The European Court of Justice has upheld a previous General Court ruling which had confirmed a 2005 decision finding that German support to private broadcasters for the switchover to digital television contained illegal subsidies.
The Court confirmed support can only be granted in full respect of the principle of technology neutrality. Exceptions are only possible if the member state proves that there are structural competition problems from the existing offers of other platforms.
The ruling is important for all member states currently organising or finalising the switchover to digital TV, which will enable Europeans to enjoy new services and profit from enhanced competition for high quality TV.
The ECJ ruled that the German support for the costs incurred by private broadcasters due to the switchover from analogue to digital television on the terrestrial platform constituted illegal State aid. The Court found that such State aid can only be granted if the member state proves that it is a necessary and proportionate instrument to correct a market failure. Germany has failed to demonstrate that as the broadcasters had already agreed to the switchover before state aid was envisaged.
The Court further dismissed Germany’s argument that the principle of technology neutrality should not play a role in its state aid analysis. The Court found that this was a general principle enshrined in the Commission’s communication of 2003 on the digital switchover and does not allow that state support discriminates between different platforms.
State support given exclusively to a terrestrial platform infringes this principle, unless the member state documents that there are structural competition problems from the existing offers from other platforms. Germany did not demonstrate that its State aid was aimed at correcting such problem.
On November 9, 2005 the Commission found German state support for the switchover costs of private broadcasters to digital television in Berlin Brandenburg incompatible with EU state aid rules and ordered the recovery of the illegal aid i.a. from the beneficiaries RTL, ProsiebenSat.1 and FAB.
Earlier this year, in the Mediaset judgment regarding the Italian subsidies for digital terrestrial decoders the Court of Justice similarly found that a support measure that favours one technology over another equally capable of achieving the public interest objective is incompatible with EU state aid rules.
