Judgments nº T-317/04 of Court of First Instance of the European Communities, October 22, 2008

• Resolution Date: October 22, 2008
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-317/04

In Joined Cases T-309/04, T-317/04, T-329/04 and T-336/04,

TV 2/Danmark A/S, established in Odense (Denmark), represented by O. Koktvedgaard and M. Thorninger, lawyers,

applicant in Case T-309/04,

supported by

European Broadcasting Union (EBU), established in Grand-Saconnex (Switzerland), represented by A. Carnelutti, lawyer,

intervener in Case T-309/04,

Kingdom of Denmark, represented by J. Molde, acting as Agent, assisted by P. Biering and K. Lundgaard Hansen, lawyers,

applicant in Case T-317/04,

Viasat Broadcasting UK Ltd, established in West Drayton, Middlesex (United Kingdom), represented by S. Hjelmborg and M. Honoré, lawyers,

applicant in Case T-329/04,

supported by

SBS TV A/S, formerly TV Danmark A/S, established in Skovlunde (Denmark),

and

SBS Danish Television Ltd, formerly Kanal 5 Denmark Ltd, established in Hounslow, Middlesex (United Kingdom),

represented by D. Vandermeersch, K.-U. Karl and H. Peytz, lawyers,

interveners in Case T-329/04,

SBS TV A/S,

SBS Danish Television Ltd,

applicants in Case T-336/04,

supported by

Viasat Broadcasting UK Ltd,

intervener in Case T-336/04,

v

Commission of the European Communities, represented, in Cases T-309/04, T-317/04 and T-329/04, by H. Støvlbæk and M. Niejahr, in Case T-329/04, also by N. Kahn and, in Case T-336/04, by N. Kahn and M. Niejahr, acting as Agents,

defendant in Cases T-309/04, T-317/04, T-329/04 and T-336/04,

supported by

SBS TV A/S,

SBS Danish Television Ltd,

and

Viasat Broadcasting UK Ltd,

interveners in Case T-309/04,

and

Kingdom of Denmark,

TV 2/Danmark A/S,

and

European Broadcasting Union (EBU),

interveners in Cases T-329/04 and T-336/04

APPLICATION, in Cases T-309/04 and T-317/04, for annulment of Commission Decision 2006/217/EC of 19 May 2004 on measures implemented by Denmark for TV 2/Danmark (OJ 2006 L 85, p. 1; corrigendum in OJ 2006 L 368, p. 112) and, in the alternative, of Article 2 of that decision or of paragraphs 3 and 4 of that Article, and, in Cases T-329/04 and T-336/04, for annulment of that decision in so far as it establishes the existence of State aid which is partly compatible with the common market,

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fifth Chamber),

composed of M. Vilaras (Rapporteur), President, E. Martins Ribeiro and K. Jürimäe, Judges,

Registrar: C. Kristensen, Administrator,

having regard to the written procedure and further to the hearing on 7 and 8 November 2007,

gives the following

Judgment

Legal context

1 Article 16 EC provides:

-Without prejudice to Articles 73 [EC], 86 [EC] and 87 [EC], and given the place occupied by services of general economic interest in the shared values of the Union as well as their role in promoting social and territorial cohesion, the Community and the Member States, each within their respective powers and within the scope of application of this Treaty, shall take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions.-

2 Article 86(2) EC provides:

-Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in this Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Community.-

3 Article 87(1) EC provides:

-Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.-

4 Article 311 EC provides:

-The protocols annexed to this Treaty by common accord of the Member States shall form an integral part thereof.-

5 The Protocol on the system of public broadcasting in the Member States (OJ 1997 C 340, p. 109, -the Amsterdam Protocol-), introduced by the Treaty of Amsterdam and annexed to the EC Treaty, provides that:

-[The Member States], considering that the system of public broadcasting in the Member States is directly related to the democratic, social and cultural needs of each society and to the need to preserve media pluralism, have agreed upon the following interpretative provisions, which shall be annexed to the [EC] Treaty:

The provisions of the [EC] Treaty shall be without prejudice to the competence of Member States to provide for the funding of public service broadcasting in so far as such funding is granted to broadcasting organisations for the fulfilment of the public service remit as conferred, defined and organised by each Member State, and in so far as such funding does not affect trading conditions and competition in the Community to an extent which would be contrary to the common interest, while the realisation of the remit of that public service shall be taken into account.-

6 On 15 November 2001, the Commission published a Communication on the application of State aid rules to public service broadcasting (OJ 2001 C 320, p. 5, -the Broadcasting Communication-), in which it set out the principles it would follow in the application of Articles 87 EC and 86(2) EC to State funding of public service broadcasting.

