GRAND
CHAMBER
CASE OF CENTRO EUROPA 7 S.R.L. AND DI STEFANO v. ITALY
(Application
no. 38433/09)
JUDGMENT
STRASBOURG
7 June
2012
In the case of Centro Europa 7
S.r.l. and Di Stefano v. Italy,
The
European Court of Human Rights, sitting as a Grand Chamber composed
of:
Françoise Tulkens,
President,
Jean-Paul Costa,
Josep
Casadevall,
Nina Vajić,
Dean
Spielmann,
Corneliu Bîrsan,
Elisabeth
Steiner,
Elisabet Fura,
Ljiljana
Mijović,
David Thór Björgvinsson,
Dragoljub
Popović,
András Sajó,
Nona
Tsotsoria,
Işıl Karakaş,
Kristina
Pardalos,
Guido Raimondi,
Linos-Alexandre
Sicilianos, judges,
and Vincent Berger, Jurisconsult,
Having
deliberated in private on 12 October 2011 and 11 April 2012,
Delivers
the following judgment, which was adopted on the last mentioned
date:
PROCEDURE
The
case originated in an application (no. 38433/09) against the Italian
Republic lodged with the Court under Article 34 of the Convention for
the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by an Italian limited liability company, Centro
Europa 7 S.r.l., and an Italian national, Mr Francescantonio Di
Stefano (“the applicants”), on 16 July 2009.
The
applicants were represented by Mr A. Pace, Mr R. Mastroianni, Mr O.
Grandinetti and Mr F. Ferraro, lawyers practising in Rome. The
Italian Government (“the Government”) were represented by
their Agent, Ms E. Spatafora.
The
applicants alleged that the failure to allocate the applicant company
the necessary frequencies for television broadcasting had infringed
their right to freedom of expression, and especially their freedom to
impart information and ideas. They also complained of a violation of
Article 14 and Article 6 § 1 of the Convention and Article 1 of
Protocol No. 1.
The
application was allocated to the Second Section of the Court (Rule 52
§ 1 of the Rules of Court). On 10 November 2009 the Second
Section decided to give notice of the application to the Government.
As provided for by former Article 29 § 3 of the Convention
(current Article 29 § 1) and Rule 54A, it decided to examine the
merits of the application at the same time as its admissibility. On
30 November 2010 a Chamber of that Section, composed of Françoise
Tulkens, Danute Jočienė, Dragoljub Popović, András
Sajó, Nona Tsotsoria, Kristina Pardalos, Guido Raimondi,
judges, and Françoise Elens-Passos, Deputy Section Registrar,
relinquished jurisdiction in favour of the Grand Chamber, none of the
parties having objected to relinquishment (Article 30 of the
Convention and Rule 72).
The
composition of the Grand Chamber was determined in accordance with
the provisions of Article 26 §§ 4 and 5 of the Convention
and Rule 24. On 3 November 2011 Jean-Paul Costa’s term as
President of the Court came to an end. Françoise Tulkens took
over the presidency of the Grand Chamber in the present case from
that date (Rule 9 § 2). Jean-Paul Costa continued to sit
following the expiry of his term of office, in accordance with
Article 23 § 3 of the Convention and Rule 24 § 4.
The
applicants and the Government each filed further observations (Rule
59 § 1). In addition, third-party comments were received from
the association Open Society Justice Initiative, which had been given
leave by the President to intervene in the written procedure (Article
36 § 2 of the Convention and Rule 44 § 2).
A
hearing took place in public in the Human Rights Building,
Strasbourg, on 12 October 2011 (Rule 59 § 3).
There appeared before the Court:
(a) for the Government
Mr M.
Remus, Adviser,
Mr P. Gentili, State Counsel;
(b) for the applicants
Mr R. Mastroianni,
Mr O.
Grandinetti,
Mr F. Ferraro, Counsel.
The
Court heard addresses by Mr Remus, Mr Gentili, Mr Mastroianni and Mr
Grandinetti, and also their replies to questions put by its members.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
The
first applicant, Centro Europa 7 S.r.l. (“the applicant
company”), is a limited liability company operating in the
television broadcasting sector, with its registered office in Rome.
The second applicant, Mr Francescantonio Di Stefano, is an
Italian national who was born in 1953 and lives in Rome. He is the
statutory representative of the applicant company.
By
a ministerial decree of 28 July 1999 the appropriate authorities
granted Centro Europa 7 S.r.l. a licence for nationwide terrestrial
television broadcasting in accordance with Law no. 249/1997 (see
paragraphs 56-61 below), authorising it to install and operate an
analogue television network. The licence specified that the applicant
company was entitled to three frequencies covering 80% of national
territory. As regards the allocation of the frequencies, the licence
referred to the national frequency allocation plan, adopted on
30 October 1998. It indicated that the installations should be
brought into line with the requirements of the “assignment
plan” (piano di assegnazione) within twenty-four months
and that the measures taken to that end should conform to the
adjustment programme (programma di adeguamento) drawn up by
the Communications Regulatory Authority (Autorità per le
garanzie nelle comunicazioni – hereinafter “AGCOM”)
in conjunction with the Ministry of Communications (“the
Ministry”). It appears from the Consiglio di Stato’s
judgment no. 2624 of 31 May 2008 (see paragraph 14 below) that, under
the terms of the licence, the allocation of frequencies was deferred
until such time as the authorities had adopted the adjustment
programme, on the basis of which the applicant company should have
upgraded its own installations. The adjustment programme should, in
turn, have taken into account the requirements of the national
frequency allocation plan. However, the plan was not
implemented. A succession of transitional schemes that benefited
existing channels were applied at national level, with the result
that even though it had a licence, the applicant company was unable
to broadcast until June 2009 as it had not been allocated any
frequencies.
The
applicant company, through its statutory representative, made a
number of applications to the administrative courts.
A. First set of administrative proceedings
In
November 1999 the applicant company served formal notice on the
Ministry to allocate frequencies to it. In a note of 22 December
1999 the Ministry refused its request.
1. Proceedings on the merits
In
2000 the applicant company lodged an application with the Lazio
Regional Administrative Court against the Ministry and RTI (a network
of Italian television channels controlled by the Mediaset group),
complaining that the authorities had not allocated it any
broadcasting frequencies. The application was also directed against
RTI because the Retequattro channel had been authorised to broadcast
on frequencies that should have been transferred to the applicant
company.
On
16 September 2004 the Regional Administrative Court found in favour
of the applicant company, holding that the authorities were required
either to allocate the frequencies or to revoke the licence.
Accordingly, it declared the note of 22 December 1999 void.
RTI
appealed to the Consiglio di Stato. In judgment no. 2624 of
31 May 2008 the Consiglio di Stato dismissed the appeal
and upheld the Regional Administrative Court’s judgment.
It noted that no deadline had been set in the licence
for the authorities to adopt the adjustment programme drawn up by
AGCOM in conjunction with the Ministry, but that the applicant
company had been given twenty-four months to make improvements to its
installations. Accordingly, the Consiglio di Stato found that
the adjustment programme should have been approved promptly.
The
Consiglio di Stato added that the Ministry had to give a
decision on the applicant company’s request to be allocated
frequencies, in accordance with a judgment delivered in the meantime
by the Court of Justice of the European Union
(“the CJEU” – see paragraphs 33-36 below).
2. Enforcement proceedings
On
23 October 2008 the applicant company, having still not obtained the
frequencies, brought proceedings against the Ministry in the
Consiglio di Stato, complaining that the judgment of 31 May
2008 had not been executed.
On
11 December 2008 the Ministry extended the validity of the licence
granted in 1999 until the analogue switch-off date and allocated
Centro Europa 7 S.r.l. a single channel with effect from 30 June
2009.
The
Consiglio di Stato consequently held in judgment no. 243/09 of
20 January 2009 that the Ministry had properly executed its judgment
of 31 May 2008.
On
18 February 2009 the applicant company brought a further application
in the Regional Administrative Court, arguing that the decree of 11
December 2008 by which the frequencies had been allocated was
insufficient in that, contrary to the terms of the licence, it
concerned a single channel that did not cover 80% of national
territory. In its application the company sought the annulment of the
decree and an award of damages.
On
9 February 2010 the applicant company signed an agreement with the
Ministry of Economic Development (the former Ministry of
Communications), which undertook to assign it additional frequencies
in accordance with the terms of the licence.
On
11 February 2010, pursuant to one of the clauses of that agreement,
the applicant company asked for the proceedings pending before the
Regional Administrative Court to be struck out.
On
8 March 2011 the applicant company applied to the Regional
Administrative Court to restore the case to its list. It sought the
annulment of the decree of 11 December 2008 by which the frequencies
had been allocated, and an award of damages. It argued that the
administrative authorities had not complied fully with its obligation
to allocate additional frequencies and had failed to observe the
agreement of 9 February 2010 and the decision of 11 December
2008.
Paragraph
6 of the agreement in question stated:
“Centro Europa 7 S.r.l. undertakes to request, by
11 February 2010, the striking out of application no. 1313/09 pending
before the Lazio Regional Administrative Court, to allow it to lapse
for failure to submit a fresh application to schedule a hearing
within the statutory time-limit and, by the same date, to waive the
claims for compensation brought in that application, provided that,
by the date on which the case lapses, this agreement, the decision
allocating the additional frequencies and the decision of 11 December
2008 have not in the meantime become invalid.
The Administration, for its part, undertakes to comply
fully with its obligation to allocate additional frequencies, and
with this agreement and the decision of 11 December 2008. Should
it fail to do so, Centro Europa 7 and the opposing authorities shall
regain full possession of their respective procedural prerogatives.
In the event that the assignment of the additional frequencies
becomes invalid, it is specified that Centro Europa 7 S.r.l. may
reactivate application no. 1313/09 only if it would be impossible in
this situation for Europa Way S.r.l. to operate one or more of the
installations mentioned in Technical Attachment A.”
The
proceedings are currently pending before the Regional Administrative
Court.
B. Second set of administrative proceedings
1. Proceedings before the Regional Administrative Court
In
the meantime, on 27 November 2003, while its initial application was
still pending before the Regional Administrative Court, the applicant
company had lodged a further application with the same court, seeking
in particular an acknowledgment of its entitlement to have the
frequencies allocated and compensation for the damage sustained.
In
a judgment of 16 September 2004 the Regional Administrative Court
dismissed the application, holding in particular that the applicant
company had only a legitimate interest (interesse legittimo),
that is, an individual position indirectly protected as far as was
consistent with the public interest, and not a personal right
(diritto soggettivo) to be allocated frequencies for analogue
terrestrial television broadcasting.
2. Appeal to the
Consiglio
di Stato
The
applicant company appealed to the Consiglio di Stato, arguing
that since it had been granted a licence by the appropriate
authorities, it did in fact have a personal right. In particular, it
contended that Legislative Decree no. 352/2003 and Law no. 112/2004
did not comply with Community legislation (see paragraphs 65-67
below).
On
19 April 2005 the Consiglio di Stato decided to restrict its
examination to the applicant company’s claim for damages and
not to rule at that stage on the request for allocation of
frequencies.
It
nevertheless observed that the failure to allocate frequencies to
Centro Europa 7 S.r.l. had been due to essentially legislative
factors.
It
noted that section 3(2) of Law no. 249/1997 (see paragraph 58 below)
enabled the “de facto occupants” of radio
frequencies authorised to operate under the previous system to
continue broadcasting until new licences were awarded or applications
for new licences were rejected, and in any event not after 30 April
1998.
It
further noted that section 3(7) of Law no. 249/1997 (see paragrapho61
below) authorised the continuation of such broadcasts by entrusting
AGCOM with the task of setting a deadline, on the sole condition that
programmes were to be broadcast simultaneously on terrestrial
frequencies and by satellite or cable. It pointed out that in the
event of failure by AGCOM to set a deadline, the Constitutional Court
had set 31 December 2003 as the date by which programmes broadcast by
the “over-quota channels” (that is, existing national
television channels exceeding the concentration restrictions imposed
by section 2(6) of Law no. 249/1997) were to be broadcast by
satellite or cable only, with the result that the frequencies to be
allocated to licence holders such as the applicant company would have
been freed up. The Consiglio di Stato observed, however, that
the deadline had not been complied with following the intervention of
the national legislature: section 1 of Legislative Decree no.
352/2003, which had subsequently become Law no. 43 of 24 February
2004 (see paragrapho65 below), had prolonged the
activities of the over-quota channels pending the completion of an
AGCOM investigation into the development of digital television
channels. It added that section 23(5) of Law no. 112/2004 (see
paragraph 67 below) had subsequently, by a general authorisation
mechanism, extended the possibility for over-quota channels to
continue broadcasting on terrestrial frequencies until the national
frequency allocation plan for digital television was implemented,
with the result that those channels had not been required to free up
the frequencies intended for allocation to licence holders, such as
the applicant company.
Law
no. 112/2004 had therefore had the effect, according to the Consiglio
di Stato, of blocking the frequencies intended for allocation to
holders of analogue licences and of preventing new operators from
participating in digital television trials.
That
being so, the Consiglio di Stato decided to stay the
proceedings and requested the CJEU to give a preliminary ruling on
the interpretation of the provisions of the Treaty on freedom to
provide services and competition, Directive 2002/21/EC (“the
Framework Directive”), Directive 2002/20/EC (“the
Authorisation Directive”), Directive 2002/77/EC (“the
Competition Directive”) and Article 10 of the European
Convention on Human Rights, in so far as Article 6 of the Treaty on
European Union referred to it.
3. Judgment of the CJEU
On
31 January 2008 the CJEU gave judgment. It declared two questions
inadmissible, holding that it did not have sufficient information to
give a ruling on them.
With
regard to the question concerning Article 10 of the Convention, the
CJEU concluded as follows:
“By its first question, the national court asks
the Court, essentially, to state whether the provisions of Article 10
of the ECHR, in so far as Article 6 EU refers thereto, preclude, in
television broadcasting matters, national legislation the application
of which makes it impossible for an operator holding rights, such as
Centro Europa 7, to broadcast without the grant of broadcasting radio
frequencies.
...
By those questions, the national court is thus seeking
to determine whether there are infringements of Community law for the
purpose of ruling on an application for compensation for the losses
flowing from such infringements.
... Article 49 EC and, from the date on which they
became applicable, Article 9(1) of the Framework Directive, Article
5(1), the second subparagraph of Article 5(2) and Article 7(3) of the
Authorisation Directive and Article 4 of the Competition Directive
must be interpreted as precluding, in television broadcasting
matters, national legislation the application of which makes it
impossible for an operator holding rights to broadcast in the absence
of broadcasting radio frequencies granted on the basis of objective,
transparent, non-discriminatory and proportionate criteria.
That answer, by itself, thus enables the national court
to rule on the application made by Centro Europa 7 for compensation
for the losses suffered.
Consequently, regard being had to the Court’s
answer to the second, fourth and fifth questions, it is not necessary
to rule on the first and third questions.”
As
to the merits, the CJEU observed that the existing channels had been
authorised to pursue their broadcasting activities as a result of a
series of measures by the national legislature, to the detriment of
new broadcasters which nevertheless held licences for terrestrial
television broadcasting. It noted that these measures had entailed
the successive application of transitional arrangements structured in
favour of the incumbent networks, and that this had had the effect of
preventing operators without broadcasting frequencies, such as the
applicant company, from accessing the television broadcasting market
even though they had a licence (granted, in the applicant company’s
case, in 1999). The CJEU held:
“... Law no. 112/2004 ... does not merely allocate
to the incumbent operators a priority right to obtain radio
frequencies, but reserves them that right exclusively, without
restricting in time the privileged position assigned to those
operators and without providing for any obligation to relinquish the
radio frequencies in breach of the threshold after the transfer to
digital television broadcasting.”
