The media sector welcomes the political agreement on the DMA proposal as a significant step towards curtailing the market dominance of gatekeeper platforms and restoring competition.

A broad coalition from the European media sector, including public and commercial broadcasters, radios and the press, welcomes the provisional agreement reached yesterday evening on the Digital Markets Act (DMA).

We applaud the institutions for their ambition and commitment to seeing the DMA through, especially within such a tight timeframe. The agreement reached by the co-legislators reflects the political vision required to preserve a diverse, vivid and innovative digital landscape.

We encourage the European Commission, in collaboration with national competition authorities, to support the long-term sustainability of media services that rely on gatekeepers to reach digital audiences. This will, in turn, foster the ability of European consumers and citizens to access services that support the pluralistic flow of information and creative diversity in Europe.

We rely on the European Commission to ensure that the obligations foreseen in the DMA are effectively enforced and abided.

Grégoire Polad, on behalf of the media coalition, said: “The deal that was achieved last evening is a historical step towards ensuring fairness and contestability in digital markets. Targeting the regulation to genuine gatekeepers is the right approach. This is good for business and innovation, but also good for democracy as harmful practices by the gatekeepers will no longer be tolerated, ensuring Europe’s rich and diverse media can flourish on a more equal footing. Fairness should prevail as a guiding principle in the DMA and we welcome the co-legislators’ efforts in this direction. We expect big tech to start complying with the new rules as soon as possible and we encourage the European Commission to proceed on the enforcement phase of the regulation.”

Download the joint statement here.

The Association of European Radios (AER) welcomes the outcome of the trialogue negotiations and the agreement reached by the EU institutions on the Digital Markets Act (DMA).

We welcome the political vision shown by the policy makers and the significant steps taken to tackle unfair conduct by online gatekeepers that harms contestability and fairness in digital markets.

Matt Payton, AER’s Secretary General, said “Europe’s commercial radio sector has been calling upon the Commission and the EU co-legislators to tackle the risks associated with listening platforms in a gatekeeping position, so that listeners can continue to enjoy unfettered access to radio stations of their choice over the long term, free at the point of use.

The agreement on the DMA, with its much-needed ex-ante regulatory approach, provides a unique opportunity for the EU to tackle the growing challenges that digital platforms pose to the radio sector, at a time when these platforms are increasingly taking control of large parts of the digital audio ecosystem. We welcome its adoption”.

Maintaining tight quantitative thresholds, introducing voice assistants and web browsers into the list of core platform services, combined with the do’s and don’ts in articles 5 and 6 (for example, those which relate to self-preferencing, data-hoarding, and Sherlocking), will help to mitigate the growing challenge that virtual assistant platforms in a gatekeeping position pose to radio, and create opportunities for increased digital audio listening and innovation.

Proper implementation and effective enforcement by the European Commission is the next step that needs to be achieved in order to truly ensure fair and open digital markets.

The Association of European Radios (AER) is a Europe-wide trade body representing the interests of over 4,500 commercially-funded radio stations across the EU27 and in Switzerland.

AER is located at:
Association Européenne des Radios
76, av. d’Auderghem,
1040 Brussels,
Belgium

AER’s Interest Representative Register ID Number is 6822083232-32.

AER agrees to the publication of this response to the consultation of the European Commission on the Review of existing legislation on VAT reduced rates.

On October 8th, 2012, the European Commission published a consultation paper on the Review of existing legislation on VAT reduced rates (VAT consultation). AER welcomes this publication.

AER will focus its comments on questions 6 and 9 of this consultation.

The radio sector consists in a myriad of small and medium sized enterprises. Moreover, on-air broadcasting radios reach massive audience on a daily basis in all EU Member States: approximately 80% of the EU population on average listens to radio for at least 2 or 3 hours per day, as shown by national audience measurement. Commercially funded radios indeed constitute a unique network of small and medium-sized enterprises (SMEs), contributing to cultural diversity, media pluralism, access to creativity, social inclusion and disaster relief.

