EUROPEAN COMMISSION

Brussels, 27.7.2022
SEC(2022) 322 final

REGULATORY SCRUTINY BOARD OPINION

European Media Freedom Act

{COM(2022) 457 final}

{SWD(2022) 286 final}
{SWD(2022) 287 final}
 EUROPEAN COMMISSION
Regulatory Scrutiny Board

Brussels,

Opinion

Title: Impact assessment / European Media Freedom Act

Overall 2nd opinion: POSITIVE WITH RESERVATIONS

(A) Policy context

The European Media Freedom Act aims to establish a common framework to improve the
functioning and convergence of the EU media market, including by increasing
transparency, independence and accountability around actions affecting media markets,
media freedom and pluralism. The initiative also aims to set out EU-level coordination
rules for independent and transparent media markets. It is intended to complement the
existing EU framework that promotes transparency of media ownership and recognises
editorial independence of the media.

(B) Summary of findings

The Board appreciates the improvements to the revised report in line with the
Board’s recommendations, notably on the problem definition, the design and content
of options and the analysis of impacts.
However, the report still contains significant shortcomings. The Board gives a
positive opinion with reservations because it expects the DG CNECT to rectify the
following aspects.
(1) The report does not sufficiently exploit the existing evidence to support the
problem definition, in particular the fragmentation of the single media market
and its resulting negative impacts.
(2) The report lacks sufficient clarity on the complementarities between the different
policy options and their design with regard to the problems they seek to tackle.
The analysis of their effectiveness does not provide sufficient clarity as to what
will make them successful.
(3) The analysis of single market and distributional impacts, among different media
services and between Member States, is not sufficiently developed.

1
(C) What to improve
(1) Given the absence of quantitative data to support the scale of the problems related to
media pluralism frameworks in the internal market, the report should exploit to the
maximum, the available evidence. It should expand the presented evidence base by using
the relatively plentiful anecdotal evidence in a more systematic way throughout the
problem analysis, particularly with a view to underpinning and substantiating the single
market angle.
(2) The report should make systematic targeted use of the information included in the
Annex containing an inventory of the varying media pluralism rules across the EU
Member States, to support the argument of market fragmentation, specifically in terms of
the problems these diverging rules pose to its good functioning. It should also more
precisely define the concept of ‘media pluralism’, providing a framework for practical
interpretation and assessment of the desired situation at the EU level and better
substantiating the scale of the problems to be tackled.
(3) The presentation of policy options should be clearer about the complementarities of
options and measures as they increase in legal intensity. The rationale behind the
demarcation between the options should be better explained, taking into account the
streamlined problem definition, which appears to equalise the significance of all problems
while the policy responses vary in ambition. The report should clarify whether some of the
problems are indeed more critical for the functioning of the EU media markets than others
and how this is reflected in the design and choice of the preferred option(s).
(4) The report should more explicitly address the drivers for effectiveness of the different
policy options, explaining in detail how precisely a given measure is expected to be more
effective.
(5) The report should strengthen the single market angle in the analysis of the economic
impacts. The current presentation of cumulated impacts for all Member States, without
much distinction between the specific problems is insufficient. Presentation of the
economic impacts included in the body of the report should be more transparent. The
additional explanation included in the methodological Annex should be streamlined and
clarified, in particular with regard to the application of the quantitative impact scores. The
report should better explain the values assigned to these scores for each policy option and
be more explicit about the uncertainty related to the outputs of deterministic modelling.
(6) The distributional analysis should be further strengthened, in particular with regard to
the impacts on the different market players, which are not sufficiently highlighted. The
report should also establish a better link between the supporting information of the Annex
and the main body of the report to sustain the analysis of all key impacts.

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(D) Conclusion
The DG must revise the report in accordance with the Board’s findings before
launching the interservice consultation.
If there are any changes in the choice or design of the preferred option in the final
version of the report, the DG may need to further adjust the attached quantification
tables to reflect this.