The
CJEU added that the application of the transitional schemes was not
in accordance with the new common regulatory framework (NCRF), which
implemented provisions of the Treaty, in particular those on freedom
to provide services in the area of electronic communications networks
and services. It observed in that connection that several provisions
of the NCRF stated that the allocation and assignment of frequencies
had to be based on objective, transparent, non-discriminatory and
proportionate criteria. In the CJEU’s view, such criteria had
not been applied in the present case since the status of the existing
channels had not been amended under the transitional schemes and they
had continued their broadcasting activities to the detriment of
operators such as the applicant company, which, not having been
allocated any broadcasting frequencies, had been unable to exercise
their rights and make use of their licence.
The
CJEU therefore reached the following conclusions:
“... it must be stated that, in the area of
television broadcasting, freedom to provide services, as enshrined in
Article 49 EC and implemented in this area by the NCRF, requires not
only the grant of broadcasting authorisations, but also the grant of
broadcasting radio frequencies. An operator cannot exercise
effectively the rights which it derives from Community law in terms
of access to the television broadcasting market without broadcasting
radio frequencies.
...
Article 49 EC and, from the date on which they became
applicable, Article 9(1) of Directive 2002/21/EC of the European
Parliament and of the Council of 7 March 2002 on a common regulatory
framework for electronic communications networks and services
(Framework Directive), Article 5(1), the second subparagraph of
Article 5(2) and Article 7(3) of Directive 2002/20/EC of the European
Parliament and of the Council of 7 March 2002 on the authorisation of
electronic communications networks and services (Authorisation
Directive), and Article 4 of Commission Directive 2002/77/EC of 16
September 2002 on competition in the markets for electronic
communications networks and services must be interpreted as
precluding, in television broadcasting matters, national legislation
the application of which makes it impossible for an operator holding
rights to broadcast in the absence of broadcasting radio frequencies
granted on the basis of objective, transparent, non-discriminatory
and proportionate criteria.”
4. Resumption of proceedings in the Consiglio
di Stato
In
decision no. 2622/08 of 31 May 2008 the Consiglio di Stato
concluded that it could not allocate frequencies in the Government’s
place or compel the Government to do so. It ordered the Government to
deal with the applicant company’s request for frequencies in a
manner consistent with the criteria laid down by the CJEU. It made
the following observations in particular:
“The adoption by the authorities of a specific
measure relates more to issues of performance and implementation than
to damages: in cases involving an unlawful refusal to take an
administrative measure that has been requested, the adoption of the
measure does not amount to compensation, but rather to the
performance of an obligation incumbent upon the authorities, unless
the private party concerned has sustained any damage.”
With
regard to the request for the allocation of frequencies, the
Consiglio di Stato observed:
“Where legitimate interests are at stake, however,
it is not possible to envisage a specific means of redress because
inaction, a delay or an unlawful refusal will always have an impact
on a situation that was or remains unsatisfactory, with the result
that there is nothing to restore; the issue in relation to such
interests concerns the practical implementation of any ruling setting
aside the measure complained of.
...
Applying these principles to the present case, the
Consiglio finds that the appellant’s request for an
order requiring the authorities to allocate the network or
frequencies is inadmissible.”
5. Decision on the applicant company’s claim for
compensation
The
Consiglio di Stato deferred until 16 December 2008 its final
decision on the payment of compensation to the applicant company,
holding that it was necessary to wait for the relevant regulations to
be passed by the Government before assessing the amount.
The
Consiglio di Stato requested both parties to comply with the
following requirements by 16 December 2008. The Ministry was,
firstly, to specify what frequencies had been available following the
public tendering procedures in 1999 and why they had not been
allocated to the applicant company and, secondly, to justify its
assertion that the licence granted to the applicant company had
expired in 2005.
The
applicant company, for its part, was asked by the Consiglio di
Stato to submit a report on its activities between 1999 and 2008,
and also to explain why it had not taken part in the 2007 public
tendering procedure for the allocation of frequencies.
The
Consiglio di Stato also asked AGCOM to explain why the
national frequency allocation plan for terrestrial television
broadcasting had never been implemented. Lastly, it dismissed the
applicant company’s request for the suspension of the
provisional authorisation granted to a channel belonging to the
Mediaset group (Retequattro) for the use of the frequencies.
In
its reply AGCOM explained to the Consiglio di Stato that the
national frequency allocation plan had been implemented only on
13 November 2008. According to AGCOM, this delay was due to
several factors. Firstly, the legal situation was complicated because
it was difficult to identify the available broadcasting frequencies
as a result of the court decisions in which the over-quota channels
had been allowed to continue broadcasting. In addition, the
transitional arrangements introduced by Law no. 66/2001 (see
paragraphs 63-64 below), which had allowed the channels in question
to continue broadcasting in analogue mode, had prevented the plan
from being implemented on account of the incompatibility between the
interests of the channels likely to be allowed to broadcast under the
plan and the interests of the channels that were legally entitled to
continue their existing operations.
The
applicant company submitted an expert valuation by the commercial
bank Unipol assessing the damage sustained at 2,175,213,345.00 euros
(EUR). The valuation was based on the profits achieved by
Retequattro, the over-quota channel which should have relinquished
the frequencies allocated to the applicant company.
In
a judgment of 20 January 2009 the Consiglio di Stato, on the
basis of Article 2043 of the Civil Code (see paragraph 69 below),
ordered the Ministry to pay the applicant company the sum of EUR
1,041,418 in compensation. It observed that over a period of ten
years, the Ministry had acted negligently by having granted Centro
Europa 7 S.r.l. a licence without assigning it any broadcasting
frequencies.
The
Consiglio di Stato found that there was a causal link between
the conduct of the administrative authorities and the damage alleged,
and that the award of the licence to Centro Europa 7 S.r.l. had not
conferred on it the immediate right to pursue the corresponding
economic activity; accordingly, the compensation should be calculated
on the basis of the legitimate expectation of being allocated the
frequencies by the appropriate authorities.
In
the opinion of the Consiglio di Stato, the fact that the
frequencies had not been allocated until 11 December 2008 was
attributable to the authorities. Damage had thus been sustained as a
result of an unlawful act for which the authorities incurred
non-contractual liability, concerning both the breach of legitimate
expectations and the delay in allocating the frequencies. The fact
that the authorities had launched a public tendering procedure for
the frequencies in 1999, although the situation in the broadcasting
sector had not been clarified and there were outstanding technical
issues, had been “risky”. The Consiglio di Stato
considered that the question of redress for the damage sustained by
the applicant company should take this context into account. The
authorities’ conduct had not been characterised by “significant
gravity” (notevole gravità)
and the unlawful act was thus attributable to “negligent”
and not intentional conduct on their part.
The Consiglio di Stato added that the pecuniary
damage should be assessed with effect from 1 January 2004, since the
Constitutional Court had ruled that the “transition period”
after which legislation would have to be passed to allow licence
holders to start broadcasting had expired on 31 December 2003
(see paragraph 62 below). As to the criteria for determining the
damages to be awarded, the Consiglio di Stato pointed out
that, as regards the losses sustained, the applicant company had been
fully aware, at the time of the call for tenders, of the
circumstances of the case and the conditions to which the licence was
subject. Furthermore, the sequence of events that had prevented the
frequencies from being allocated had been largely foreseeable.
Accordingly, the applicant company should have known that it was
unlikely to obtain the frequencies, at least in the short term. In
addition, it could have purchased the frequencies under section 1 of
Law no. 66 of 20 March 2001 (see paragraph 64 below).
Having
regard to the above considerations, the Consiglio di Stato,
without ordering an expert valuation, decided to award the applicant
company EUR 391,418 for the losses sustained. As regards loss of
earnings, it found that, from 1 January 2004, the applicant company
could have achieved profits but had been unable to do so because of
the delay in allocating the frequencies; the amount could be assessed
at EUR 650,000. It refused to take into account the expert valuation
submitted by the applicant company and held that it was unlikely that
the company would have purchased shares in the market, even in the
event that the over-quota channels had relinquished the frequencies.
In the Consiglio di Stato’s view, the comparison between
the applicant company and the two leading operators (Mediaset and
RAI) was unjustified, especially as it did not take into account the
other nationwide operator (La 7), which, although it had greater
economic power than the applicant company, was nevertheless operating
at a loss.
II. RELEVANT DOMESTIC LAW AND PRACTICE
A. Constitutional Court judgment no. 225/1974
In
judgment no. 225/1974 the Constitutional Court, on the basis of
Article 43 of the Constitution, reaffirmed the principle of the
monopoly enjoyed by the State television corporation RAI on
public-interest grounds. It held that the technical limitations on
the number of frequencies justified the monopoly, and also laid down
the requirement of objectivity and impartiality in public-service
broadcasting.
B. Law no. 103/1975
Law
no. 103 of 14 April 1975 (Nuove norme in materia di diffusione
radiofonica e televisiva) transferred control of public-service
broadcasting from the executive to the legislature. A bicameral
parliamentary committee was set up with responsibility for the
general management and supervision of radio and television services.
RAI’s board of management was then appointed by Parliament. A
third channel of the RAI network was launched in 1979, with
particular emphasis on regional programmes.
C. Constitutional Court judgment no. 202/1976
In
judgment no. 202 of 15 July 1976 the Constitutional Court declared
unconstitutional the provisions of Law no. 103/1975 establishing a
monopoly or oligopoly on local broadcasting. In the light of that
decision, commercial operators were authorised to run local
television channels.
The
allocation and voluntary redistribution of local frequencies
subsequently encouraged the development of large regional or national
operators, including the Mediaset group. The group’s first
channel was Canale 5, which started broadcasting nationwide in 1980;
by 1984, having taken over two other channels (Italia Uno and
Retequattro), Mediaset had managed, together with RAI, to establish a
“duopoly” of public and private operators.
D. Law no. 223/1990
Law
no. 223 of 6 August 1990, entitled “Provisions governing the
public and private broadcasting system” (Disciplina del
sistema radiotelevisivo pubblico e privato), transferred the
power to appoint members of RAI’s board from the parliamentary
committee to the Speakers of the Chamber of Deputies and the Senate.
E. Constitutional Court judgment no. 420/1994
In
judgment no. 420 of 5 December 1994 the Constitutional Court declared
unconstitutional the provisions allowing the three channels
controlled by the Mediaset group (Canale 5, Italia Uno and
Retequattro) to occupy a dominant position. It held that the
provision whereby the same operator could hold several television
broadcasting licences on condition that it did not exceed 25% of the
total number of national channels – that is, three channels in
all – was not sufficient to prevent concentration of television
channels, and was accordingly in breach of Article 21 of the
Constitution in that it did not make it possible to guarantee the
plurality of information sources. The Constitutional Court considered
that the existence of legislation to prevent dominant positions from
being established was an essential requirement to justify the State’s
relinquishment of its monopoly on broadcasting. The creation of such
dominant positions in this sector would not only have had the effect
of changing the rules on competition but would also have led to the
emergence of an oligopoly and would have breached the fundamental
principle of plurality of information sources. The Constitutional
Court thus held that the mere coexistence of a State-owned company
and private companies (a mixed system) within the broadcasting sector
was not sufficient to secure respect for the right to receive
information from several competing sources. As it had previously
stated in decision no. 826/1988, it reaffirmed that a State-owned
company could not by itself ensure a balance precluding the
establishment of a dominant position in the private sector.
On
11 June 1995, in a referendum, the Italian electorate rejected by a
majority (57%) a proposal to amend existing legislation by
prohibiting a private entrepreneur from controlling more than one
television channel.
F. Law no. 249/1997
Law
no. 249 of 31 July 1997, which came into force on 1 August 1998,
established AGCOM (Autorità per le garanzie nelle
comunicazioni). Section 2(6) of the Law imposed concentration
restrictions in the television broadcasting sector, prohibiting the
same operator from holding licences to broadcast nationwide on more
than 20% of the television channels operating on terrestrial
frequencies.
Section
3(1) provided that operators authorised to broadcast under the
previous legal framework could continue to transmit their programmes
at national and local level until new licences were awarded or
applications for new licences were rejected, but in any event not
after 30 April 1998.
Section
3(2) provided that AGCOM was to adopt, by 31 January 1998 at the
latest, a national frequency allocation plan for television
broadcasting, on the basis of which new licences were to be awarded
by 30 April 1998 at the latest.
In
decision no. 68 of 30 October 1998 AGCOM adopted the national
frequency allocation plan; subsequently, in decision no. 78 of 1
December 1998, it adopted regulations on the conditions and procedure
for awarding licences for analogue terrestrial television
broadcasting.
Section
3(6) of Law no. 249/1997 introduced a transitional scheme whereby
existing national television channels exceeding the concentration
restrictions imposed by section 2(6) (known as “over-quota
channels”) could continue broadcasting on a temporary basis on
terrestrial frequencies after 30 April 1998, provided that they
complied with the obligations imposed on channels holding licences
and that their programmes were broadcast simultaneously on satellite
or cable.
Section
3(7) of the same Law entrusted AGCOM with the task of determining the
date by which, in view of the real and significant increase in
viewers of cable or satellite television, the over-quota channels
were to broadcast by satellite or cable only, thus relinquishing
terrestrial frequencies.
G. Constitutional Court judgment no. 466/2002
On
20 November 2002 the Constitutional Court delivered a judgment
concerning section 3(7) of Law no. 249/1997. It held that the
transition period laid down in that provision was acceptable, given
that at the time the law was passed the alternative means of
transmission in Italy could not be said to have been competitive in
relation to traditional analogue broadcasting, hence the need to
introduce a transition period to encourage the development of digital
broadcasting. However, the Constitutional Court declared
unconstitutional the failure to specify a fixed deadline for the
expiry of the transition period. Referring to the technical
conclusions set out in AGCOM’s decision no. 346/2001, resulting
from a study of the number of cable and satellite television viewers
in Italy, it ruled that 31 December 2003 was a reasonable date for
the expiry of the transition period.
The
Constitutional Court held, in particular:
“... the present Italian private television system
operating at national level in analogue mode has grown out of
situations of simple de facto occupation of frequencies
(operation of installations without licences and authorisations), and
not in relation to any desire for greater pluralism in the
distribution of frequencies and for proper planning of terrestrial
broadcasting ... This de facto situation does not therefore
guarantee respect for external pluralism of information, which is an
“essential requirement” laid down by the relevant
constitutional case-law ... In this context, given the persistence
(and aggravation) of a situation which was ruled illegal in judgment
no. 420/1994 and the continued operation of channels considered ‘over
quota’ by the legislature in 1997, a deadline must be set that
is absolutely certain, definitive and hence binding, in order to
ensure compatibility with constitutional rules ...”
H. Law no. 66/2001
Legislative
Decree no. 5 of 23 January 2001, which, as amended, became Law no. 66
of 20 March 2001, authorised operators lawfully engaged in television
broadcasting on terrestrial frequencies to continue broadcasting
until the national frequency allocation plan for digital television
was implemented.
Section
1 provided that operators which were not currently broadcasting but
had been awarded a licence could purchase broadcasting installations
and connections that were in lawful use on the date on which the
Legislative Decree came into force.
Section
2 bis provides:
“In order to ensure the opening of the digital
terrestrial television market, operators that are lawfully engaged in
digital television broadcasting, via satellite or cable, may conduct
trials by means of simultaneous repeats of programmes that have
already been broadcast on analogue frequencies.”
I. Law no. 43 of 24 February 2004 and Law no. 112 of 3
May 2004
Section
1 of Legislative Decree no. 352 of 24 December 2003, which, as
amended, became Law no. 43 of 24 February 2004, authorised the
over-quota channels to continue broadcasting on analogue and digital
television networks pending the completion of an investigation into
the development of digital television channels.
Law
no. 112 of 3 May 2004 (known as the “Gasparri Law”)
specified the different stages for the launch of digital broadcasting
on terrestrial frequencies.
