Brussels, 22/01/2003 (Agence Europe) - The Commission has opened a formal investigation into the State financing by Denmark of its public broadcaster TV2. Initial estimations covering the period 1995-2002 suggest that the Danish State overcompensated the net additional cost incurred by TV2 for providing services of general interest. The amount of overcompensation is estimated at € 87.8 million.
Compensation to TV2 for the provision of a wide selection of programmes and services to the Danish population, is considered as a task of general interest and an area in which the State can intervene. In return, TV2 enjoys several financial advantages that commercial television stations do not benefit from (exemption from corporate tax; non-reimbursable and interest-free founding loans; state guarantee for operating loans etc). The Commission has assessed the State compensation by the Danish State in line with the principles of the Commission Communication on the application of state aid rules to public service broadcasting. The Commission's preliminary conclusion after this examination is that the Danish authorities over-compensated the net public service costs of TV2 in carrying out its public service tasks, which could have been making losses. These crossed-subsidies therefore distort competition. The Commission is also keen to know whether the prices TV2 charges for the opportunity to broadcast advertising on its channels would undercut those that a competing and efficient commercial operator would have to charge in order to cover its stand-alone cost. If the answer is affirmative, these advertising activities could also be benefiting from cross- subsidies with public resources.