Full title Impact Assessment on European Media Freedom Act

Reference number PLAN/2021/11882

Submitted to RSB on 11 July 2022

Date of RSB meeting Written procedure

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ANNEX: Quantification tables extracted from the draft impact assessment report
The following tables contain information on the costs and benefits of the initiative on which
the Board has given its opinion, as presented above.
If the draft report has been revised in line with the Board’s recommendations, the content of
these tables may be different from those in the final version of the impact assessment report,
as published by the Commission.
Overview of benefits (total for all provisions) of the preferred Options
Measures Who is affected? Who will benefit?
Fostering cross-border activity and investment in the internal media market
Media pluralism Media companies Media companies and investors. Particularly beneficial
measures and media subject to media for non-national media market players: higher legal
market scrutiny pluralism rules, certainty, facilitation of investments across borders
mainly Citizens: richer media offer
broadcasters (and
other companies
that invest in the
media sector)
Member States
(media regulators
and actors taking
measures/decisio
ns)
Increasing regulatory cooperation and convergence in the internal media market
Mechanism for a Audiovisual Mainly media service providers regulated at EU level,
structured companies and namely audiovisual media service providers and video-
cooperation between VSPs sharing platforms: more legal certainty, more
media regulators Media regulators stable/convergent regulatory environment
Media regulators: Improved cooperation in tackling
cross-border challenges for the media sector. Up to
20% in annual cost savings related to cooperation
within ERGA, due to a more efficient cooperation in
the Board and reduced tasks as a result of the creation
of a dedicated secretariat within the Commission.
Relevant authorities in adjacent fields: competition,
telecom and digital regulators, relevant ministries.
Citizens: better enforcement of EU media rules, in
particular online, thus safer online space
Collective action by Third country Media companies: protected from rogue media
the Board media players Audiovisual distributors: less fragmentation of
Media regulators regulatory action, higher level of certainty
Media regulators: more effective restrictive measures
Citizens: safer information space
Mechanism for VLOPs Media companies: wider distribution online, lower risk
monitoring media Media regulators to editorial integrity online
pluralism online Citizens: more diverse media offer, fewer risks to
media freedom/pluralism online, lower level of
disinformation

4
Facilitating free provision of diverse quality media services in the internal market
Media independence Media companies Media companies: benefit from higher trust in their
principles + Journalists services, level playing field - all abide by comparable
recommendations to ethical standards, better possibility to take informed
promote editorial business/investment decisions
independence, self- Journalists: better safeguarded from risks of
regulation and media interference within media outlets, empowered by self-
ownership regulation that safeguards editorial integrity
transparency Citizens: more trustworthy media, higher quality of
media services, possibility to evaluate who stands
behind editorial line (media accountability)
Independence Public service PSM: more independence in management and
safeguards for public media editorial decisions
service media and an (audiovisual + Private media: fairer competition on the market
obligation of balanced radio) Journalists within PSM: lower risks of political pressure
media coverage
Citizens: access to more diverse and independent
quality news and information
Safeguards for the Member States Journalists: protection of their societal mission, lower
integrity of journalists’ (public actors risks of interference in their job across the EU
sources issuing Citizens/entities who provide information to media:
surveillance anonymity, protection from negative consequences
orders) Citizens in general: higher trust in media
Journalists

Ensuring transparent and fair allocation of economic resources in the internal media market
Principles/rules on Audience Audiovisual and press companies: fair competition
transparent, objective measurement with online players when selling ads, better content
and inclusive audience service providers monetisation and potentially higher advertising
measurement (including online income
players) Business (at large): more informed decisions
concerning advertising spending
Media regulators: accurate data for market
assessments
Principles/rules on All (private) Independent media companies: reduced market
transparent/fair media distortion resulting from the misuse of state
allocation of state advertising; media players critical of governments
Member States
advertising could benefit from more state advertising
(authorities/state
-owned entities Citizens: lower risks of dependence of certain media
allocating outlets on state and hence manipulated information
advertising
expenditure to
media)