Section
23 of the Law provides:
“1. Pending the implementation of the
national frequency allocation plan for digital television, operators
engaged in television broadcasting activities on any basis at
national or local level which fulfil the conditions necessary to
obtain authorisation for digital terrestrial broadcasting trials, in
accordance with ... Legislative Decree no. 5 [of 23 January 2001],
which, as amended, has become Law no. 66 [of 20 March 2001], may
conduct such trials, including by simultaneous repeats of programmes
already broadcast on analogue frequencies, until the conversion of
the networks has been completed, and may apply, from the date of the
entry into force of this Law, ... for the licences and authorisations
necessary for digital terrestrial broadcasting.
2. Digital broadcasting trials may be
conducted using installations lawfully broadcasting on analogue
frequencies on the date of the entry into force of this Law.
3. In order to allow digital networks to be
set up, transfers of installations or branches of undertakings
between operators lawfully engaged in television broadcasting at
national or local level shall be authorised, on condition that the
acquisitions are intended for digital broadcasting.
...
5. With effect from the date of the entry
into force of this Law, a licence to operate a television channel
shall be granted, upon request, to persons lawfully engaged in
television broadcasting by virtue of a licence or the general
authorisation provided for in subsection (1) above, where they can
show that they have attained coverage of at least 50% of the
population or of the local catchment area.
...
9. In order to facilitate the conversion of
the analogue system to the digital system, the broadcasting of
television programmes shall be carried on through installations
lawfully operating on the date of the entry into force of this Law
...”
AGCOM
approved a “first-level” frequency allocation plan for
national and regional channels on 29 January 2003 and the “integrated
plan”, supplementing the “first-level plan” with a
“second-level plan” (allocation of frequencies to local
channels), on 12 November 2003.
J. Article 2043 of the Civil Code
This provision reads as follows:
“Any unlawful act which causes damage to another
shall render the perpetrator liable in damages under the civil law.”
III. RELEVANT INTERNATIONAL MATERIAL
A. Council of Europe documents
1. Recommendation No. R (99) 1 of the Committee of
Ministers to member States on measures to promote media pluralism
The
relevant parts of this recommendation, adopted by the Committee of
Ministers on 19 January 1999 at the 656th meeting of the Ministers’
Deputies, read as follows:
“The Committee of Ministers, under the terms of
Article 15.b of the Statute of the Council of Europe,
...
Stressing also that the media, and in particular the
public service broadcasting sector, should enable different groups
and interests in society – including linguistic, social,
economic, cultural or political minorities – to express
themselves;
Noting that the existence of a multiplicity of
autonomous and independent media outlets at the national, regional
and local levels generally enhances pluralism and democracy;
Recalling that the political and cultural diversity of
media types and contents is central to media pluralism;
Stressing that States should promote political and
cultural pluralism by developing their media policy in line with
Article 10 of the European Convention on Human Rights, which
guarantees freedom of expression and information, and with due
respect for the principle of independence of the media;
...
Noting that there are already some cases of bottlenecks
in the area of the new communications technologies and services, such
as control over conditional access systems for digital television
services;
Noting also that the establishment of dominant positions
and the development of media concentrations might be furthered by the
technological convergence between the broadcasting,
telecommunications and computer sectors;
...
Convinced that transparency as regards the control of
media enterprises, including content and service providers of the new
communications services, can contribute to the existence of a
pluralistic media landscape;
...
Recalling also the provisions on media pluralism
contained in the Amending Protocol to the European Convention on
Transfrontier Television;
Bearing in mind the work conducted within the framework
of the European Union and other international organisations in the
area of media concentrations and pluralism,
Recommends that the governments of the member States:
i. examine the measures contained in the
appendix to this recommendation and consider the inclusion of these
in their domestic law or practice where appropriate, with a view to
promoting media pluralism;
ii. evaluate on a regular basis the
effectiveness of their existing measures to promote pluralism and/or
anti-concentration mechanisms and examine the possible need to revise
them in the light of economic and technological developments in the
media field.”
2. Recommendation Rec(2003)9 of the Committee of
Ministers to member States on measures to promote the democratic and
social contribution of digital broadcasting
The
relevant parts of this recommendation, adopted by the Committee of
Ministers on 28 May 2003 at the 840th meeting of the Ministers’
Deputies, read as follows:
“...
Recalling that the existence of a wide variety of
independent and autonomous media, permitting the reflection of
diversity of ideas and opinions, as stated in its Declaration on the
freedom of expression and information of 29 April 1982, is important
for democratic societies;
Bearing in mind Resolution No.1 on the future of public
service broadcasting adopted at the 4th European Ministerial
Conference on Mass Media Policy (Prague, 7 8 December 1994), and
recalling its Recommendation No R (96) 10 on the guarantee of the
independence of public service broadcasting;
Stressing the specific role of the broadcasting media,
and in particular of public service broadcasting, in modern
democratic societies, which is to support the values underlying the
political, legal and social structures of democratic societies, and
in particular respect for human rights, culture and political
pluralism;
...
Noting that in parallel with the multiplication of the
number of channels in the digital environment, concentration in the
media sector is still accelerating, notably in the context of
globalisation, and recalling to the member states the principles
enunciated in Recommendation No R (99) 1 on measures to promote media
pluralism, in particular those concerning media ownership rules,
access to platforms and diversity of media content;
...
Recommends that the governments of the member states,
taking account of the principles set out in the appendix:
a. create adequate legal and economic
conditions for the development of digital broadcasting that guarantee
the pluralism of broadcasting services and public access to an
enlarged choice and variety of quality programmes, including the
maintenance and, where possible, extension of the availability of
transfrontier services;
b. protect and, if necessary, take
positive measures to safeguard and promote media pluralism, in order
to counterbalance the increasing concentration in this sector;
...”
3. Recommendation CM/Rec(2007)2 of the Committee of
Ministers to member States on media pluralism and diversity of media
content
The
relevant parts of this recommendation, adopted by the Committee of
Ministers on 31 January 2007 at the 985th meeting of the Ministers’
Deputies, read as follows:
“...
Recalling Article 10 of the Convention for the
Protection of Human Rights and Fundamental Freedoms (ETS No. 5),
which guarantees freedom of expression and freedom to receive and
impart information and ideas without interference by public authority
and regardless of frontiers;
Recalling its Declaration on the freedom of expression
and information, adopted on 29 April 1982, which stresses that a free
flow and wide circulation of information of all kinds across
frontiers is an important factor for international understanding, for
bringing peoples together and for the mutual enrichment of cultures;
Recalling its Recommendation Rec(2000)23 on the
independence and functions of regulatory authorities for the
broadcasting sector and its Explanatory Memorandum, which stress the
importance of the political, financial and operational independence
of broadcasting regulators;
Recalling the opportunities provided by digital
technologies as well as the potential risks related to them in modern
society as stated in its Recommendation Rec(2003)9 on measures to
promote the democratic and social contribution of digital
broadcasting;
Recalling its Recommendation No. R (99) 1 on measures to
promote media pluralism and its Recommendation No. R (94) 13 on
measures to promote media transparency, the provisions of which
should jointly apply to all media;
Noting that, since the adoption of Recommendations No. R
(99) 1 and No. R (94) 13, important technological
developments have taken place, which make a revision of these texts
necessary in order to adapt them to the current situation of the
media sector in Europe;
...
Reaffirming that media pluralism and diversity of media
content are essential for the functioning of a democratic society and
are the corollaries of the fundamental right to freedom of expression
and information as guaranteed by Article 10 of the Convention for the
Protection of Human Rights and Fundamental Freedoms;
Considering that the demands which result from Article
10 of the Convention for the Protection of Human Rights and
Fundamental Freedoms will be fully satisfied only if each person is
given the possibility to form his or her own opinion from diverse
sources of information;
Recognising the crucial contribution of the media in
fostering public debate, political pluralism and awareness of diverse
opinions, notably by providing different groups in society –
including cultural, linguistic, ethnic, religious or other minorities
– with an opportunity to receive and impart information, to
express themselves and to exchange ideas;
...
Reaffirming that, in order to protect and actively
promote the pluralistic expressions of ideas and opinions as well as
cultural diversity, member states should adapt the existing
regulatory frameworks, particularly with regard to media ownership,
and adopt any regulatory and financial measures called for in order
to guarantee media transparency and structural pluralism as well as
diversity of the content distributed;
...
Bearing in mind that national media policy may also be
oriented to preserve the competitiveness of domestic media companies
in the context of the globalisation of markets and that the
transnational media concentration phenomena can have a negative
impact on diversity of content,
Recommends that governments of member states:
i. consider including in national law or
practice the measures set out below;
ii. evaluate at national level, on a regular
basis, the effectiveness of existing measures to promote media
pluralism and content diversity, and examine the possible need to
revise them in the light of economic, technological and social
developments on the media;
iii. exchange information about the structure
of media, domestic law and studies regarding concentration and media
diversity.
Recommended measures
I. Measures promoting structural pluralism
of the media
1. General principle
1.1. Member states should seek to ensure that a
sufficient variety of media outlets provided by a range of different
owners, both private and public, is available to the public, taking
into account the characteristics of the media market, notably the
specific commercial and competition aspects.
1.2. Where the application of general
competition rules in the media sector and access regulation are not
sufficient to guarantee the observance of the demands concerning
cultural diversity and the pluralistic expressions of ideas and
opinions, member states should adopt specific measures.
...
1.4. When adapting their regulatory
framework, member states should pay particular attention to the need
for effective and manifest separation between the exercise of
political authority or influence and control of the media or decision
making as regards media content.
...
4. Other media contributing
to pluralism and diversity
Member states should encourage the development of other
media capable of making a contribution to pluralism and diversity and
providing a space for dialogue. These media could, for example, take
the form of community, local, minority or social media. ...
II. Measures promoting content diversity
...
3. Allocation of broadcasting
licences and must carry/must offer rules
3.1. Member states should consider
introducing measures to promote and to monitor the production and
provision of diverse content by media organisations. In respect of
the broadcasting sector, such measures could be to require in
broadcasting licences that a certain volume of original programmes,
in particular as regards news and current affairs, is produced or
commissioned by broadcasters.
3.2. Member states should consider the
introduction of rules aimed at preserving a pluralistic local media
landscape, ensuring in particular that syndication, understood as the
centralised provision of programmes and related services, does not
endanger pluralism.
3.3. Member states should envisage, where
necessary, adopting must carry rules for other distribution means and
delivery platforms than cable networks. Moreover, in the light of the
digitisation process – especially the increased capacity of
networks and proliferation of different networks – member
states should periodically review their must carry rules in order to
ensure that they continue to meet well-defined general interest
objectives. Member states should explore the relevance of a must
offer obligation in parallel to the must carry rules so as to
encourage public service media and principal commercial media
companies to make their channels available to network operators that
wish to carry them. Any resulting measures should take into account
copyright obligations.”
4. Parliamentary
Assembly Resolution 1387 (2004) on monopolisation of the electronic
media and possible abuse of power in Italy
This
resolution, adopted by the Parliamentary Assembly on 24 June 2004,
reads as follows:
“1. Italy is a founding member of the
Council of Europe and strongly supports the ideals for which it
stands. The Parliamentary Assembly is therefore concerned by the
concentration of political, commercial and media power in the hands
of one person, Prime Minister Silvio Berlusconi.
2. The Parliamentary Assembly cannot accept
that this anomaly be minimised on the grounds that it only poses a
potential problem. A democracy is judged not only by its day-to-day
operations but by the principles the country upholds with regard to
its own citizens and internationally. The Assembly recalls that, in
accordance with Article 10 of the Convention for the Protection of
Human Rights and Fundamental Freedoms and the case-law of the
European Court of Human Rights, states have a duty to protect and,
when necessary, take positive measures to safeguard and promote media
pluralism.
3. The Assembly deplores the fact that
several consecutive Italian governments since 1994 have failed to
resolve the problem of conflict of interest and that appropriate
legislation has not yet been adopted by the present parliament. It
disagrees that the leading principle of the Frattini Bill currently
under consideration – that only managers, not owners, should be
held responsible – provides a genuine and comprehensive
solution to the conflict of interest concerning Mr Berlusconi.
4. Through Mediaset, Italy’s main
commercial communications and broadcasting group, and one of the
largest in the world, Mr Berlusconi owns approximately half of the
nationwide broadcasting in the country. His role as head of
government also puts him in a position to influence indirectly the
public broadcasting organisation, RAI, which is Mediaset’s main
competitor. As Mediaset and RAI command together about 90% of the
television audience and over three quarters of the resources in this
sector, Mr Berlusconi exercises unprecedented control over the most
powerful media in Italy.
5. This duopoly in the television market is
in itself an anomaly from an antitrust perspective. The status quo
has been preserved even though legal provisions affecting media
pluralism have twice been declared anti-constitutional and the
competent authorities have established the dominant positions of RAI
and the three television channels of Mediaset. An illustration of
this situation was a recent decree of the Prime Minister, approved by
parliament, which allowed the third channel of RAI and Mediaset’s
Retequattro to continue their operations in violation of the existing
antitrust limits until the adoption of new legislation. Competition
in the media sector is further distorted by the fact that the
advertising company of Mediaset, Publitalia ’80, has a
dominant position in television advertising. The Assembly deplores
the continued exclusion of a potential national broadcaster, Europa
7, winner of a 1999 government tender to broadcast on frequencies
occupied by Mediaset’s channel, Retequattro.
6. The Assembly believes that the
newly-adopted ‘Gasparri Law’ on the reform of the
broadcasting sector may not effectively guarantee greater pluralism
simply through the multiplication of television channels in the
course of digitalisation. At the same time, it manifestly allows
Mediaset to expand even further, as it gives the market players the
possibility to have a monopoly in a given sector without ever
reaching the antitrust limit in the overall integrated system of
communications (SIC). The Assembly notes that these concerns led the
President of the Republic to oppose the previous version of the law.
7. The Assembly is particularly concerned by
the situation of RAI, which is contrary to the principles of
independence laid down in Assembly Recommendation 1641 (2004) on
public service broadcasting. RAI has always been a mirror of the
political system of the country and its internal pluralism has moved
from the proportionate representation of the dominant political
ideologies in the past to the winner takes all attitude reflecting
the present political system. The Assembly notes with concern the
resignations of the president of RAI and of one of the most popular
journalists in the country in protest against the lack of balanced
political representation in the Council of Administration and against
the political influence over RAI’s programming.
8. While the printed media in Italy has
traditionally provided greater pluralism and political balance than
the broadcasting sector, most Italians receive their news through the
medium of television. The high cost of newspaper compared to
television advertising is having a damaging effect on the Italian
printed media. However, the Assembly wishes to record its approval of
government measures to help small- and medium-sized newspapers and
other measures to boost newspaper readership.
9. The Assembly is extremely concerned that
the negative image that Italy is portraying internationally because
of the conflict of interest concerning Mr Berlusconi, could
hamper the efforts of the Council of Europe aimed at promoting
independent and unbiased media in the new democracies. It considers
that Italy, as one of the strongest contributors to the functioning
of the Organisation, has a particular responsibility in this respect.
10. The Assembly points out that several
international bodies, such as the OSCE representative on Freedom of
the Media and, most recently, the European Parliament, have expressed
concerns similar to its own. It welcomes the measures for
safeguarding media pluralism proposed in the European Parliament
resolution on the risks of violation, in the European Union and
especially in Italy, of freedom of expression and information
(Article 11 (2) of the Charter of Fundamental Rights) of 22 April
2004, namely that the protection of media diversity should become a
priority of European Union competition law.
