Brussels, 12/03/2009 (Agence Europe) - In a decision made on Wednesday 11 March in a court case pitting Télévision française 1 SA (TF1) against the European Commission, the Court of First Instance ruled that the Commission's decision of 2005 that the French audiovisual licence fee system constitutes state aid compatible with the common market is valid. According to the Court, the Commission had not committed an error of judgement when it decided that the commitments by France to ensure respect of competition conditions corresponded to the measures it had previously formulated. TF1's appeal was subsequently rejected. The French operator can lodge an appeal within two months of notification, with regard to the legal issues in question, at the European Court of Justice.
On 10 March 1993, the Commission received a complaint from the commercial broadcaster Télévision Française 1 SA ('TF1'), in which TF1 submitted, inter alia, that the repayment of the audiovisual licence fee by France to the public television channels France 2 and France 3 constituted state aid incompatible with the common market. On 10 December 2003, the Commission indicated to the French government that changes to the audiovisual licence fee system had to be made in order to ensure its compatibility with the Community rules applicable to state aid, and sent the government a recommendation proposing the adoption of appropriate measures. That recommendation proposed that a certain number of requirements should be introduced concerning, essentially, the proportionality of the compensation payable by the state as compared with the cost of the public service and the performance by the public service broadcasters of their commercial activities under market conditions. By decision of 20 April 2005 the Commission found that the commitments made by France satisfied its recommendations. It decided to close the procedure but stated that that decision did not prejudice its power to keep under constant review all existing systems of aid provided for by the Treaty. TF1, however, challenges that analysis. It brought an action before the Court of First Instance seeking annulment of the Commission's decision.
In its decision made on Wednesday, the Court states that the issue of the classification of a measure as state aid must be clearly distinguished from the issue of the assessment of the compatibility of that aid with the common market. On this first point and in reference to the Altmark judgement of 24 July 2003, which explains the criteria for state aid eligibility, the Court pointed out that the Commission had not committed an error of law in applying the “Altmark conditions”. On the second point, it pointed out that France had responded to the Commission's concerns on the over-compensation of the net public service costs. France has made a commitment that the financial resources that it proposes to allocate to France Télévision are to cover only the cost of performance of the public service obligations, that any profits are to be reinvested in full in the activities of the public channels, and are to be taken into account in drawing up the budget for the following financial year. The Court also pointed out that the French authorities will include in the relevant national rules, in the next two years, the principle that there is to be no over-compensation in respect of public service costs. France has undertaken to organise an annual review, by an independent audit body whose report is to be sent to the Parliament, of compliance by the public channels with their duty to carry on their commercial activities under market conditions.
The Court therefore finds that those commitments correspond exactly to the Commission's recommendations and that those recommendations were not incorrect. Consequently, the Commission was correct to hold that the licence fee system was compatible with the common market. Furthermore, since the Commission did not fail to fulfil its obligation to give a statement of reasons and complied with the procedure for the examination of aid, the Court confirms that the Commission's decision is well founded. Accordingly, the action brought by TF1 is dismissed. (O.L./transl.rh)