The European Commission has concluded that a changed regime to support newspapers in Sweden is now in line under EU state aid rules.
In particular, the method for calculating state support to metropolitan newspapers has been fundamentally changed and the aid intensities significantly reduced, while preserving the objective of media pluralism.
“Despite the recent development of online news, traditional newspapers are still important for media pluralism and for the cultural, democratic and public debate in Europe. However, running a newspaper is also a commercial activity and the Commission has a duty to prevent undue distortions of competition and trade resulting from public subsidies. I am convinced that in the present case, we have found a solution that strikes the right balance between these two, equally legitimate, objectives,” said Joaquin Almunia, Commission Vice President in charge of Competition Policy.
The Commission has given its green light to a Swedish aid scheme in favour of newspapers after the government modified it in order to avoid disproportionate distortions of competition with other media that do not benefit from it.
In June 2009, the Commission made suggestions to Sweden, on how the press aid scheme could be brought in line with EU state aid rules. Having assessed Sweden’s subsequent proposals, the Commission found that they adequately reflect the essence of the measures suggested by the Commission. In particular, the reduced aid intensity for metropolitan newspapers will ensure that the aid is proportionate.
In detail, Sweden proposed the following measures.
- Maximum aid level reduced from 63,9 MSEK (in 2009) to 45 MSEK (around 4,8 million) for metropolitan newspapers phased in during a period of five years starting as from 2011.
- New method of calculating aid for large metropolitan newspapers: In addition to the provincial aid, extra aid can only be granted to cover up to 40% of the additional costs deriving from the specific situation in the metropolitan newspaper markets (e.g. extra editorial costs and Sunday publishing).
- Support ceilings fixed at max 40% of total operating costs for high and medium frequency newspapers and at 75% for low-frequency newspapers.
- Reporting obligation for the beneficiaries, to enable the granting authority, the Press Subsidies Council (Presstödsnämnden), to verify the use of the aid and establish annual accounts to be submitted to the Commission.
- The measures, contained in the Press Subsidies Ordinance (Presstödsförordningen 1990:524), are to be in force from 1 January 2011 until 31 December 2016. A review process will be launched in time for any necessary changes to enter into force on 1 January 2017.
The Swedish press aid scheme has been in place since 1971, before Sweden’s accession to the EU and constitutes therefore so-called “existing aid”, which is assessed under different rules in EU state aid investigations. The scheme allows, among others, to support the production of subscription newspapers that fulfil a number of criteria, with the aim of contributing to media pluralism. Such aid can be compatible with the Single Market if it pursues a goal of common interest, is proportionate and does not give beneficiaries an undue advantage over their competitors. While not calling into question the objective of media pluralism pursued by Sweden, the Commission had found that the press aid scheme did not meet the proportionality test and initiated the procedure for bringing existing aid in line with EU rules. It had received complaints against the scheme.