11. The Assembly therefore calls on the
Italian Parliament:
i. to pass as a matter of urgency a law
resolving the conflict of interest between ownership and control of
companies and discharge of public office, and incorporating penalties
for cases where there is a conflict of interest with the discharge of
public office at the highest level;
ii. to ensure that legislation and other
regulatory measures put an end to the long-standing practice of
political interference in the media, taking into account in
particular the Committee of Ministers’ Declaration on freedom
of political debate in the media, adopted on 12 February 2004;
iii. to amend the Gasparri Law in line with
the principles set out in Committee of Ministers’
Recommendation No. R (99) 1 on measures to promote media pluralism,
in particular:
a. by avoiding the emergence of
dominant positions in the relevant markets within the SIC;
b. by including specific measures to
bring an end to the current RAI-Mediaset duopoly;
c. by including specific measures to
ensure that digitalisation will guarantee pluralism of content.
12. The Assembly calls on the Italian
Government:
i. to initiate measures to bring the
functioning of RAI into line with Assembly Recommendation 1641 (2004)
on public service broadcasting, with the declaration of the 4th
European Ministerial Conference on Mass Media Policy in Prague and
with Committee of Ministers’ Recommendations No. R (96) 10 on
the guarantee of the independence of public service broadcasting and
Rec(2003)9 on measures to promote the democratic and social
contribution of digital broadcasting;
ii. to give a positive international example
by proposing and supporting initiatives within the Council of Europe
and the European Union aimed at promoting greater media pluralism at
European level.
13. The Assembly asks the Venice Commission
to give an opinion on the compatibility of the Gasparri Law and the
Frattini Bill with the standards of the Council of Europe in the
field of freedom of expression and media pluralism, especially in the
light of the case-law of the European Court of Human Rights.”
5. Opinion of the
Venice Commission on the compatibility of the “Gasparri”
and “Frattini” laws of Italy with the Council of Europe
standards in the field of freedom of expression and pluralism of the
media
The
Venice Commission’s opinion, adopted at its 63rd Plenary
Session (10-11 June 2005), reads as follows, in so far as relevant to
the present case:
“The Parliamentary Assembly of the Council of
Europe has requested the Venice Commission to give an opinion on
whether or not the two Italian laws on the broadcasting system (‘the
Gasparri Law’) and on the conflict of interest (‘the
Frattini Law’) are in conformity with the Council of Europe
standards in the fields of freedom of expression and pluralism of the
media.
...
While the case-law of the European Court on Human Rights
does not offer specific guidance on the matter, certain pertinent
principles may nonetheless be derived from that case-law: in
primis that freedom of expression has a fundamental role in a
democratic society, in particular where, through the press, it serves
to impart information and ideas of general interest, which the public
is moreover entitled to receive, and that the State is the ultimate
guarantor of pluralism, especially in relation to audio-visual media,
whose programmes are often broadcast very widely.
...
Media pluralism is achieved when there is a multiplicity
of autonomous and independent media at the national, regional and
local levels, ensuring a variety of media content reflecting
different political and cultural views. In the Commission’s
opinion, internal pluralism must be achieved in each media sector at
the same time: it would not be acceptable, for example, if pluralism
were guaranteed in the print media sector, but not in the television
one. Plurality of the media does not only mean, in the Commission’s
view, the existence of a plurality of actors and outlets, it also
means the existence of a wide range of media, that is to say
different kinds of media.
The Council of Europe instruments set out certain tools
for promoting media pluralism, which include:
- a legislative framework establishing limits
for media concentration; the instruments for achieving this include
permissible thresholds (to be measured on the basis of one or of a
combination of elements such as the audience share or the capital
share or revenue limits) which a single media company is allowed to
control in one or more relevant markets;
- specific media regulatory authorities with
powers to act against concentration;
- specific measures against vertical
integration (control of key elements of production, broadcasting,
distribution and related activities by a single company or group);
- independence of regulatory authorities;
- transparency of the media;
- pro-active measures to promote the
production and broadcasting of diverse content;
- granting, on the basis of objective and
non-partisan criteria, within the framework of transparent procedures
and subject to independent control, direct or indirect financial
support to increase pluralism;
- self-regulatory instruments such as
editorial guidelines and statutes setting out editorial independence.
In respect of the provisions in the Gasparri Law aiming
at protecting media pluralism, the Commission considers at the outset
that the mere increase in the number of channels which will be
brought about by digital television is not sufficient in itself to
guarantee media pluralism. Newly available channels may have very
small audiences but with similar amounts of output. Finally, larger
companies will enjoy greater purchasing power in a wide range of
activities such as programme acquisitions, and will thus enjoy
significant advantages over other national content providers.
The Commission considers therefore that the threshold of
20% of the channels is not a clear indicator of market share. It
should be combined, for instance, with an audience share indicator.
As regards the second threshold set out in the Gasparri
Law, that is 20% of the revenue in the Integrated Communications
Systems (SIC), the Commission considers that SIC certainly reflects a
modern trend but should not, at least in this very broad definition,
be used already at this stage instead of the ‘relevant market’
criterion, as its effect is to dilute the effectiveness of the
instruments aimed at protecting pluralism. Indeed, it may allow an
individual company to enjoy extremely high degrees of revenue shares
in individual markets, whilst at the same time remaining below the
20% threshold for the whole sector.
Indeed, the Commission notes that the combined effect of
the new framework set out in the Gasparri Law has relaxed the
previous anti-concentration rules whose maximum permissible levels
had been exceeded by Mediaset and RAI. Retequattro has accordingly
been allowed to continue to occupy analogue frequencies.
The Commission considers therefore that the SIC
criterion should be replaced by the previously used ‘relevant
market’ criterion, as is the case in the other European
countries.
...
As regards the provisions on migration of radio and
television broadcasters from analogue to digital frequencies, the
Commission has the impression that the Gasparri Law has taken the
approach of attempting to hold back on finding a real solution to the
problem of media concentration in the television market until some
future point in time and it relies heavily on the point when
digitalisation will come into full effect. In the Commission’s
view, this approach is not satisfactory, as, if the status quo
is maintained, it is likely that Mediaset and RAI will remain the
dominant actors in Italian television. In this respect, the
Commission recalls that while general anti-trust measures against the
abuse of dominant positions, in the media sector dominant
positions are forbidden as such.
...
In respect of the privatisation of RAI, which should
lead to a lesser degree of politicisation of the public broadcaster,
the Commission notes that change at RAI will allow for government
control over the public broadcaster for an unforeseeable period of
time. For as long as the present government stays in office, this
will mean that, in addition to being in control of its own three
national television channels, the Prime Minister will have some
control of the three public national television channels. The
Commission expresses concern over the risk that this atypical
situation may even strengthen the threat of monopolisation, which
might constitute, in terms of the case-law of the European Court of
Human Rights, an unjustified interference with freedom of expression.
...”
6. Issue Discussion Paper by the Commissioner for Human
Rights on “Media pluralism and human rights”
The
discussion paper of 6 December 2011 by the Commissioner for Human
Rights, in so far as relevant to the present case, reads as follows:
“3.2 The case of Italy
The history of the so-called ‘Italian anomaly’
is illustrative of how broadcast monopolisation (through
over-consolidation and super-mergers) can pose an acute danger even
in older democracies.
Freedom of expression and press freedoms are in a
healthy state in Italy. However, the television broadcasting market
is regularly referred to as the ‘Italian anomaly’.
In the last two decades, no third force has been able to
constrain the so-called duopoly: domination of the nationwide
television channel market by the private owner, Mediaset, and the
public owner Radiotelevisione Italiana, RAI. The duopoly was
accompanied by a practical monopoly by Mediaset in the commercial
television sector and the advertisement market. Before
digitalisation, the duopoly’s audience share was around 90%
(both owned three channels). Combined revenues and the advertisement
market also provided evidence of the duopoly.
Italy also has an ongoing record of control over public
service television by political parties and governments. As its Prime
Minister Silvio Berlusconi co-owns Mediaset, the usual fears of
governmental control of RAI are aggravated by worries of widespread
governmental control of the nation’s most important source of
information, television.
The so-called Gasparri and Frattini Laws of 2004 were
supposed to provide guarantees for future pluralism of the media, and
outlaw ‘twohat’ situations, respectively. However,
neither universal digitalisation nor equal competition rules alone
can guarantee cultural diversity and political pluralism in the
media, especially if the already existing media concentration is
practically maintained or even enhanced by the law. The Gasparri
Law’s rules of transition from analogue to digital, despite
their innovative force, allow the duopoly to use its acquired
economic might to expand into new digital markets.
European standards prohibit undue political or partisan
ownership or control of private broadcasters in order to avoid
government or political interference. Germany and the UK impose
restrictions on direct ownership or control of broadcast media by
political actors; EU countries also require broadcasters to maintain
independence from political parties and politicians. Italy, despite
its Frattini Law, does neither.”
B. European Parliament
The
European Parliament’s resolution on the risks of violation, in
the European Union and especially in Italy, of freedom of expression
and information (Article 11(2) of the Charter of Fundamental Rights
(2003/2237(INI)) reads as follows, in so far as relevant to the
present case:
“Situation in Italy
... Notes that the level of concentration of the
television market in Italy is currently the highest within Europe and
that while Italian television offers twelve national channels and ten
to fifteen regional and local channels, the market is characterised
by the duopoly between RAI and MEDIASET where both operators together
account for almost 90% of the total audience share and collect 96.8%
of advertising resources, as against 88% for Germany, 82% for the
United Kingdom, 77% for France and 58% for Spain;
Notes that the Mediaset group is the largest private
television and communications group in Italy and one of the largest
in the world and controls (inter alia) television networks
(RTI S.p.A.) and advertising franchise holders (Publitalia ’80),
both of which have been formally found to hold a dominant position in
breach of national law (Law no. 247/97) by the Communications
Regulatory Authority (decision 226/03);
Notes that one of the sectors in which the conflict of
interests is most obvious is advertising, given that in 2001 the
Mediaset group was in receipt of two thirds of television advertising
resources, amounting to a total of EUR 2,500 million, and that the
main Italian companies have transferred much of their investment in
advertising from printed matter to the Mediaset networks and from RAI
to Mediaset;
Notes that the President of the Italian Council of
Ministers has not resolved his conflict of interests as he had
explicitly pledged, but on the contrary has increased his controlling
shareholding in the company Mediaset (from 48.639% to 51.023%),
thereby drastically reducing his own net debt through a marked
increase in advertising revenue to the detriment of competitors’
revenues (and ratings) and, above all, of advertising funding for the
written press;
Regrets the repeated and documented instances of
governmental interference, pressure and censorship in respect of the
corporate structure and schedules (even as regards satirical
programmes) of the RAI public television service, starting with the
dismissal of three well-known professionals at the sensational public
request of the President of the Italian Council of Ministers in April
2002 – in a context in which an absolute majority of the
members of the RAI board of governors and the respective
parliamentary control body are members of the governing parties, with
this pressure then being extended to other media not under his
ownership, leading inter alia to the resignation of the editor
of Corriere della Sera in May 2003;
Notes, therefore, that the Italian system presents an
anomaly owing to a unique combination of economic, political and
media power in the hands of one man – the current President of
the Italian Council of Ministers – and to the fact that the
Italian Government is, directly or indirectly, in control of all
national television channels;
Notes that in Italy the broadcasting system has been
operating in extralegal circumstances for decades, as repeatedly
recognised by the Constitutional Court, and in the face of which the
efforts of the ordinary legislator and the competent institutions
have proved ineffective in re-establishing a legal regime; RAI and
Mediaset each continue to control three terrestrial analogue
television broadcasters, despite the fact that the Constitutional
Court in its judgment No 420 of 1994 has ruled it impermissible for
one and the same entity to broadcast over 20% of the television
programmes transmitted domestically on terrestrial frequencies (i.e.
more than two programmes) and has found the regulatory regime under
Law no. 223/90 to be contrary to the Italian Constitution, despite
being a ‘transitional regime’; nor did Law no. 249/97
(establishing the Communications Guarantee Authority and rules on
telecommunication and radio and television systems) abide by the
prescriptions of the Constitutional Court which, in its judgment
466/02, declared the constitutional illegitimacy of Article 3(7)
thereof, ‘in so far as it does not provide for the establishing
of a hard-and-fast deadline, in any event not exceeding 31 December
2003, by which the programmes transmitted by broadcasters exceeding
the limits referred to in paragraph 6 of Article 3 must be broadcast
exclusively via satellite or via cable’;
Notes that the Italian Constitutional Court declared in
November 2002 (Case 466/2002) that the present Italian private
television system operating at national level and in analogue mode
has grown out of situations of simple de facto occupation of
frequencies (operation of installations without concessions and
authorisations), and not in relation to any desire for greater
pluralism in the distribution of frequencies and proper planning of
broadcasting ... This de facto situation does not therefore
guarantee respect for external pluralism of information, which is an
essential requirement laid down by the relevant constitutional
case-law ... In this context, given the continued existence (and
aggravation) of the situation which was ruled illegal by Judgment
No. 420 in 1994 and of networks considered ‘surplus’
by the 1997 legislature, a final deadline must be set that is
absolutely certain, definitive and hence absolutely binding in order
to ensure compatibility with constitutional rules; notes that,
nonetheless, the deadline for the reform of the audiovisual sector
has not been respected and that the law for the reform of the
audiovisual sector has been sent back by the President of the
Republic for a new examination by the Parliament due to the
non-respect of the principles declared by the Constitutional Court;
...
Hopes that the legislative definition contained in the
draft act for reform of the audiovisual sector (Article 2, point G of
the Gasparri law) of the ‘integrated system of communications’
as the only relevant market does not conflict with Community
competition rules within the meaning of Article 82 of the EC Treaty
or with numerous judgments of the Court of Justice, and does not
render impossible a clear and firm definition of the reference
market;
Hopes also that the ‘system for assigning
frequencies’ provided for in the draft Gasparri law does not
constitute mere legitimisation of the de facto situation and
does not conflict, in particular, with Directive 2002/21/EC, Article
7 of 2002/20/EC or Directive 2002/77/EC, which specify, inter
alia, that the assigning of radio frequencies for electronic
communication services must be based on objective, transparent,
non-discriminatory and proportionate criteria;
Highlights its deep concern in relation to the
non-application of the law and the non-implementation of the
judgments of the Constitutional Court, in violation of the principle
of legality and of the rule of law, and at the incapacity to reform
the audiovisual sector, as a result of which the right of its
citizens to pluralist information has been considerably weakened for
decades; a right which is also recognised in the Charter of
Fundamental Rights;
Is concerned that the situation in Italy could arise in
other Member States and the accession countries if a media magnate
chose to enter into politics;
Regrets that the Italian Parliament has yet to adopt a
regulation resolving the conflict of interests of the President of
the Italian Council of Ministers, which, it was promised, would take
place within the first hundred days of his government;
Considers that the adoption of a general reform of the
audiovisual sector could be facilitated if it were to contain
specific and adequate safeguards to prevent actual or future
conflicts of interest in the activities of local, regional or
national executive members who have substantial interests in the
private audiovisual sector;
Hopes, moreover, that the draft Frattini law on conflict
of interests will not stop at de facto recognition of the premier’s
conflict of interests, but will provide for adequate mechanisms to
prevent this situation from continuing;
Regrets that, if the obligations of the Member States to
ensure pluralism in the media had been defined after the 1992 Green
Paper on pluralism, the current situation in Italy could possibly
have been avoided;
...
Invites the Italian Parliament:
- to accelerate its work on the reform of the
audiovisual sector in accordance with the recommendations of the
Italian constitutional court and the President of the Republic,
taking account of the provisions in the Gasparri Bill which are
incompatible with Community law, as noted by those authorities;
- to find a genuine and appropriate solution
to the problem of a conflict of interest of the President of the
Italian Council of Ministers who also directly controls the principal
provider of private and, indirectly, public television, the main
advertising franchise holder and many other activities connected with
the audiovisual and media sector,
- to take measures to ensure the independence
of the public service broadcaster.”