5
 Overview of costs – Preferred option compared to baseline

Costs for Businesses Costs for Administrations

One-off Recurrent One-off Recurrent
Scrutiny of media market - EUR 44 100 - 96 600
transactions EUR 9.1-13.7
-
Regulatory cooperation and million * EUR 50 000 EUR 1.12 - 3.36
convergence in media markets million
EUR 5.1-10.2
Protection of editorial
million (55% of - -
independence
SMEs)
Safeguards for Public Service EUR 357 300 - EUR 447 000- EUR 42 000
Media 1.7 million
- EUR 0.4-4.2
Transparency of million (55% of
- -
Media ownership media
companies)
Requirements for Audience - - EUR 69 000 - EUR 592 200
Measurement Systems 415 000
- - - EUR 415 000 - 1.6
Monitoring of State advertising
million
- - - EUR 2 - 2.3 million
(8-10 FTEs and EUR
Governance (sub-option A)
1 million operational
budget)

Total EUR 9.4-14 EUR 5.6 – 14.5 EUR 566 000 - EUR 4.2-8 million
million million** 2.16 million

* Costs linked to familiarisation with the new provisions

** The totals may include differences due to rounding.

Costs related to the ‘one in, one out’ approach

Citizens/Consumers Businesses Administrations

One-off Recurrent One-off Recurrent

- - EUR 9.4 – EUR 5.6 -

Direct adjustment costs 14 million 14.5 million

Total Indirect adjustment - - - -

costs
Administrative costs - - - -
(for offsetting)

6
 EUROPEAN COMMISSION

Regulatory Scrutiny Board

Brussels,
Ares(2022)

Opinion
Title: Impact Assessment on European Media Freedom Act

Overall opinion: NEGATIVE

(A) Context
The European Media Freedom Act aims to establish a common framework to improve
the functioning and convergence of the EU media market, including by increasing
transparency, independence and accountability around actions affecting media markets,
media freedom and pluralism.
The initiative also aims to set out EU-level coordination rules for independent and
transparent media markets. It is intended to complement the existing EU framework that
promotes transparency of media ownership and recognises editorial independence of the
media.

(B) Main considerations

The Board acknowledges the additional information provided in advance of the
meeting and commitments to make changes to the report.
However, the Board gives a negative opinion, because the report contains the
following significant shortcomings:
(1) The report does not sufficiently explain the single market failures and
regulatory gaps that the European Media Freedom Act aims to fill. It does not
demonstrate with sufficient evidence the scale and relative importance of the
problems to tackle and their prevalence across different media markets and
Member States. It does not provide clarity on the overall objectives of the
initiative and how they are linked.
(2) The report does not present a convincing intervention logic showing how the
identified measures are expected to deliver on the objectives and tackle the
problems. The presented policy options are not complete and sufficiently
precise as to their content and functioning. The analysis of the choice of the
legal delivery instrument is missing.
(3) The impacts of the policy options are not sufficiently assessed, including on the
internal market aspects. The need for and effectiveness of some measures is
not clearly demonstrated. The report lacks solid comparative analysis of all
costs and benefits and is not sufficiently clear on who will be impacted and
how.
(4) The report is not sufficiently transparent on the differing views between and
within categories of stakeholders’.

