratings, good financial health, and the like, the attorney explained.
“At the same time, you may have to decide that someone is really out of the mission, but if you increase visibility, perhaps improve performance, your decision will be affected by a conflict of interest.”
K. Kačerauskas noted that the law defining LRT activities now “contains neither an allocation nor an obligation to develop an Internet media portal”, but the LRT directs state funds for this purpose.
“Even the existing control system, which is clearly affected by conflicts of interest, did not control this part, so as not to go where it is outside the mission,” said the lawyer.
According to him, in allocating funds to the LRT, Lithuania did not ensure that content published on the Internet by the public broadcaster did not compete with content offered by commercial market participants.
Why are applicants applying to the EC only now, despite the fact that illegal state support, they say, has existed since 2015?
“The process of preparing a complaint is not that simple. Naturally, it was necessary to analyze the experience and practices of other countries, as well as how other countries have organized and coordinated their financing with the EC, “replied A. Marcinkus.
He stated that the complaint to the EC was not addressed to the media and that it did not divide it.
According to A. Marcinkaus, the media is divided by the government “by making illegal decisions and by the LRT itself, which sets the goal not only of carrying out the mission, but also of competing with the independent media.”
The complaint, he said, seeks to end fragmentation “because it is detrimental to the public interest and threatens the state.”
This is in no way a complaint against LRT. This is a complaint against the Lithuanian state, which made the correct decision but did not complete it.
“This appeal is addressed to the decision makers who made the decision; I mean, the Seimas approved the law and did not coordinate it with the European Commission.” This is in no way a complaint against LRT. This is a complaint against the Lithuanian state, which made the correct decision, but did not complete it, ”taught A. Marcinkus.
When asked if the complaint had been addressed to Seimas but had not been approved by the EC, the applicants indicated that they had not.
“This issue must, first of all, be coordinated with the European Commission,” explained Marcinkus.
Lawyer K. Kačerauskas added that a new version of the LRT will take effect on January 1. Supposedly it provides the opportunity to operate on the Internet, news segment, but it is not an obligation. And that, according to the lawyer, is also a problem.
Many European countries have already had to change their financing model.
The IEA press release states that the independent media are concerned not only about unfair and infringing conditions of competition, but also about the model of the national station itself, which is not in line with the EC and jurisprudence.
Almost € 77 million has been recovered from the Dutch public service broadcasting for similar state aid. financing in euros.
“We fully agree that public broadcasting organizations can receive funds from the state budget. However, there are certain rules in Europe on how this should be done. In Europe, it is about the public broadcasting service having to lead to performs a certain mission, the performance and costs of which must be controlled by independent bodies, and the LRT does not have that control and decides to what extent it competes with the participants in the commercial market. The only control mechanism of the LRT is the LRT Council, but it operates in a clear conflict of interest and cannot implement effective control.
A negative example is the online news portal developed by LRT. To date, there is no obligation or mandate in the LRT to carry out such activities. However, LRT unilaterally decided to invest the state funds allocated to it in this segment by offering content that does not differ from that offered by commercial market participants. In this way, state financing distorts the already competitive market and gradually pushes commercial market participants out of it, ”says A. Marcinkus on the reasons for the complaint.
The complaint is promised to be recorded in the EC’s records within the next week, and the commission should decide to start a formal investigation against Lithuania within a few months.
The EC has already taken around 40 decisions to harmonize state aid for public broadcasting organizations in Europe and to adjust the law governing such aid.
“Almost € 77 million has been recovered from the Dutch public service broadcasting by illegal state aid by analogy. Funding in euros. Funding models for national broadcasters in France, Spain and Italy, as well as in many other countries, they have been modified at the request of the European Commission, “the association said in a statement.
LRT chief: complaint seeks to reduce funding
In response to the complaint to the EC, LRT Director General M. Garbačiauskaitė-Budrienė stated that the commercial media with the complaint seeks to reduce funding for the public broadcaster and limit the portal, although it does not create competition for income for commercial media.
“The purpose of the commercial media complaint is to limit the portal and reduce funding for the LRT. Unlike commercial media, one of the main goals of the ratings, LRT primarily seeks to reflect the diversity of opinions, provide reliable information and of high quality to all groups in society, “says M. Garbačiauskaitė-Budrienė in a comment to BNS.
Photo by Julius Kalinskas / 15min / Monika Garbačiauskaitė-Budrienė
In it, he declared that, according to the Constitution, “a public service station, in view of its special constitutional mission, is not established to occupy the market, which makes it fundamentally different from private commercial stations.”
“In order to successfully implement our mission, the accessibility of its content is important to LRT, that is why we have paid so much attention in recent years to the development of a news portal where we integrate the content of LRT radio and television programs” . It is important that LRT reaches out to all groups in society, including youth, for whom the online media is often the only source of news, “taught the LRT chief.
To successfully implement its mission, the accessibility of its content is important to LRT, that is why we have paid so much attention in recent years in the development of the news portal.
It also takes the position that the LRT portal “does not compete for commercial media revenue” because it rejects commercial advertising.
“With the increasing fragmentation of information channels and the proliferation of liars, consumers have the right to accurate, impartial and reliable information, and the role of the LRT is very important here. The audience is entitled to meaningful content without clicking,” he says. M. Garbačiauskaitė-Budrienė in the comment sent to BNS.
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