SPAIN / European Court judges RTVE’s funding to be legal

Following a complaint by Distribuidora de Televisión Digital (DTS) a private satellite television operator, the European Court of Justice (CJEU) has ruled that the way the Spanish public broadcaster, RTVE, is financed conforms to European regulations.

Since the 2009 RTVE Financing Act there has been no advertising on Spanish public television. To compensate for the consequent shortfall of income, the Spanish government at the time introduced a tax on the advertising income of private television companies and telecommunications operators.

Despite the European Commission’s endorsement of this in 2010, DTS considers that taxing the private sector to finance a public broadcaster is incompatible with European rules about State aid. The company appealed first to the EU’s General Court, which dismissed the complaint in 2014, then to the CJEU.

However, like the European Commission and the General Court, the higher court considers that RTVE’s financing system is in fact compatible with the EU’s internal market rules because the money raised by the tax does not go directly to RTVE.

In fact each year the State subsidy to RTVE is calculated on how much the public broadcaster needs to operate and fulfil its obligations, not on how much has been collected via the tax. The CJEU also emphasised that RTVE does not receive all the income generated by this tax: part of it goes into the reserve funds or the Public Treasury.

In 2013 the CJEU declared that a similar tax introduced in France in 2009 was legal – the “Telecoms Tax”, which helps finance France Televisions. Despite being challenged by the European Commission in 2010, it has brought €1.8 billion to the state.

Sources: El Mundo, El Pais, Satellifax, Le Figaro, Formula TV