Tuesday, 12 June 2012

Football is money - A-G Bot's opinion in Case C-283/11 Sky Österreich v Österreichischer Rundfunk

A Dutch football coach once famously stated that 'football is war' (see on this and other thoughts on football-nationalism a nice article by Ian Buruma written at the occasion of the last World Cup). Nowadays, however, it might not be too far-fetched to say that, at least in Europe, 'football is money' would be a more correct description of the state of affairs. Rules and cases on transmission rights attest of the economic interests involved in the broadcasting of football matches, such as the ones of the ongoing European Championship.

Today, Advocate-General Bot delivered his opinion in the case of Sky Österreich v Österreichischer Rundfunk (ORF). The case concerned the transmission rights of several Europa League matches for which Sky had paid licence and production costs. In accordance with the EU Directive on Audiovisual Media Services, the Austrian regulatory authority in the field of communications decided that Sky had to grant ORF the right to transmit short news reports on Europa League matches involving Austrian teams. On the basis of Article 15(6) of the Directive it was established that ORF would only have to pay compensation for the costs of access to the satellite channel, which in this case equalled zero. Sky was of the opinion that this result was unfair, in particular insofar as Article 15(6) would systematically put exclusive right holders at an disadvantage. The dispute then reached the Austrian Federal Communications Tribunal, which raised a preliminary question regarding the compliance of the Directive with fundamental rights, in particular the freedom to conduct a business and the right of ownership (Articles 16 and 17 of the EU Charter of Fundamental Rights (EUCFR) and Article 1 of the First Protocol to the European Convention on Human Rights (ECHR)).

The reference for a preliminary ruling requested the Court of Justice of the European Union (CJEU) to evaluate the conformity with fundamental rights, in this case, the freedom to conduct a business and the right to property, of Article 15(6) of Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive).

A-G Bot considers that: 'It is clear from the case-law of the Court that the right to property, like the right freely to exercise an economic activity, is one of the general principles of law of the Union. However, those principles are not absolute but must be viewed in relation to their social function. Consequently, restrictions may be imposed on use of the right to property, and the right to freely pursue an economic activity, provided that those restrictions correspond to objectives of general interest pursued by the Union and do not constitute, with regard to the objective pursued, a disproportionate and intolerable interference affecting the very substance of the rights thus guaranteed.' (para. 29)

Furthermore: 'Article 52(1) [EUCFR] ... accepts that limitations may be imposed on the exercise of rights such as the right to property and the freedom to conduct a business set out in Articles 17 and 16 of the Charter, as long as the limitations are provided for by law, respect the essence of those rights and freedoms and, in compliance with the principle of proportionality, are necessary and genuinely meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others.' (para. 30)

Article 15(6) of the Directive, in the A-G's opinion poses a limit to the right holders freedom of contract: 'From the perspective of freedom to conduct a business, of which freedom of contract forms part, the immediate consequence of Article 15 is that television broadcasters who hold exclusive transmission rights can no longer decide freely with which bodies they may wish to enter into an agreement for access to short extracts. In other words, they may no longer grant licences to operators of their choice with a view to turning rights to extracts to account.' (para. 35)

It also affects the right to enjoy one's property: 'From the perspective of the right to property, this article has the effect of limiting the use that broadcasters who hold exclusive transmission rights may wish to make of their property.' (para. 36)

And, in the line of 'football is money' reasoning: 'More specifically as to Article 15(6) of the Directive, there is an infringement of the freedom to conduct a business and the right to property inasmuch as, the compensation of the right to short extracts being limited to the additional costs incurred directly by the provision of access, broadcasters who hold exclusive rights to the transmission of an event of high interest to the public can no longer freely decide on the price they charge for access to short extracts. The arrangements for compensation in this provision prevent, in particular, those bodies from having other television broadcasting organisations which wish to use short extracts contribute to the acquisition costs of those exclusive rights. The way those arrangements are structured may also have a negative impact on the commercial value of exclusive rights.' (para. 37, emphasis added)

Are these infringements of fundamental rights justified (cf. Art. 52 EUCFR)?

A-G Bot considers: 'By framing one of the ways in which the right to short extracts may be exercised, namely the compensation payable to the primary broadcaster, Article 15(6) of the Directive pursues the objectives set out in recitals 48 and 55, that is to say, in particular, the freedom to receive information and media pluralism.' (para. 42)

In this light, the analysis then requires the balancing of fundamental rights: 'The reason for the infringement of the rights recognised by Articles 16 and 17 of the Charter having thus been identified, it is now necessary to verify whether the limitation on the rights enshrined by these two articles is proportionate to the legitimate aim pursued. As this aim is primarily the need to protect another fundamental right, namely the freedom to receive information and media pluralism, the review of proportionality which I shall now conduct calls for the weighing of several fundamental rights. The issue is therefore whether, in adopting Article 15(6) of the Directive, the EU legislature achieved a fair balance between the right to property and the freedom to conduct a business, on the one hand, and the freedom to receive information and media pluralism, on the other.' (para. 45, emphasis added)

Taking into account the margin of discretion for fundamental rights protection, the fact that the Directive was not pursuing complete harmonisation and the market-oriented nature of EU law, A-G Bot concludes that 'Article 15(6) of the Directive is able to achieve the aim sought, namely to ensure the freedom to receive information and media pluralism, but also that it does not go beyond what is necessary to achieve this aim.' (para. 53, emphasis added)

In this context, the A-G considers of particular significance the fact that the restriction of fundamental rights is mitigated by conditions and limitations attached to the use of the short reports of football matches (para. 63). Importantly, the right to broadcast these short reports only extends to 'events of high interest to the public' (para. 64). Furthermore, the Member States, in the A-G's opinion, also play a role, since it is for them, 'in the transposition of the Directive, to ensure that they adopt an interpretation of the Directive which allows a fair balance to be struck between the different fundamental rights protected by the legal order of the Union' (para. 68).

Finally, comparing the aims and objectives of the EU, related to the internal market, with the case law of the Austrian and German Constitutional Courts, A-G Bot notes: 'It follows that the weighing of the different fundamental rights at stake does not necessarily call for the same response at national or EU level' (para. 80, emphasis added). Accordingly, the national highest Courts' different views on the matter (holding that a right to extracts of football matches should not be granted free of charge) are dismissed as not having significant bearing on the review of Article 15(6) of the Directive (para. 79). So: 1-0 for EU policy in respect to the Member States' balancing of fundamental rights? Let's see what the CJEU makes of it.

See also the press release on A-G Bot's opinion and, if you like European football, the Euro2012 website.

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