EU orders probe into ARD-ZDF

Critics argue pubcasters of illicitly using license fees

BERLIN — German pubcasters ARD and ZDF are preparing for a showdown with European Union watchdogs eager to rectify what they see as an unfair advantage over commercial rivals.

Philip Lowe, the EU Commission’s director general of competition, has set his sights on the deep-pocketed pubcasters, saying license fees are a state subsidy that gives them an edge over commercial rivals RTL and ProSiebenSat 1.

License fees will increase by $1.18 to $22.85 a month beginning in April, giving the pubcasters more than $9.3 billion combined in annual income plus revenues from selling commercial airtime.

As part of the probe, the Commission is examining the significance of license-fee funding in ARD’s acquisition last year of national Bundesliga soccer rights. ARD outbid ProSiebenSat 1 and is paying E65 million ($87 million) per season.

Critics argue the pubcasters have a greater duty to air educational, cultural and news programming than spend millions on sports.

They also accuse the pubcasters of illicitly using license fees to finance commercial Internet operations.

EU regulators are looking at the pubcasters’ online activities, including games, chat rooms and commercial links, and their affect on the market.

The probe was prompted by a complaint filed last year by Germany’s association of commercial broadcasters and telecommunication (VPRT), which wants to bar advertising from pubcasters and cut license fees in an effort to level the playing field.

The commission is expected to set guidelines early next year on what ARD and ZDF can and cannot do.

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