They indeed offer free-to-air services of general interest:
– they evolve in highly competitive environments
– their programmes encompass, broadly speaking, all possible formats, from debates to music-only
– As for the music broadcast, within one market, as soon as there is demand expressed, it has to be fulfilled; so, most of the musical expressions are represented
– most of them are non-politically affiliated, and certainly keep the freedom to express their opinion or to participate to the public expression of the opinions of their listeners
– their audiences are local, regional, or national
– they strive to develop on all possible platforms
– during natural, major or minor disasters, radio is one of the first tool to inform the public

Radio is the most intimate medium, and has been so for the past 50 years at least: it is indeed ubiquitous, mobile, simple-to-use and free-to-air. All these features enable our audience to cultivate a personal relationship with our programmes, our DJs, our hosts, and our brands. Our listeners thereby access programming they enjoy, and useful information .

While radio’s business model in Europe is based, now and for the foreseeable future, mainly on FM broadcasting of free-to-air programmes, digital technology (be it online or broadcast / on-air) is radio’s future. With changing consumption models, radios have to develop their presence on all possible platforms: in order to maintain its audience, radios should be accessible on-air, online, via cable or satellite transmission in a linear and non-linear manner. However, the nature of the platform does not affect the nature of the content / objectives delivered by radio programmes: local programming key for cultural diversity, media pluralism, access to creativity, social inclusion and disaster relief.

The European Commission rightly points in the VAT consultation, that “Similar goods and services should be subject to the same VAT rate and progress in technology should be taken into account in this respect, so that the challenge of convergence between the on-line and the physical environment is addressed” .

AER therefore supports the adoption of similar reduced VAT rate for radio programmes online and on-air.

Regarding more specifically question 6: “Do you agree that those electronic services that would qualify for the reduced rate will have to be precisely defined in a uniform way at an EU level or do you consider that a broad definition in the VAT Directive would be sufficient?”

As mentioned above, European commercial radio is mostly targeted at local, regional or national audiences; language barriers mean that demand is primarily limited to national, and often regional, boundaries. Moreover, in most cases, due to the traditional radio business model, the majority of AER members’ audiences are most likely limited to town and city boundaries. At the same time, by its nature, the internet gives worldwide access. As explained, the current business model for ‘traditional’ radio stations, especially commercially funded stations, does not support worldwide audiences: our programmes – be it news or music, would have little, if any, interest for listeners (or indeed advertisers) located outside a certain territorial range. Therefore, there is currently no significant financial benefit to be heard on a global scale. It follows that there is little imperative to incur the costs and time involved in securing rights for international simulcasting. However, as mentioned above, radios have to develop their presence online to address their listeners’ expectations, but, even then, remain local, regional or national players. Therefore the radio service remains mainly national at the most and radios would not be affected by the modification of the rule establishing the tax rate.

AER therefore believes that radio services do not need a precise and uniform definition at EU level.

Regarding question 9: “Are the definitions laid down in the Audiovisual Media Services Directive sufficiently clear were a reduced VAT rate allowed for on-line radio and television broadcasting?”

The Audiovisual Media Services Directive excludes radio programmes from its scope . Indeed, as mentioned above, radios are local, regional or national actors, and are highly regulated at these levels.

So the definitions set in the Audiovisual Media Services Directive do not apply to radio programmes, as they are unnecessary for the radio sector.

AER believes that Annex III point (8) of the future Directive on the common system of value added tax, should be replaced by the following:

“(8) reception of radio services, including on-demand radio services, and audiovisual media services”

AER remains available to explain this position in further details, should this be helpful to the European Commission.

ENDS
04/01/2013

Contact details: Julia Maier-Hauff
AER Secretary General
76, av. d’Auderghem,
B-1040 Brussels,
Tel: +32 2 736 9131
Fax: +32 2 732 8990
vincent.sneed @ aereurope.org
www.aereurope.org