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(C) Further considerations and adjustment requirements
(1) The report should be clearer about the magnitude of the problems for the main
affected single media markets and substantiate them with solid and convincing
evidence. As not all problems seem equally critical for all media market actors or
equally relevant across Member States, the report should present a clear problem
overview and on that basis set a clear prioritisation and hierarchy of issues and
reflect it accordingly in the design of policy options. The significance and
evidence of some problems (e.g. lack of media pluralism, cross-border
investments, innovation in the media markets, distortions resulting from opacity
of audience measurement systems, problems related to the media coverage of
European elections) should be further developed.
(2) The report should also identify the precise regulatory gaps that the initiative aims
to fill, better explaining the shortcomings of the existing regulatory measures
applicable to the media markets. It should further develop and substantiate with
clear evidence the problem of fragmentation of the single media markets, and the
resulting effects on the media market players and media pluralism. It should
better explain the different interpretations of regulatory concepts by different
national regulators. The analysis should underpin the choice of Article 114 as
legal base and better support the respect of the subsidiarity principle in view of
the diverse cultural, historical and political traditions of the media frameworks in
the Member States. The report should clarify the definition, practical
interpretation and measurement of the notion of media pluralism.
(3) Given the legal base the report should review the (general) policy objectives and
better explain their linkages as well as the interplay between the objective of
pursuing well-functioning single media markets and its link to promoting and
ensuring media pluralism in the Member States. It should be clearer upfront on
the balance and relative importance of further EU-level coordination versus new
substantive harmonisation measures.
(4) The report should present a fully developed intervention logic by better
presenting how the options and their measures will precisely tackle the identified
problems (and their drivers). It should provide further detail to clarify the design,
content, functioning and rationale of the policy options and their measures. It
should better explain some of the measures, including spelling out the precise
legal obligations and minimum criteria linked to the principle-based design, to
make the practical difference between non-binding recommendations and fully
harmonised specific requirements clearer. It should also consider an explicit
option combining soft and hard law measures better reflecting the scale and
significance of problems and proportionality of some measures. Given the
diversity of existing media regulatory frameworks in the Member States the
report should discuss the pros and cons and choice of the available legal delivery
instruments, at least for the preferred option.
(5) The report should further develop the assessment of impacts, in particular on the
single market. It should better assess the impact and effectiveness of some
measures (e.g. non-binding Board opinions, regulatory sandboxes, etc). It should
also explain in greater detail different impacts associated with the two
governance options. For instance, it should better justify why the Board
governance option involving an external secretariat would be clearly more
effective in fostering quality media content than the one where the secretariat is
provided by the Commission. In case a combination option of soft and hard law
measures is considered its impacts should be assess up-front along with the other
options.

8
 (6) The report should present the overall impact of all measures and further develop
the distributional analysis. It should be clear on the cost and benefit estimates,
add an overview of costs and benefits of all measures and present combined
impacts on businesses (including SMEs), Member States and the Commission. It
should be clear who will be affected and how. Where impacts are different for
the different market players (e.g. online platforms, audio-visual, press,
corporations versus SMEs, etc.), these should be highlighted and the winners and
losers clearly identified.
(7) The report should provide a clearer comparison of options in terms of
effectiveness, efficiency and proportionality and better explain and justify the
qualitative scores. The comparison of options should include the estimates of
costs and benefits of each option and the narrative should be clearer about the
drivers of effectiveness of the various measures as well as their proportionality.
This analysis should be updated to reflect other policy mixes that the report may
consider (see combination option above). The comparison of options tables
should synthetically include both qualitative (e.g. effectiveness scores) and
quantitative elements (e.g. cost estimates).
(8) The report should strengthen the evidence base and single market analysis
throughout, from the problem definition to the design, analysis and comparison
of options. It should also make a better and more targeted use of the evidence
contained in the Rule of Law and Media Pluralism Monitoring reports. In parallel
it should report the stakeholders views in a more transparent and balanced
manner and better distinguish between the views of the different types of media
market players, in particular regarding the problem definition and the design and
expected impact of policy options. Dissenting views (including within the same
category of stakeholders) should be more systematically included as well.
Some more technical comments have been transmitted directly to the author DG.

(D) RSB scrutiny process

The lead DG shall ensure that the report is revised in accordance with the above-
mentioned requirements and resubmitted to the Board for its final opinion.
Full title European Media Freedom Act
Reference number PLAN/2021/11882
Date of RSB meeting 8 June 2022

Electronically signed on 27/07/2022 15:28 (UTC+02) in accordance with Article 11 of Commission Decision (EU) 2021/2121