Facts

7 Two public broadcasters operate in Denmark, Danmarks Radio (-DR-) and TV 2/Danmark (-TV2-), the latter having been replaced - for accounting and tax purposes as of 1 January 2003 - by TV 2/Danmark A/S (-TV2 A/S-). DR is almost entirely financed through licence fees. TV2 is financed partly through licence fees, but also through advertising revenue.

8 TV2 was established in 1986, by the lov om ændring af lov om radio- og fjernsynsvirksomhed (Law amending the Law on Broadcasting Services), No 335, of 4 June 1986 (-the 1986 Law establishing TV2-), as an independent autonomous institution. TV2 started broadcasting on 1 October 1988. TV2 broadcasts the terrestrial channel TV2 and in 2000 it also started broadcasting a satellite channel, TV2 Zulu. At the end of 2002 TV2 Zulu - which had until then been a public service channel - became a commercial pay-television channel.

9 Apart from the public broadcasters, two commercial television broadcasters operate on the nationwide television broadcasting market in Denmark: the group comprising SBS TV A/S (-SBS A/S-) and SBS Danish Television Ltd (-SBS Ltd-), on the one hand, and Viasat Broadcasting UK Ltd (-Viasat-), on the other.

10 SBS A/S and SBS Ltd are owned by SBS Broadcasting SA, a Luxembourg company which operates television and radio stations in several Member States.

11 SBS A/S, formerly TV Danmark A/S, has broadcast the commercial television channel TV Danmark 2 via a terrestrial channel since April 1997. Broadcasts by the TV Danmark 2 station in Copenhagen are also sent via satellite to certain cable operators and Danish households equipped with DirectToHome (satellite broadcasting directly to the home (DTH)) throughout the rest of the country.

12 SBS Ltd, formerly Kanal 5 Denmark Ltd, established in 1999 under the name TV Danmark 1 Ltd, which it kept until 2004, has since 1 January 2000 broadcast the commercial television channel Kanal 5 (initially called TV Danmark 1) via satellite from the United Kingdom (UK), under a UK licence.

13 Viasat is part of the Modern Times Group (MTG), a multinational group active in the media sector. Since 1992 Viasat has broadcast the TV3 and TV3+ channels in Denmark via satellite, under an authorisation issued in the UK.

14 SBS A/S and SBS Ltd (together, -SBS-) and Viasat compete with TV2 on the Danish national television advertising market.

15 The Danish rules governing the definition of TV2-s public service were laid down, for the period 1995 to 2002, by successive consolidated versions of the lov om radio- og fjernsynsvirksomhed (Law on Broadcasting Services), No 1065, of 23 December 1992, including version No 578 of 24 June 1994 (-the Broadcasting Law-). TV2-s articles of association set out and explained those rules in detail.

16 By letter of 5 April 2000, SBS sent the Commission a complaint regarding the Kingdom of Denmark-s financing of TV2. A meeting with the complainant was held on 3 May 2000.

17 By letters of 28 February 2001, 3 May 2001 and 11 December 2001, SBS submitted additional information.

18 By letter of 5 June 2002, the Commission requested information from the Danish authorities, which replied by letter of 10 July 2002. Meetings with the Danish authorities were held on 25 October 2002 and 19 November 2002. The Danish authorities sent additional information by letters of 19 November 2002 and 3 December 2002.

19 By letter of 24 January 2003, the Commission informed the Kingdom of Denmark that it had decided to initiate the procedure under Article 88(2) EC concerning Danish State funding of TV2 (-the decision initiating the procedure-).

20 The decision initiating the procedure was published in the Official Journal of the European Union of 14 March 2003 (OJ 2003 C 59, p. 2). The Commission invited interested parties to submit their comments on the measures at issue.

21 The Danish authorities sent the Commission comments by letter of 24 March 2003, as well as additional information by letters of 19 December 2003 and 15 March 2004. The Commission also received comments from several interested parties. SBS submitted its comments by letter of 11 April 2003. The Association of Commercial Television in Europe (ACT) sent comments by letter of 14 April 2003. The commercial broadcasters Antena 3 TV and Gestevisión Telecinco submitted comments on 16 April 2003. Viasat submitted its comments by letter of 14 April 2003. By letter of 4 July 2003, the Commission forwarded those comments to the Kingdom of Denmark, which...