EC to probe German pubcasters

ARD, ZDF accused of misusing public funds

BERLIN — European regulators are looking into claims that German pubcasters ARD and ZDF have illegally used public funds for commercial activities.

Move was instigated by a complaint filed by the German association of commercial broadcasters and telecommunication (VPRT), which as been spearheading a crusade to reduce the TV and radio fees that finance the powerful broadcasters and bar advertising from the channels, which it argues have an unfair advantage over commercial rivals.

The European Commission acknowledged April 24 that the pubcasters had failed to operate separate accounts for commercial and non-commercial operations and as a result, the practice of cross-subsidization at the broadcasters could not be excluded. The Commission accused Germany of failing to introduce an EU law, known as the “transparency directive,” in 2001 that required public companies to operate separate accounts.

Brussels will look to see whether legal action should be taken against Germany for failing to introduce the directive and whether ARD and ZDF violated subsidy rules by illegally cross-subsidizing their commercial activities with public funds.

Responding to the Commission’s decision, Markus Schaechter, head of ZDF, said Friday that ZDF’s online activities fell under the pubcaster’s legal rights. He further blasted the VPRT’s claims as an attempt to compensate for the dire financial state in which commercial broadcasters currently find themselves and accused the org of trying to fundamentally alter the playing field in Germany to the advantage of commercial broadcasters.

“The difficulties of the commercial TV sector that were caused by its own mismanagement are now to be corrected by attacking the public broadcasters,” said Schaechter.

ARD said it expects the Commission will find the complaint “groundless.”

The VPRT added that it would campaign for a ban on advertising on public TV and seek to cut license fees to prevent the competitive gap between pubcasters and commercial channels to grow larger.

The Commission’s decision, which could take months, could affect other European pubcasters involved in commercial operations.

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