THE LAW
I. PRELIMINARY OBSERVATION
At
the hearing on 12 October 2011 the applicants clarified the temporal
scope of the case brought before the Court. In particular, they
specified that their complaints related only to the period from 28
July 1999, the date of the ministerial decree in which Centro Europa
7 S.r.l. was granted a licence for nationwide television broadcasting
(see paragraph 9 above), to 30 June 2009, the date from which it was
authorised to use a single channel and was able to begin broadcasting
(see paragraph 16 above). The Court will therefore confine itself to
examining whether the applicants’ fundamental rights were
infringed during the above-mentioned period, and will not consider
any similar infringements that might have occurred before 28 July
1999 or after 30 June 2009.
II. THE GOVERNMENT’S PRELIMINARY OBJECTIONS
A. The applicant company’s victim status
The
Government observed that the applicant company had been allocated the
frequencies by virtue of a ministerial decree of 11 December 2008
(see paragraph 16 above) and contended that any disputes on this
subject had been settled by the agreement of 9 February 2010 (see
paragraph 19 above). Moreover, on 20 January 2009 the Consiglio di
Stato had awarded the applicant company EUR 1,041,418 in
compensation (see paragraph 45 above). The Government argued that,
having regard to those measures as a whole, Centro Europa 7 S.r.l.
could not claim to be the victim of the acts of which it complained
(citing, mutatis mutandis, Scordino v. Italy
(no. 1) [GC], no. 36813/97, § 179, ECHR 2006-V).
The
applicant company submitted that although the frequencies had now
been allocated almost ten years after the licence had been granted,
it could still claim to be the victim of the alleged violations
because the compensation awarded by the Consiglio di Stato was
insufficient in relation to the damage sustained and did not reflect
its real impact. As regards the agreement of 9 February 2010, it
related to the assignment of additional frequencies to those
allocated in the decree of December 2008 and therefore did not come
within the scope of the present application.
The
Court reiterates that it falls first to the national authorities to
redress any alleged violation of the Convention. In this regard, the
question whether an applicant can claim to be a victim of the
violation alleged is relevant at all stages of the proceedings under
the Convention (see Burdov v. Russia, no. 59498/00, § 30,
ECHR 2002-III).
The
Court further reiterates that a decision or measure favourable to the
applicant is not in principle sufficient to deprive him or her of
“victim” status unless the national authorities have
acknowledged, either expressly or in substance, and then afforded
redress for, the breach of the Convention (see Eckle v. Germany,
15 July 1982, §§ 69 et seq., Series A no. 51; Amuur v.
France, 25 June 1996, § 36, Reports of Judgments and
Decisions 1996 III; Dalban v. Romania [GC], no.
28114/95, § 44, ECHR 1999-VI; and Jensen v. Denmark
(dec.), no. 48470/99, ECHR 2001-X).
The
issue as to whether a person may still claim to be the victim of an
alleged violation of the Convention essentially entails on the part
of the Court an ex post facto examination of his or her
situation (see Scordino (no. 1), cited above, §
181).
In
the instant case the applicant company was allocated the broadcasting
frequencies in December 2008 and was able to broadcast from 30 June
2009 (see paragraph 16 above). The allocation of the frequencies put
an end to the situation complained of by the applicant company in its
application. However, in the Court’s view this did not
constitute either an implicit acknowledgment of a breach of the
Convention, or redress for the period during which Centro Europa 7
S.r.l. was prevented from broadcasting.
The
Court further considers that there was no acknowledgment, either
explicitly or in substance, of a violation of Article 10 of the
Convention and Article 1 of Protocol No. 1 in the context of the
domestic proceedings. It notes in this connection that in 2005 the
Consiglio di Stato decided to suspend its examination of the
applicant company’s appeal and asked the CJEU to give a
preliminary ruling on the interpretation of the provisions of the
Treaty on freedom to provide services and competition, Directive
2002/21/EC (“the Framework Directive”), Directive
2002/20/EC (“the Authorisation Directive”), Directive
2002/77/EC (“the Competition Directive”) and Article 10
of the European Convention on Human Rights, in so far as Article 6 of
the Treaty on European Union referred to it (see paragraph 32 above).
The CJEU held that it was not necessary to rule on the question of
Article 10 of the Convention since its answer concerning Article 49
EC and, from the date on which they had become applicable, Article
9(1) of the Framework Directive, Article 5(1), the second
subparagraph of Article 5(2) and Article 7(3) of the Authorisation
Directive and Article 4 of the Competition Directive enabled the
national court to rule on the application made by the applicant
company (see paragraph 34 above).
In
its decisions of 31 May 2008 and 20 January 2009 the Consiglio di
Stato held that the failure to allocate frequencies to the
applicant company had been due to essentially legislative factors and
that there had been negligent conduct on the authorities’ part.
Accordingly, it awarded compensation to the applicant company under
Article 2043 of Civil Code (see paragraphs 37-38 and 45-48 above).
In
the Court’s opinion, the Consiglio di Stato confined
itself in those decisions to finding that the authorities incurred
non-contractual liability under the general provision of the Civil
Code (see paragraph 69 above) to the effect that any intentional or
negligent conduct which causes undue damage renders the perpetrator
liable in damages. There is no indication in the decisions in
question that, as well as having caused damage, the authorities’
conduct contravened the principles established by the Court in
relation to freedom of expression or the right to peaceful enjoyment
of possessions, or both. It should be noted in this connection that
the Consiglio di Stato made no reference to those principles.
Lastly,
before the Court the Government did not acknowledge that there had
been any violation of the Convention. In those circumstances, and in
the absence of any such acknowledgment, the Court considers that the
applicant company can still claim to be the victim of the violations
alleged.
Even
assuming that the compensation awarded by the Consiglio di Stato
was sufficient and appropriate, the Court considers that this cannot
remedy the lack of acknowledgment of the alleged violations.
The
Court therefore dismisses the Government’s objection.
B. The second applicant’s victim status
The
Government argued that the second applicant, Mr Francescantonio
Di Stefano, could not be regarded as having locus standi
before the Court. He had not explained what his role was in Centro
Europa 7 S.r.l. or how he qualified as a victim. The Government
further observed that he was not the sole shareholder of the company
in question and that all the administrative decisions had been given
in respect of the company alone.
The
applicants submitted that in accordance with the Court’s
case-law (referring to Glas Nadezhda EOOD and Anatoliy Elenkov v.
Bulgaria, no. 14134/02, § 41, 11 October 2007, and
Groppera Radio AG and Others v. Switzerland, 28 March 1990, §
49, Series A no. 173), the sole shareholder and statutory
representative of a company could also be regarded as a victim of a
prohibition on broadcasting.
The
Court reiterates that the term “victim” used in Article
34 of the Convention denotes the person directly affected by the act
or omission which is at issue (see, among other authorities, Vatan
v. Russia, no. 47978/99, § 48, 7 October 2004). It
further reiterates that a person cannot complain of a violation of
his or her rights in proceedings to which he or she was not a party,
even if he or she was a shareholder and/or director of a company
which was party to the proceedings (see, among other authorities, F.
Santos, Lda. and Fachadas v. Portugal (dec.), no. 49020/99, ECHR
2000-X, and Nosov v. Russia (dec.), no. 30877/02, 20 October
2005). Furthermore, while in certain circumstances the sole owner of
a company can claim to be a “victim” within the meaning
of Article 34 of the Convention where the impugned measures were
taken in respect of his or her company (see, among other authorities,
Ankarcrona v. Sweden (dec.), no. 35178/97, ECHR 2000-VI, and
Glas Nadezhda EOOD and Anatoliy Elenkov,
cited above, § 40), when that is not the case the disregarding
of a company’s legal personality can be justified only in
exceptional circumstances, in particular where it is clearly
established that it is impossible for the company to apply to the
Convention institutions through the organs set up under its articles
of incorporation or – in the event of liquidation –
through its liquidators (see Meltex Ltd and Movsesyan v. Armenia,
no. 32283/04, § 66, 17 June 2008; see also Agrotexim and
Others v. Greece, 24 October 1995, § 66, Series A no. 330-A;
CDI Holding Aktiengesellschaft and Others v. Slovakia (dec.),
no. 37398/97, 18 October 2001; and Amat-G Ltd and Mebaghishvili v.
Georgia, no. 2507/03, § 33, ECHR 2005 VIII).
The
Court observes at the outset that no such exceptional circumstances
have been established in the instant case (see, by contrast, G.J.
v. Luxembourg, no. 21156/93, § 24, 26 October 2000). It
further notes that the second applicant did not produce any evidence
to show that he was in fact the sole shareholder of Centro Europa 7
S.r.l. All the material in the Court’s possession indicates
that it was the applicant company alone, as a legal entity, which
took part in the call for tenders and was granted a television
broadcasting licence; furthermore, all the decisions of the Italian
courts during the domestic proceedings concerned the applicant
company alone (see Meltex Ltd and Movsesyan, cited above, §
67). The Court thus infers that the refusal to allocate the
frequencies and the ensuing court proceedings affected only the
interests of the applicant company. Accordingly, it cannot regard the
second applicant as a “victim”, within the meaning of
Article 34 of the Convention, of the acts of which he complained.
Having
regard to the foregoing, the Court concludes that the application, in
so far as it was lodged by the second applicant, is incompatible
ratione personae with the provisions of the Convention within
the meaning of Article 35 § 3 (a) and must be rejected in
accordance with Article 35 § 4.
The
Court will therefore confine itself to examining the complaints
brought on behalf of the applicant company.
C. Abuse of the right of individual petition
The
Government submitted that the applicant company had abused its right
of individual petition. They argued that the company had not informed
the Court of the enforcement proceedings concerning the allocation of
frequencies, which had led to the case being struck out as a result
of the agreement between Centro Europa 7 S.r.l. and the Government
(see paragraphs 19-20 above). The applicant company had thus
neglected to inform the Court of elements in its possession that were
essential for the examination of the case (Kerechashvili v.
Georgia (dec.), no. 5667/02, ECHR 2006-V).
The
Court reiterates that an application may be rejected as an abuse of
the right of application if it was knowingly based on untrue facts
with the intention of misleading the Court (see Varbanov v.
Bulgaria, no. 31365/96, § 36, ECHR 2000-X). The same applies
where new, significant developments occur during the proceedings
before the Court and where – despite being expressly required
to do so by Rule 47 § 6 of the Rules of Court – the
applicant fails to disclose that information to the Court, thereby
preventing it from ruling on the case in full knowledge of the facts
(see Hadrabová and Others v. the Czech Republic (dec.),
nos. 42165/02 and 466/03, 25 September 2007, and Predescu v.
Romania, no. 21447/03, §§ 25 27, 2 December
2008). However, even in such cases, the applicant’s intention
to mislead the Court must always be established with sufficient
certainty (see, mutatis mutandis, Melnik v. Ukraine,
no. 72286/01, §§ 58-60, 28 March 2006, and Nold v.
Germany, no. 27250/02, § 87, 29 June 2006).
In
the present case the Court notes that the applicant company’s
complaints concern its inability to broadcast during the period from
28 July 1999 to 30 June 2009 (see paragraph 77 above) and that in the
application form, the company stated that it had obtained the
frequencies in 2008 and had been allowed to broadcast from June 2009.
In
those circumstances, it cannot be concluded that the applicant
company neglected to inform the Court from the start of the
proceedings of one or more essential elements for the examination of
the case. It should also be noted that the agreement with the
Ministry and the application for the case to be restored to the
Regional Administrative Court’s list are events which occurred
on 9 February 2010 and 8 March 2011 respectively (see paragraphs
19-22 above), well after the end of the period to which the
application in the present case relates. Accordingly, there is no
basis for finding that the applicant company abused its right of
individual petition in the present case.
The
Government’s objection cannot therefore be upheld.
D. Late submission of the application
At
the hearing on 12 October 2011 the Government objected that the
six-month rule laid down in Article 35 § 1 of the Convention had
not been complied with on the ground that the final domestic decision
was the Consiglio di Stato’s decision no. 2622,
deposited with its registry on 31 May 2008. They argued that in
that decision the Consiglio di Stato, upholding the Regional
Administrative Court’s judgment, had declared inadmissible,
with final effect, the request for the allocation of frequencies. The
application of 20 July 2009 had therefore been lodged out of time.
The Court reiterates that the six-month rule cannot
be interpreted as requiring applicants to lodge a complaint with the
Court before their position in connection with the matter has been
finally settled at the domestic level (see Varnava and Others v.
Turkey [GC], nos. 16064/90, 16065/90, 16066/90, 16068/90,
16069/90, 16070/90, 16071/90, 16072/90 and 16073/90, § 157, ECHR
2009). If the applicant complains of a continuing situation, the
six-month period begins to run once that situation ends (see, among
many other authorities, Ortolani v. Italy (dec.),
no. 46283/99, 31 May 2001, and Pianese v. Italy and the
Netherlands (dec.), no. 14929/08, § 59, 27 September 2011).
In
the instant case, in its decision of 31 May 2008 the Consiglio di
Stato refused the applicant company’s request for the
allocation of frequencies, holding that the courts were not empowered
to take the measure requested in place of the administrative
authorities. It ruled that the Ministry had to give a decision on the
applicant company’s request for the frequencies by applying the
judgment delivered in the meantime by the CJEU, and deferred its
decision on the compensation to be awarded to the company (see
paragraphs 37-39 above).
It
follows that even after the Consiglio di Stato’s
decision no. 2622 of 31 May 2008, the applicant company was still
awaiting an answer from the authorities to its request for the
allocation of frequencies. Since that decision was not final, it did
not settle all the applicant company’s claims. In particular,
the issues of whether the company had sustained damage, whether such
damage was attributable to the authorities and whether it was
entitled to compensation remained open. The Consiglio di Stato
determined them only in its judgment of 20 January 2009, in which it
ordered the Ministry to pay the applicant company the sum of EUR
1,041,418 in compensation. Only in the latter judgment did the
Consiglio di Stato acknowledge that the Ministry’s
conduct had been negligent in that, firstly, it had granted Centro
Europa 7 S.r.l. a licence without allocating it any broadcasting
frequencies and, secondly, there was a causal link between the
authorities’ conduct and the alleged damage (see paragraph
45-48 above).
In
addition, the Court notes that the situation of which the applicant
company complained before it, namely its inability to broadcast
television programmes, did not end until 30 June 2009 (see paragraph
16 above), just twenty days before the application was lodged.
In
those circumstances, the Government’s objection that the
application was out of time cannot be upheld.
E. Failure to exhaust domestic remedies
In
the Government’s submission, the applicant company had not
exhausted domestic remedies since it had not raised, “at least
in substance”, its complaint under Article 10 of the Convention
in its application of 18 February 2009 to the Regional
Administrative Court challenging the decree of 11 December 2008 by
which the frequencies had been allocated (see paragraph 18 above).
The
applicant company disputed the Government’s argument and
asserted that the case it had brought in the Regional Administrative
Court concerned a period outside the scope of its application to the
Court.
The
general principles on exhaustion of domestic remedies are set out in
Sejdovic v. Italy ([GC], no. 56581/00, §§ 43-46,
ECHR 2006-II). The Court notes that the proceedings to which the
Government referred, which are still pending in the domestic courts
(see paragraph 23 above), concern the decree of 11 December 2008 by
which the frequencies were allocated. The decree in question put an
end to the situation complained of by the applicant company before
the Court, since it formed the legal basis on which it was able to
broadcast from 30 June 2009 (see paragraph 16 above). It follows
that, in the context of the present application, the applicant
company cannot be obliged to await the outcome of those proceedings
before the merits of its complaints are considered by the Court.
Accordingly,
the Government’s preliminary objection of failure to exhaust
domestic remedies must be dismissed.
