Case Watch: Italy’s Failed Media Policies under Judicial Scrutiny

In our “Case Watch” series, lawyers of the Open Society Justice Initiative provide quick-hit analysis of recent notable court decisions relating to their work to advance human rights law around the world.

The recent controversy over the Murdoch family’s bid to fully control BSkyB, the British pay-TV network, is one of those cyclical moments that bring questions of media pluralism to the forefront of public debate. The Murdochs have sought permission from the British authorities to obtain a majority stake in the network, a project that has been undermined by the media company’s self-inflicted phone tapping scandal. The current culture secretary, Jeremy Hunt, who approved the BSkyB takeover, is facing resignation calls after disclosures by the Leveson inquiry on his uncomfortably close personal dealings with the Murdochs. The bid, which would for the first time allow a major print media holder to control a major national broadcaster, is now pending before the British telecom regulator Ofcom.

In the meantime, the European Court of Human Rights in Strasbourg decided last week a case that should be of interest to those in charge of diversity policing at Ofcom. The case, Centro Europa 7 v. Italy, involved, if somewhat indirectly, another television mogul: Silvio Berlusconi. While Italy’s former prime minister was not a party to the case, his policies, and his brazen use of public office to preserve the domination of his media empire, were nevertheless on trial.

The Europa 7 case was brought by an Italian company that lawfully obtained a license to set up a national TV network in 1999, but was denied an actual operating frequency by the Italian authorities for almost 10 years (the Open Society Justice Initiative submitted a supporting brief in the case). Europa 7’s misfortune was that their interests clashed with Berlusconi’s: the frequency that Europa 7 was supposed to use was occupied, in open defiance of a judgment by the Italian Constitutional Court, by one of the three channels owned by Mediaset, a Berlusconi family property.

The Italian Court had held in 2002 that controlling three national channels gave Mediaset an impermissible dominating position over the Italian airwaves, and ordered the company to transfer the third over-the-air channel to a satellite-only platform. But being in power at the time, Berlusconi’s government engineered a messy web of legislative interventions that not only allowed Mediaset to keep all three channels (to this day), but also gave it a competitive head start in the race of digitalization.

In its judgment, the Grand Chamber of the Strasbourg Court recalled that under Article 10 of the European Convention on Human Rights, which protects freedom of expression, states have a duty “to ensure true pluralism in the audiovisual sector.” This assumes an obligation to prevent domination of the airwaves by all-powerful actors: “A situation whereby a powerful economic or political group in society is permitted to obtain a position of dominance over the audiovisual media,” which allows them to “eventually curtail the editorial freedom” of broadcasters, is incompatible with the fundamental role of free information in a democratic society.

The state must, in fact, play an active role to preserve diversity of voices and content. To begin with, it must adopt “an appropriate legislative and administrative framework to guarantee effective pluralism.” This, said the Court, is especially important in countries, such as Italy, where control over electronic media is already concentrated in too few hands. Secondly, the government must ensure not just theoretical, but “effective access to the market” for new entrants “so as to guarantee diversity of overall program content.”

The Court found that successive Italian governments had failed to meet these duties. The flawed (and one can add, transparently self-interested) legislative regulations of the last decade had “reduced competition in the sector.” In particular, they had privileged the incumbents (that is, Mediaset and the public channel, Rai), preventing other operators “from participating in the early stages of digital television.” An unfair advantage, whose distorting effects cannot be overstated in the race for market shares in the digital era

In the specific case of Europa 7, the Court found that the aspiring broadcaster had been a victim of the arbitrariness of the Italian legislator and regulators, who kept changing the rules of the game. Finding a violation of the applicant’s free speech and property rights, the Court awarded the Italian government to pay the company 10 million euros in damages. Italian media were quick to point out that this was the latest “gift” by Italian taxpayers to the preservation of Berlusconi’s media empire.

Some observers of the Strasbourg court, including this one, would have liked the Grand Chamber to have gone a bit further. In particular, the court refused to consider whether the treatment of the applicant constituted discrimination under Article 14 of the Convention, and failed to address head-on the glaring conflict of interest that permeated broadcast regulation by successive Berlusconi governments. There was also no significant discussion in the judgment of the need for limits to ownership concentration in broadcasting. That said, the Europa 7 case enriches the Strasbourg Court’s jurisprudence, especially on the relatively novel question of effective access to broadcast markets.

But a further question lingers: Does any of this matter in the era of YouTube?

Digitalization and the development of web-based platforms have weakened the original rationale for regulation of the audiovisual sector, namely the limited spectrum of frequencies available. The policy debates on such questions are heated and ongoing, but Italy provides a real-life example of the ongoing relevance of the principles adopted by the European Court. Despite the technological changes, it still has the most concentrated television market in Europe, and a digitalization process that was seriously skewed from the outset in favor of the incumbent duopoly of Rai and Mediaset.

There are signs that Mediaset’s longstanding dominance of ratings and advertising revenue has been waning somewhat since Berlusconi left office last winter (though remaining still far higher than European averages). The current government led by prime minister Mario Monti has also announced it will auction a new batch of digital frequencies, rather than give them out for free, mostly to Rai and Mediaset, as the former government had planned. Italian civil society groups are also pushing for more transparency in the operations of state-owned Rai and other regulatory agencies.

But the jury is still out on Italian broadcast pluralism. It is less than reassuring that the biggest competitive threat to Mediaset’s position is coming from Sky Italia, another Murdoch holding. Proper, thorough reform of the sector needs to take place. That should be at the top of the reform agenda for the next government in Rome.

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