III. ALLEGED VIOLATION OF ARTICLE 10 OF THE CONVENTION
The
applicant company alleged a violation of its right to freedom of
expression, and especially its freedom to impart information and
ideas. It complained in particular that for a period of almost ten
years the Government had not allocated it any frequencies for
analogue terrestrial television broadcasting. It submitted that the
failure to apply Law no. 249/1997 (see paragraph 56 above), the
failure to enforce the Constitutional Court’s judgments nos.
420/1994 and 466/2002 (see paragraphs 54 and 62 above) and the
duopoly existing in the Italian television market were in breach of
Article 10 of the Convention, which provides:
“1. Everyone has the right to freedom
of expression. This right shall include freedom to hold opinions and
to receive and impart information and ideas without interference by
public authority and regardless of frontiers. This Article shall not
prevent States from requiring the licensing of broadcasting,
television or cinema enterprises.
2. The exercise of these freedoms, since it
carries with it duties and responsibilities, may be subject to such
formalities, conditions, restrictions or penalties as are prescribed
by law and are necessary in a democratic society, in the interests of
national security, territorial integrity or public safety, for the
prevention of disorder or crime, for the protection of health or
morals, for the protection of the reputation or rights of others, for
preventing the disclosure of information received in confidence, or
for maintaining the authority and impartiality of the judiciary.”
The
Government contested that argument.
A. Admissibility
The
Court observes that this complaint is not manifestly ill-founded
within the meaning of Article 35 § 3 (a) of the Convention. It
further notes that it is not inadmissible on any other grounds. It
must therefore be declared admissible.
B. Merits
1. Submissions of the parties and the third-party
intervener
(a) The applicant company
The
applicant company submitted that it had been unable to broadcast
television programmes despite having been granted a licence to do so
following a public tendering procedure. This infringement of its
rights resulted from various legislative, administrative and judicial
measures by the Italian State, acting through different bodies and
instruments. The interferences with its right to freedom of
expression had been neither justified nor necessary in a democratic
society.
In
the applicant company’s submission, the enactment of a series
of transitional laws had endorsed a provisional practice that
favoured existing operators, preventing it from effectively asserting
its rights. It referred to the Court’s finding in Meltex Ltd
and Movsesyan (cited above) and noted that, unlike in that case,
the violation in its own case did not stem simply from the denial of
a right in a one-off decision but from the refusal, for more than ten
years, to give effect to a licence awarded as a result of a public
tendering procedure.
The
applicant company submitted that the refusal to allocate it any
broadcasting frequencies amounted to interference with the exercise
of its rights under Article 10 § 1 of the Convention (Meltex
Ltd and Movsesyan, cited above, and Glas
Nadezhda EOOD and Anatoliy Elenkov, cited above). The
interference had not been prescribed by law, as required by the
Convention, on account of the unforeseeability of the transitional
legislation passed by the national parliament. The applicant company
further pointed out that the Italian courts had applied the
legislation in question and had found that compensation should be
calculated with effect from 1 December 2004, contrary to what
the CJEU had held in its judgment.
(b) The Government
The
Government observed that in 1999 the applicant company had been
awarded a licence which had not ipso facto conferred the right
to be allocated frequencies. In accordance with Legislative Decree
no. 5 of 23 January 2001, as amended by Law no. 66 of 20 March
2001 (see paragraphs 63-64 above), the applicant company could have
purchased the necessary frequencies to transmit programmes. However,
it had not availed itself of that option and had not taken part in
the fresh call for tenders issued in 2007.
In
the Government’s submission, the applicant company had not been
allocated frequencies because of the general reorganisation of
national and local analogue frequencies in a context of limited
availability, and because several companies that had submitted
unsuccessful bids in 1999 had appealed to the national courts and
been allowed to continue broadcasting without a licence on the basis
of the former rules.
The
Government stated that the purpose of the 1999 call for tenders had
been to select the operators to be included in the AGCOM plan.
Accordingly, the aim had not been to allocate frequencies directly
since the installation adjustment programme had yet to be drawn up.
In that connection, they pointed out that the Ministry had not
awarded any other licences under the same conditions in 1999.
The
Government explained that, following the failure of cable television
in Italy, Law no. 66/2001 had envisaged that the transition to
digital terrestrial television would take place by 2006 at the
latest. Subsequently, Legislative Decree no. 352/2003 and Law no.
112/2004 (see paragraphs 65-67 above) had specified that the
transitional provisions would cease to apply once digital coverage
had exceeded 50% of all users, a level attained on 27 May 2004.
The
Government further noted that the CJEU had held that it was not
necessary to examine whether there had been a violation of Article 10
of the Convention. Furthermore, in judgments nos. 242 and 243/2009
the Consiglio di Stato had held that national television was
not a transfrontier service and that the applicant company, as a
licence holder, was entitled to take part in competitive,
non-discriminatory procedures for the allocation of frequencies from
1 January 2008. This result had been achieved with the ministerial
decree of 11 December 2008 (see paragraph 16 above), in which the
applicant company had been allocated channel 8 on the VHF III
frequency band, which had become available as a result of the
transition to digital broadcasting.
The
Government pointed out that Italy had gradually had to bring national
and local channels into line and that it had been essential to
reconcile the vested rights of existing operators with the interests
of new operators and, above all, to avoid any risk of sliding towards
a monopoly or, conversely, into chaos. The transition had, in
particular, allowed the existing operators to continue broadcasting
and the new licence holders to develop a network by purchasing
frequencies.
The
Government pointed out that, according to the Court’s case-law,
regulation of the activities of television companies was compatible
with Article 10 of the Convention, which did not prevent States from
examining the technical aspects, the rights and needs of a specific
audience, the nature and objectives of channels, their potential
audience at national and local level, and the obligations deriving
from international undertakings (Informationsverein Lentia and
Others v. Austria, 24 November 1993, Series A no. 276).
The
Government explained that the licence granted to the applicant
company meant that it was in a legally protected position and could
purchase frequencies, use other operators’ digital transmission
capacity and benefit from “the co-location of the two operators
RAI and [Mediaset]”.
The
Government observed that the applicant company currently offered its
customers a series of channels broadcasting varied content, including
horror films and adult films. In practical terms, it operated a
limited system, since its programmes could be viewed only by using a
decoder which it supplied to its customers. This served to illustrate
the manner and scope of the benefit drawn by the applicant company
from its freedom to impart information and ideas in a democratic
society.
Lastly,
the Government submitted that the circumstances of the case were in
no way comparable to those of Meltex Ltd and Movsesyan (cited
above).
(c) The third-party intervener
Open
Society Justice Initiative began by giving an overview of the
“Guiding Principles on Broadcast Media Pluralism”. It
then referred to the laws and practices of three European countries
of a similar size to Italy (France, Germany and the United Kingdom),
before discussing European standards, which recognised that the duty
to ensure pluralism necessitated limits on media ownership,
especially in broadcasting.
It
also examined political control of broadcasters and noted that many
European countries had adopted legal systems that specifically banned
and/or restricted the ability of leading politicians and political
parties to control broadcasting entities and their programming.
In
the third party’s submission, the circumstances of the present
case were to be seen in the context of a greater and older malaise in
the Italian broadcasting and information sector. Open Society Justice
Initiative submitted that, should the Court find an Article 10
violation in this case, it should consider ordering the Italian State
to implement measures of a general and systemic nature with a view to
guaranteeing the pluralism of its broadcasting system.
2. The Court’s assessment
(a) General principles concerning
pluralism in the audiovisual media
The Court considers it appropriate at the outset to
recapitulate the general principles established in its case-law
concerning pluralism in the audiovisual media. As it has often noted,
there can be no democracy without pluralism. Democracy thrives on
freedom of expression. It is of the essence of democracy to allow
diverse political programmes to be proposed and debated, even those
that call into question the way a State is currently organised,
provided that they do not harm democracy itself (see Manole and
Others v. Moldova, no. 13936/02, § 95, ECHR 2009 (extracts),
and Socialist Party and Others v. Turkey, 25 May 1998, §§
41, 45 and 47, Reports 1998 III).
In
this connection, the Court observes that to ensure true pluralism in
the audiovisual sector in a democratic society, it is not sufficient
to provide for the existence of several channels or the theoretical
possibility for potential operators to access the audiovisual market.
It is necessary in addition to allow effective access to the market
so as to guarantee diversity of overall programme content, reflecting
as far as possible the variety of opinions encountered in the society
at which the programmes are aimed.
Freedom
of expression, as secured in Article 10 § 1, constitutes one of
the essential foundations of a democratic society and one of the
basic conditions for its progress (see Lingens v. Austria, 8
July 1986, § 41, Series A no. 103). Freedom of the press
and other news media affords the public one of the best means of
discovering and forming an opinion of the ideas and attitudes of
political leaders. It is incumbent on the press to impart information
and ideas on political issues and on other subjects of public
interest. Not only does the press have the task of imparting such
information and ideas: the public also has a right to receive them
(see, for example, Handyside v. the United Kingdom, 7 December
1976, § 49, Series A no. 24, and Lingens, cited above, §§
41-42).
The
audiovisual media, such as radio and television, have a particularly
important role in this respect. Because of their power to convey
messages through sound and images, such media have a more immediate
and powerful effect than print (see Jersild v. Denmark, 23
September 1994, § 31, Series A no. 298, and Pedersen and
Baadsgaard v. Denmark [GC], no. 49017/99, § 79, ECHR
2004-XI). The function of television and radio as familiar sources of
entertainment in the intimacy of the listener’s or viewer’s
home further reinforces their impact (see Murphy v. Ireland,
no. 44179/98, § 74, ECHR 2003-IX).
A
situation whereby a powerful economic or political group in society
is permitted to obtain a position of dominance over the audiovisual
media and thereby exercise pressure on broadcasters and eventually
curtail their editorial freedom undermines the fundamental role of
freedom of expression in a democratic society as enshrined in Article
10 of the Convention, in particular where it serves to impart
information and ideas of general interest, which the public is
moreover entitled to receive (see VgT Verein gegen
Tierfabriken v. Switzerland, no. 24699/94, §§ 73 and
75, ECHR 2001-VI; see also De Geillustreerde v. the Netherlands,
no. 5178/71, Commission decision of 6 July 1976, § 86, Decisions
and Reports 8, p. 13). This is true also where the position of
dominance is held by a State or public broadcaster. Thus, the Court
has held that, because of its restrictive nature, a licensing regime
which allows the public broadcaster a monopoly over the available
frequencies cannot be justified unless it can be demonstrated that
there is a pressing need for it (see Informationsverein Lentia and
Others, cited above, § 39).
The
Court observes that in such a sensitive sector as the audiovisual
media, in addition to its negative duty of non-interference the State
has a positive obligation to put in place an appropriate legislative
and administrative framework to guarantee effective pluralism (see
paragraph 130 above). This is especially desirable when, as in
the present case, the national audiovisual system is characterised by
a duopoly.
With
this in mind, it should be noted that in Recommendation CM/Rec(2007)2
on media pluralism and diversity of media content (see paragraph 72
above) the Committee of Ministers reaffirmed that “in order to
protect and actively promote the pluralistic expressions of ideas and
opinions as well as cultural diversity, member states should adapt
the existing regulatory frameworks, particularly with regard to media
ownership, and adopt any regulatory and financial measures called for
in order to guarantee media transparency and structural pluralism as
well as diversity of the content distributed”.
The
question arising in the instant case is whether there has been
interference by the public authorities with the applicant company’s
right to “impart information and ideas” and, if so,
whether the interference was “prescribed by law”, pursued
one or more legitimate aims and was “necessary in a democratic
society” for achieving them (see RTBF v. Belgium,
no. 50084/06, § 117, ECHR 2011 (extracts)).
(b) Whether there was interference
The Court has held that the refusal to grant a
broadcasting licence constitutes interference with the exercise of
the rights guaranteed by Article 10 § 1 of the Convention
(see, among other authorities, Informationsverein Lentia and
Others, cited above, § 27; Radio ABC v. Austria,
20 October 1997, § 27, Reports 1997-VI; Leveque v.
France (dec.), no. 35591/97, 23 November 1999; United
Christian Broadcasters Ltd v. the United Kingdom (dec.), no.
44802/98, 7 November 2000; Demuth v. Switzerland, no.
38743/97, § 30, ECHR 2002-IX; and Glas Nadezhda EOOD and
Anatoliy Elenkov, cited above, § 42). It is of little
consequence whether the licence is refused following an individual
application or participation in a call for tenders (see Meltex Ltd
and Movsesyan, cited above, § 74).
The
Court observes that the present case differs from those cited in the
preceding paragraph in that it does not concern a refusal to grant a
licence. On the contrary, following a call for tenders, the applicant
company was granted a licence on 28 July 1999 for analogue
terrestrial television broadcasting (see paragraph 9 above). However,
since it was not allocated any broadcasting frequencies, it was
unable to transmit programmes until 30 June 2009.
The Court reiterates that the Convention is intended
to guarantee not rights that are theoretical or illusory but rights
that are practical and effective (see Artico v. Italy, 13 May
1980, § 33, Series A no. 37). The failure to allocate
frequencies to the applicant company deprived the licence of all
practical purpose since the activity it authorised was de facto
impossible to carry out for nearly ten years. This accordingly
constituted a substantial obstacle to, and hence an interference
with, the applicant company’s exercise of its right to impart
information and ideas.
(c) Whether the interference was
“prescribed by law”
(i) General principles
The
third sentence of Article 10 § 1 entitles States to regulate by
means of a licensing system the way in which broadcasting is
organised in their territories, particularly in its technical
aspects. The granting of a licence may also be made conditional on
other considerations, such as the nature and objectives of a proposed
channel, its potential audience at national, regional or local level,
the rights and needs of a specific audience and the obligations
deriving from international legal instruments (see United
Christian Broadcasters Ltd, cited above, and Demuth, cited
above, §§ 33 35). Such regulation must have a
basis in “law”.
The
expression “prescribed by law” in the second paragraph of
Article 10 not only requires that the impugned measure should have a
legal basis in domestic law, but also refers to the quality of the
law in question, which should be accessible to the person concerned
and foreseeable as to its effects (see, among other authorities, VgT
Verein gegen Tierfabriken, cited above, § 52; Rotaru v.
Romania [GC], no. 28341/95, § 52, ECHR 2000-V; Gawęda
v. Poland, no. 26229/95, § 39, ECHR 2002-II; and Maestri
v. Italy [GC], no. 39748/98, § 30, ECHR 2004-I). However, it
is primarily for the national authorities, notably the courts, to
interpret and apply domestic law (see Kruslin v. France, 24
April 1990, § 29, Series A no. 176-A, and Kopp v.
Switzerland, 25 March 1998, § 59, Reports 1998-II).
One
of the requirements flowing from the expression “prescribed by
law” is foreseeability. Thus, a norm cannot be regarded as a
“law” unless it is formulated with sufficient precision
to enable citizens to regulate their conduct; they must be able –
if need be with appropriate advice – to foresee, to a degree
that is reasonable in the circumstances, the consequences which a
given action may entail. Such consequences need not be foreseeable
with absolute certainty: experience shows this to be unattainable.
Again, whilst certainty is highly desirable, it may bring in its
train excessive rigidity, and the law must be able to keep pace with
changing circumstances. Accordingly, many laws are inevitably couched
in terms which, to a greater or lesser extent, are vague and whose
interpretation and application are questions of practice (see Sunday
Times v. the United Kingdom (no. 1), 26 April 1979, §
49, Series A no. 30; Kokkinakis v. Greece, 25 May 1993, § 40,
Series A no. 260-A; and Rekvényi v. Hungary [GC], no.
25390/94, § 34, ECHR 1999-III).
The
level of precision required of domestic legislation – which
cannot in any case provide for every eventuality – depends to a
considerable degree on the content of the law in question, the field
it is designed to cover and the number and status of those to whom it
is addressed (see RTBF v. Belgium, cited above, §
104; Rekvényi, cited above, § 34; and Vogt
v. Germany, 26 September 1995, § 48, Series A no. 323).
In
particular, a rule is “foreseeable” when it affords a
measure of protection against arbitrary interferences by the public
authorities (see Tourancheau and July v. France, no. 53886/00,
§ 54, 24 November 2005) and against the extensive application of
a restriction to any party’s detriment (see, mutatis
mutandis, Başkaya and Okçuoğlu v. Turkey
[GC], nos. 23536/94 and 24408/94, § 36, ECHR 1999-IV).
(ii) Application of the above principles
in the instant case
In
the instant case, therefore, the Court must determine whether Italian
legislation laid down with sufficient precision the conditions and
procedure whereby the applicant company could have been allocated
broadcasting frequencies in accordance with the licence it had been
granted. This is especially important in a case such as the present
one, in which the relevant legislation concerned the conditions of
access to the audiovisual market.
The
Court notes that on 28 July 1999 the appropriate authorities granted
the applicant company a licence for nationwide terrestrial television
broadcasting in accordance with Law no. 249/1997, authorising it to
install and operate an analogue television network. As regards the
allocation of frequencies, the licence referred to the national
frequency allocation plan, adopted on 30 October 1998, and gave the
applicant company twenty-four months to bring its installations into
line with the relevant requirements (see paragraph 9 above). However,
as is clear from the decisions of the domestic courts (see paragraph
14 above), that obligation could not be satisfied by the applicant
company until such time as the authorities had adopted the adjustment
programme and implemented the frequency allocation plan. The Court
considers that in such circumstances the applicant company could
reasonably have expected the authorities to adopt, within the
twenty-four months following 28 July 1999 at the latest, the
instruments needed to regulate its terrestrial broadcasting
activities. Provided that it upgraded its installations as it was
required to do, the applicant company should then have been entitled
to transmit television programmes.
However,
the frequency allocation plan was not implemented until December 2008
and the applicant company was allocated a channel to broadcast its
programmes with effect from 30 June 2009 only (see paragraph 16
above). In the meantime, several channels had continued on a
provisional basis to use various frequencies that were supposed to
have been allocated under the plan. The Consiglio di Stato
held (see paragraph 28 above) that this state of affairs was due to
essentially legislative factors. The Court will briefly examine those
factors.
It
notes firstly that section 3(1) of Law no. 249/1997 provided that the
“over-quota” channels (see paragraph 60 above) could
continue to broadcast at both national and local level until new
licences were awarded or applications for new licences were rejected
but, in any event, not after 30 April 1998 (see paragraph 57
above). However, section 3(6) of the same Law established a
transitional scheme whereby the over-quota channels could continue
broadcasting on terrestrial frequencies on a temporary basis after 30
April 1998, provided that they complied with the obligations imposed
on channels holding licences and that their programmes were broadcast
simultaneously on satellite or cable (see paragraph 60 above).
The
applicant company could have inferred from the above-mentioned
legislative framework applicable at the time the licence was granted
that from 30 April 1998 the possibility for the over-quota channels
to continue broadcasting would not affect the rights of new licence
holders. However, this framework was amended by Law no. 66 of 20
March 2001, which regulated the transition from analogue to digital
television and, once again, authorised over-quota channels to
continue broadcasting on terrestrial frequencies pending the
implementation of the national frequency allocation plan for digital
television (see paragraph 63 above).
On
20 November 2002, by which time the plan had still not been
implemented, the Constitutional Court held that the transition from
terrestrial frequencies to cable or satellite broadcasting for
over-quota channels should be completed by 31 December 2003 at the
latest, irrespective of the stage reached in the development of
digital television (see paragraph 62 above). In the light of that
judgment, the applicant company could have expected that the
frequencies which should have been allocated to it would be freed up
by the start of 2004. However, a further extension was ordered as a
result of national legislation.
Section
1 of Legislative Decree no. 352/2003 allowed the over-quota channels
to continue operating pending the completion of an AGCOM
investigation into the development of digital television channels.
Subsequently, Law no. 112/2004 (section 23(5)), by a general
authorisation mechanism, extended the possibility for over-quota
channels to continue broadcasting on terrestrial frequencies until
the national frequency allocation plan for digital television was
implemented (see paragraphs 65-67 above), with the result that those
channels were no longer required to free up the frequencies that
should have been transferred to operators holding licences, such as
the applicant company.
The
Court observes that the successive application of these laws had the
effect of blocking the frequencies and preventing operators other
than the over-quota channels from participating in the early stages
of digital television. In particular, the laws in question postponed
the expiry of the transitional scheme until the completion of an
AGCOM investigation into the development of digital television
channels and until the implementation of the national frequency
allocation plan, that is to say, with reference to events occurring
on dates which were impossible to foresee. In this connection, the
Court agrees with the CJEU’s finding to the effect that:
“... Law no. 112/2004 does not merely allocate to
the incumbent operators a priority right to obtain radio frequencies,
but reserves them that right exclusively, without restricting in time
the privileged position assigned to those operators and without
providing for any obligation to relinquish the radio frequencies in
breach of the threshold after the transfer to digital television
broadcasting.”
The
Court therefore considers that the laws in question were couched in
vague terms which did not define with sufficient precision and
clarity the scope and duration of the transitional scheme.
In
addition, the CJEU, to which the matter had been referred by the
Consiglio di Stato, noted that these measures by the national
legislature had entailed the successive application of transitional
arrangements structured in favour of the incumbent networks, and that
this had had the effect of preventing operators without broadcasting
frequencies, such as Centro Europa 7 S.r.l., from accessing the
television broadcasting market even though they had a licence
(granted, in the applicant company’s case, in 1999 –
see paragraph 35 above).
Having
regard to the foregoing, the Court considers that the domestic
legislative framework lacked clarity and precision and did not enable
the applicant company to foresee, with sufficient certainty, the
point at which it might be allocated the frequencies and be able to
start performing the activity for which it had been granted a
licence, this notwithstanding the successive findings of the
Constitutional Court and the CJEU. It follows that the laws in
question did not satisfy the foreseeability requirements established
by the Court in its case-law.
The
Court further notes that the authorities did not observe the
deadlines set in the licence, as resulting from Law no. 249/1997 and
the judgments of the Constitutional Court, thereby frustrating the
applicant company’s expectations. The Government have not shown
that the company had effective means at its disposal to compel the
authorities to abide by the law and the Constitutional Court’s
judgments. Accordingly, it was not afforded sufficient guarantees
against arbitrariness.
(d) Conclusion
In
conclusion, the Court considers that the legislative framework, as
applied to the applicant company, which was unable to operate in the
television broadcasting sector for more than ten years despite having
been granted a licence in a public tendering procedure, did not
satisfy the foreseeability requirement under the Convention and
deprived the company of the measure of protection against
arbitrariness required by the rule of law in a democratic society.
This shortcoming resulted, among other things, in reduced competition
in the audiovisual sector. It therefore amounted to a failure by the
State to comply with its positive obligation to put in place an
appropriate legislative and administrative framework to guarantee
effective media pluralism (see paragraph 134 above).
These
findings are sufficient to conclude that there has been a violation
of Article 10 of the Convention in the instant case.
The
above conclusion dispenses the Court from examining whether the other
requirements of paragraph 2 of Article 10 of the Convention were
complied with in the instant case, namely whether the laws prolonging
the transitional scheme pursued a legitimate aim and were necessary
in a democratic society for achieving that aim.
IV. ALLEGED VIOLATION OF ARTICLE 14 IN CONJUNCTION WITH
ARTICLE 10 OF THE CONVENTION
The
applicant company asserted that it had been discriminated against in
relation to the Mediaset group in the enjoyment of its right to
freedom of expression.
It
relied on Article 14 of the Convention, which provides:
“The enjoyment of the rights and freedoms set
forth in [the] Convention shall be secured without discrimination on
any ground such as sex, race, colour, language, religion, political
or other opinion, national or social origin, association with a
national minority, property, birth or other status.”
In
the applicant company’s submission, the Italian system had
afforded preferential treatment to the Mediaset group, which had
benefited from discriminatory legislative and administrative measures
adopted in circumstances involving a conflict of interests. It also
alleged that it had suffered discrimination in relation to other
operators and had been prevented as a result from entering the
market.
The
Government submitted that a political approach to the case should be
avoided. They reiterated the reasons set out in their observations
under Article 10 as to why the applicant company had been unable to
obtain the frequencies, denied that there was any link between the
situations of Centro Europa 7 S.r.l. and Mediaset, and submitted that
there had been no preferential treatment of any particular channel
over the applicant company in the present case.
The
Court observes that this complaint is closely linked to the complaint
under Article 10 of the Convention and must likewise be declared
admissible. Having regard to its conclusions under Article 10 (see
paragraph 156 above), the Court does not consider it necessary
to examine separately the complaint under Article 14 of the
Convention.
V. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
The
applicant company complained of an infringement of its right to the
peaceful enjoyment of its possessions as enshrined in Article 1 of
Protocol No. 1, which provides:
“Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be deprived of
his possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with the
general interest or to secure the payment of taxes or other
contributions or penalties.”
The
applicant company submitted that, for nearly ten years, it had been
unable to exercise its rights under the licence it had been granted
for nationwide television broadcasting, and that the compensation
awarded to it by the domestic courts did not reflect the full value
of its “possession”.
The
Government contested that argument.
A. Admissibility
The
Court must first determine whether the applicant company had a
“possession” within the meaning of Article 1 of Protocol
No. 1 and whether that Article is consequently applicable in the
instant case.
1. The parties’ submissions
(a) The Government
As
their main submission, the Government disputed that there had been a
“possession” and pointed out that the licence awarded in
1999 to the applicant company had not ipso facto conferred an
entitlement to have frequencies allocated by the Ministry;
accordingly, it had not had a legitimate expectation of obtaining any
frequencies. In addition, the domestic courts had declared
inadmissible the applicant company’s request for the allocation
of the frequencies.
The
Government further noted that the Convention did not protect
non-existent rights lacking any legal basis. According to the Court’s
case law, neither a “genuine dispute” nor an
“arguable claim” satisfied the requirements of a
“possession” within the meaning of the Convention. No
“legitimate expectation” protected by the Convention
arose where there had been a dispute as to the correct interpretation
and application of domestic law and where the applicants’
submissions had been rejected by the national courts (Kopecký
v. Slovakia [GC], no. 44912/98, § 50, ECHR 2004-IX).
In
addition, the applicant company could have purchased the frequencies
on the market under section 1 of Law no. 66 of 20 March 2001 (see
paragraph 63 above). In the Government’s submission, the
subject of the application was not the allocation of the frequencies
but the allegedly insufficient amount of compensation awarded at
national level. Lastly, the Government noted that the licence had
never been withdrawn or revoked.
(b) The applicant company
The
applicant company contested the Government’s arguments and
submitted that the right of access to and use of broadcasting
frequencies, allowing the exercise of freedom of expression and the
pursuit of an economic activity, constituted an asset and thus fell
within the scope of a “possession” within the meaning of
Article 1 of Protocol No. 1.
2. The Court’s assessment
(a) General principles
The
Court reiterates that the concept of “possessions” in the
first paragraph of Article 1 of Protocol No. 1 has an autonomous
meaning which is not limited to the ownership of material goods and
is independent from the formal classification in domestic law. In the
same way as material goods, certain other rights and interests
constituting assets can also be regarded as “property rights”,
and thus as “possessions” for the purposes of this
provision. In each case the issue that needs to be examined is
whether the circumstances of the case, considered as a whole,
conferred on the applicant title to a substantive interest protected
by Article 1 of Protocol No. 1 (see Iatridis v. Greece
[GC], no. 31107/96, § 54, ECHR 1999-II; Beyeler v. Italy
[GC], no. 33202/96, § 100, ECHR 2000-I; and Broniowski v.
Poland [GC], no. 31443/96, § 129, ECHR 2004-V).
Article
1 of Protocol No. 1 applies only to a person’s existing
possessions. Thus, future income cannot be considered to constitute
“possessions” unless it has already been earned or is
definitely payable. Further, the hope that a long-extinguished
property right may be revived cannot be regarded as a “possession”;
nor can a conditional claim which has lapsed as a result of a failure
to fulfil the condition (see Gratzinger and Gratzingerova v. the
Czech Republic (dec.) [GC], no. 39794/98, § 69, ECHR
2002-VII).
However,
in certain circumstances, a “legitimate expectation” of
obtaining an asset may also enjoy the protection of Article 1 of
Protocol No. 1. Thus, where a proprietary interest is in
the nature of a claim, the person in whom it is vested may be
regarded as having a “legitimate expectation” if there is
a sufficient basis for the interest in national law, for example
where there is settled case-law of the domestic courts confirming its
existence. However, no “legitimate expectation” can be
said to arise where there is a dispute as to the correct
interpretation and application of domestic law and the applicant’s
submissions are subsequently rejected by the national courts (see
Kopecký, cited above, § 50).
(b) Application of the above principles in
the instant case
The
Court observes at the outset that from 28 July 1999 the applicant
company held a licence for nationwide terrestrial television
broadcasting. The licence authorised it to install and operate an
analogue television network (see paragraph 9 above). The Italian
administrative courts found that this did not confer on the applicant
company a personal right (diritto soggettivo) to be allocated
broadcasting frequencies but only a legitimate interest (interesse
legittimo), that is, an individual position indirectly protected
as far as was consistent with the public interest. Accordingly, the
applicant company’s sole entitlement was to have its request
for frequencies dealt with by the Government in a manner consistent
with the criteria laid down by domestic law and the CJEU (see the
Regional Administrative Court’s judgment of 16 September 2004,
paragraph 25 above, and the Consiglio di Stato’s
decision no. 2622/08 of 31 May 2008, paragraph 37 above).
As
the Court has noted in relation to Article 10 of the Convention, in
view of the terms of the licence and the legislative framework in
place at the time, the applicant company could reasonably have
expected the authorities, within the twenty-four months following 28
July 1999, to take the necessary legal measures to regulate its
terrestrial broadcasting activities. Provided that it upgraded its
installations as it was required to do, the applicant company should
then have been entitled to transmit television programmes (see
paragraph 145 above). It therefore had a “legitimate
expectation” in that regard. It is true that, as the Government
noted, the administrative courts refused the applicant company’s
requests to be allocated frequencies. However, that decision did not
entail a rejection of the applicant company’s request on the
merits but resulted from the general rule in Italian law to the
effect that the administrative courts cannot take certain measures in
place of the administrative authorities (see paragraph 37 above).
Furthermore,
in its judgment of 31 January 2008 the CJEU held as follows:
“... On that point, it must be stated that, in the
area of television broadcasting, freedom to provide services, as
enshrined in Article 49 EC and implemented in this area by the NCRF,
requires not only the grant of broadcasting authorisations, but also
the grant of broadcasting radio frequencies. An operator cannot
exercise effectively the rights which it derives from Community law
in terms of access to the television broadcasting market without
broadcasting radio frequencies.”
The
Court agrees with this analysis. It further notes that, as it has
previously held, the withdrawal of a licence to carry on business
activities amounts to interference with the right to peaceful
enjoyment of possessions as enshrined in Article 1 of Protocol No. 1
to the Convention (see Tre Traktörer AB v. Sweden, 7
July 1989, § 53, Series A no. 159; Capital Bank AD v.
Bulgaria, no. 49429/99, § 130, ECHR 2005-XII; Rosenzweig
and Bonded Warehouses Ltd v. Poland, no. 51728/99, § 49, 28
July 2005; and Bimer S.A. v. Moldova, no. 15084/03, § 49,
10 July 2007). Although the licence was not in fact withdrawn in the
instant case, the Court considers that, without the allocation of
broadcasting frequencies, it was deprived of its substance.
The
Court thus considers that the interests associated with exploiting
the licence constituted property interests attracting the protection
of Article 1 of Protocol No. 1 (see, mutatis mutandis, Tre
Traktörer AB, cited above, § 53).
It
therefore finds that the applicant company’s legitimate
expectation, which was linked to property interests such as the
operation of an analogue television network by virtue of the licence,
had a sufficient basis to constitute a substantive interest and hence
a “possession” within the meaning of the rule laid down
in the first sentence of Article 1 of Protocol No. 1, which is
therefore applicable in the present case (see, mutatis mutandis,
Stretch v. the United Kingdom, no. 44277/98, §§
32-35, 24 June 2003, and Bozcaada Kimisis Teodoku Rum Ortodoks
Kilisesi Vakfı v. Turkey (no. 2), nos. 7646/03,
37665/03, 37992/03, 37993/03, 37996/03, 37998/03, 37999/03 and
38000/03, § 50, 6 October 2009).
The
Court observes that this complaint is not manifestly ill-founded
within the meaning of Article 35 § 3 (a) of the Convention. It
further notes that it is not inadmissible on any other grounds. It
must therefore be declared admissible.
B. Merits
1. The parties’ submissions
(a) The applicant company
The
applicant company submitted that the Government’s conduct
amounted to an expropriation of possessions for the purposes of
Article 1 of Protocol No. 1, in so far as the Government had not only
unjustifiably failed to allocate the frequencies but had also refused
to give effect to the licence awarded following a lawful public
tendering procedure.
The
applicant company contended that the expropriation had no connection
with the public interest but had served Mediaset’s private
interests by using frequencies that should have been relinquished in
its favour as the legitimate licence holder. Moreover, the
expropriation had not been “subject to the conditions provided
for by law”. Pursuant to Law no. 249/1997, the relevant
frequencies should have been relinquished in favour of the successful
bidder in the tendering procedure, namely Centro Europa 7 S.r.l.
However, a number of transitional legislative measures had prevented
the company from having access to the frequencies.
The
applicant company further submitted that the compensation awarded at
national level did not reflect the value of the expropriated
property. To determine the loss of earnings resulting from lost
opportunities, the Court should consider not only the delay in
allocating the frequencies, but also the fact that it had been
impossible to compete with other companies in 1999, at a time when
the market had been more limited than today. The applicant company
further noted that the Consiglio di Stato, referring to the
Constitutional Court’s finding that 31 December 2003
constituted a reasonable date for the expiry of the transition
period, had taken into account only the damage sustained after 2004,
thereby disregarding five years of the violation. Lastly, the
applicant company noted that, according to the Consiglio di
Stato’s finding, the award of the licence had not conferred
the immediate right to engage in the corresponding economic activity,
and that the compensation should therefore have been calculated on
the basis of the legitimate expectation of being allocated
frequencies by the appropriate authorities.
(b) The Government
The
Government contested the applicant company’s arguments and
objected to the “financial” nature of the application.
2. The Court’s assessment
Article
1 of Protocol No. 1, which guarantees the right to the protection of
property, contains three distinct rules: “the first rule, set
out in the first sentence of the first paragraph, is of a general
nature and enunciates the principle of the peaceful enjoyment of
property; the second rule, contained in the second sentence of the
first paragraph, covers deprivation of possessions and subjects it to
certain conditions; the third rule, stated in the second paragraph,
recognises that the Contracting States are entitled, amongst other
things, to control the use of property in accordance with the general
interest ... The three rules are not, however, ‘distinct’
in the sense of being unconnected. The second and third rules are
concerned with particular instances of interference with the right to
peaceful enjoyment of property and should therefore be construed in
the light of the general principle enunciated in the first rule”
(see, among other authorities, James and Others v. the United
Kingdom, 21 February 1986, § 37, Series A no. 98, and
Beyeler, cited above, § 98).
The
applicant company submitted that it had been “deprived of its
possessions” in the present case. However, the Court cannot
accept that argument. There has been no expropriation of the
applicant company’s substantive interest in operating an
analogue television network, as is shown by the fact that it is now
able to broadcast television programmes. Nevertheless, the
possibility of engaging in the activity corresponding to the licence
was affected by several measures which, in essence, were aimed at
delaying the start-up date; this, in the Court’s view,
represents a means of controlling the use of property, to be examined
from the standpoint of the second paragraph of Article 1 of Protocol
No. 1.
The
first and most important requirement of Article 1 of Protocol No. 1
is that any interference by a public authority with the peaceful
enjoyment of possessions should be lawful (see Iatridis, cited
above, § 58, and Beyeler, cited above, § 108). In
particular, the second paragraph recognises that States have the
right to control the use of property, provided that they exercise
this right by enforcing “laws”. The principle of
lawfulness also presupposes that the relevant provisions of domestic
law are sufficiently accessible, precise and foreseeable in their
application (see, mutatis mutandis, Broniowski, cited
above, § 147).
However,
the Court has already held under Article 10 of the Convention that
the interference with the applicant company’s rights did not
have a sufficiently foreseeable legal basis within the meaning of its
case-law (see paragraph 156 above). It can only reach the same
finding in relation to Article 1 of Protocol No. 1, and this is
sufficient to conclude that there has been a violation of that
Article.
The
above conclusion dispenses the Court from reviewing whether the other
requirements of Article 1 of Protocol No. 1 were satisfied in the
present case, in particular whether the control of the use of the
applicant company’s “property” was “in
accordance with the general interest”.
VI. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
The
applicant company alleged a violation of its right to a fair hearing.
It relied on Article 6 § 1 of the Convention, the relevant parts
of which provide:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair ... hearing ... by an
independent and impartial tribunal ...”
A. The parties’ submissions
1. The Government
The
Government asserted that this complaint was manifestly ill founded,
since it was not the Court’s task to deal with errors of fact
or law allegedly committed by a domestic court and it was primarily
for the national authorities, notably the courts, to resolve problems
of interpretation of domestic legislation.
In
particular, Laws nos. 43/2004 and 112/2004 had not been taken into
account by the Regional Administrative Court, and the Consiglio di
Stato had referred to those laws in finding that the applicant
company was entitled to compensation. The Consiglio di Stato’s
judgment awarding it financial compensation proved, moreover, that
the State was independent and that the judgment of the CJEU had been
taken into account. The Government further noted that in judicial
proceedings it was possible for parties with common interests to
submit observations to the court drafted in partly similar terms, and
the drafting of technical submissions by a lawyer did not mean that
they were approved by the Government.
Lastly,
the Government observed that the Consiglio di Stato had
refused the applicant company’s request for an expert
valuation, holding that the burden of proof rested with the company
and that a court-ordered expert assessment could not compensate for a
failure to adduce evidence.
2. The applicant company
The
applicant company asserted that the various legislative amendments in
the course of the proceedings had infringed its right to a fair
hearing; it added that the law had not been correctly applied and
that the Constitutional Court’s judgments had not been
enforced. Furthermore, in the proceedings before the Consiglio di
Stato the Government had favoured the Mediaset group, thus
demonstrating the State’s lack of independence. In the
applicant company’s submission, this was illustrated by the
fact that the Government’s memorial had been based on the one
produced by the Mediaset group.
The
applicant company submitted that the Italian State had failed to set
up a clear and comprehensive regulatory framework, thereby infringing
the principles of lawfulness, transparency, non-discrimination, free
competition, impartiality and the rule of law. Lastly, the Consiglio
di Stato had failed to compensate it for the damage it had
actually sustained and to order an expert assessment of the amount it
was due.
B. The Court’s assessment
The
Court considers that part of the applicant company’s grievances
(in particular, those concerning the lack of a clear regulatory
framework, the legislative amendments and the failure to enforce the
Constitutional Court’s judgments) cover largely the same ground
as the complaint under Article 10 of the Convention. It is therefore
unnecessary to examine them separately under Article 6.
With
regard to the specific complaints concerning the proceedings in the
Consiglio di Stato, the Court reiterates that its duty is to
ensure the observance of the engagements undertaken by the
Contracting Parties to the Convention. In particular, it agrees with
the Government that it is not its function to deal with errors of
fact or law allegedly made by a national court, unless and in so far
as they may have infringed rights and freedoms protected by the
Convention (see, among many other authorities, García Ruiz
v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I). In
particular, the Court cannot itself assess the facts which have led a
national court to adopt one decision rather than another; otherwise,
it would be acting as a court of fourth instance and would disregard
the limits imposed on its action (see, mutatis mutandis,
Kemmache v. France (no. 3), 24 November 1994, § 44,
Series A no. 296-C). The Court’s sole task in connection with
Article 6 of the Convention is to examine applications alleging that
the domestic courts have failed to observe specific procedural
safeguards laid down in that Article or that the conduct of the
proceedings as a whole did not guarantee the applicant a fair hearing
(see, among many other authorities, Donadze v. Georgia,
no. 74644/01, §§ 30-31, 7 March 2006).
In
the instant case, the Court can see no evidence to suggest the
proceedings in the Consiglio di Stato were not conducted in
accordance with the requirements of a fair hearing. It further
reiterates that the requirements of independence and impartiality in
Article 6 of the Convention concern the court determining the merits
of the case and not the parties to the proceedings (see Forcellini
v. San Marino (dec.), no. 34657/97, 28 May 2002, and Previti
v. Italy (dec.), no. 45291/06, § 255, 8 December 2009), and
that it is for the national courts to assess the relevance of
proposed evidence (see, mutatis mutandis and in relation to
criminal proceedings, Previti, cited above, § 221, and
Bracci v. Italy, no. 36822/02, § 65, 13 October
2005).
It
follows that this complaint must be rejected as manifestly
ill founded, pursuant to Article 35 §§ 3 (a) and 4 of
the Convention.
VII. APPLICATION OF ARTICLE 41 OF THE CONVENTION
Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. The parties’ submissions
1. Pecuniary damage
(a) The applicant company
The
applicant company submitted that the damages awarded to it were
insufficient. It noted that the Consiglio di Stato had found
that compensation was payable in respect of a very limited part of
the immense damage suffered, had disregarded expert evidence adduced
by it and had failed to appoint independent experts. Thus, the
Consiglio di Stato had dismissed almost the entire claim for
compensation, declaring that neither legal costs nor start-up
expenses could be reimbursed.
As
regards start-up expenses, the applicant company observed that after
being awarded the broadcasting licence, it had quickly set up an
efficient and effective structure in order to become a serious player
in the commercial broadcasting market. In particular, it had leased
more than 20,000 square metres of television studios, equipped with
cutting-edge technology, which had been purchased in advance so that
it could start broadcasting promptly. It had also borne the costs of
setting up an audiovisual library by producing its own programmes, as
required by the licensing regulations.
As
regards loss of earnings, the inadequacy of the damages awarded by
the Consiglio di Stato was clear from a comparison of that
amount with the profits achieved by Retequattro, the over-quota
channel which should have relinquished the broadcasting frequencies
allocated to the applicant company. In assessing loss of earnings,
the Court should also take into account the fact that Centro Europa 7
S.r.l. had only recently entered the commercial broadcasting market,
at a time when analogue broadcasting was about to be entirely
superseded by digital terrestrial television and other broadcasting
techniques. Changes in the market since 1999 should therefore be
taken into consideration. The applicant company argued that it had
been illegally kept out of the commercial broadcasting market for a
considerable time, which had also harmed its prospects of promoting
its brand and reputation and acquiring expertise, audiovisual content
and other advantages associated with analogue broadcasting.
In
the light of the foregoing, and on the basis of documentary evidence,
the applicant company claimed EUR 2,174,130,492.55
(EUR 129,957,485.60 for losses sustained and EUR
2,045,214,475.00 for loss of earnings) – the sum it had sought
in the national proceedings – less the amount awarded by the
Consiglio di Stato, or a different amount, to be determined on
an equitable basis. Statutory interest should be payable on the
compensation.
(b) The Government
The
Government objected to the applicant company’s claims, which
they considered excessive. They pointed out that the Consiglio di
Stato had awarded it compensation. Moreover, the claims were a
matter of speculation and had no causal link with the alleged
violations of the Convention (Informationsverein Lentia and
Others, cited above, § 46; Radio ABC, cited above, §
41; and Meltex Ltd and Movsesyan, cited above, § 102).
The
Government further submitted that the applicant company had not set
up any installations for digital television broadcasting in the
period from December 2008 to January 2009. The relevant equipment had
not been purchased until after 2009.
2. Non-pecuniary damage
(a) The applicant company
The
applicant company claimed EUR 10,000,000 in respect of non-pecuniary
damage.
It
submitted that the Court should consider the following factors in
particular: (a) the considerable time that had elapsed; (b) the fact
that the applicant company could reasonably have expected the Italian
Government to give effect to the television broadcasting licence
within the relevant time-limits; (c) the frustration and anxiety
arising from being a powerless witness to the development of the
television broadcasting market without being able to be a stakeholder
in it, and the loss of a number of profitable opportunities; (d) the
substantial financial implications; (e) the harm to the company’s
reputation on account of the position of the persons involved; (f)
the company’s serious concerns at being unable to catch up with
its competitors, which had consolidated their position in the
analogue broadcasting and related markets; (g) the conditions of
uncertainty in which the applicant company had had to take strategic
decisions; (h) the obstacles and hurdles that its manager had had to
overcome; and (i) the frustration arising from the Government’s
repeated and blatant disregard of the judgments of the Constitutional
Court and the CJEU and of the demands of the European institutions.
(b) The Government
The
Government objected to the applicant company’s claims, which
they considered excessive.
3. Costs and expenses
(a) The applicant company
Submitting
documentary evidence, the applicant company sought the reimbursement
of the legal costs incurred at both national and European level in
seeking to give effect to the licence and to be able to engage
properly in economic activities in the television broadcasting
market.
It
pointed out that it had had to contend not only with the dominant
commercial broadcaster in Italy, but also with the Italian Government
itself for over ten years, since during that period, the owner of
Mediaset – the broadcasting group to which the over-quota
channel Retequattro belonged – had also served several terms as
Prime Minister.
Accordingly,
the applicant company claimed EUR 1,023,706.35 for the costs incurred
at national level and EUR 200,000 for those incurred before the
Court.
(b) The Government
The
Government objected to the applicant company’s claims.
B. The Court’s assessment
1. Pecuniary and non-pecuniary damage
The
Court observes that it has found two violations in the present case.
Firstly, the interference with the applicant company’s exercise
of its right to impart information and ideas within the meaning of
Article 10 of the Convention resulted from legislative measures which
did not satisfy either the foreseeability requirement or the State’s
obligation to guarantee effective pluralism (see paragraph 156
above). Secondly, the applicant company could legitimately have
expected the authorities, within the twenty-four months following
28 July 1999, to take the necessary legal measures to regulate
its television broadcasting activities, thereby enabling it to
transmit programmes (see paragraph 175 above). For the purposes of
Article 1 of Protocol No. 1, that expectation constituted a
“possession” (see paragraph 178 above), the use of which
was controlled by the same laws found to have been insufficiently
foreseeable in relation to Article 10 (see paragraph 188 above).
However, the Court has not examined whether the regulations in issue
were “in accordance with the general interest” (see
paragraph 189 above) and whether the interference with the applicant
company’s right to impart information and ideas pursued a
legitimate aim and was necessary in a democratic society for
achieving that aim (see paragraph 158 above).
In
the instant case, the Court is unable to establish the precise extent
to which the violations it has found affected the applicant company’s
property rights, having regard, in particular, to the specific
features of the Italian audiovisual market and the absence of a
comparable commercial situation in the market in question.
The
Court further notes that the applicant company sustained damage on
account of the prolonged uncertainty, resulting from the lack of
precision of the domestic legal framework, as to the date on which it
could be allocated the frequencies and, as a result, start operating
on the commercial television broadcasting market. The applicant
company nevertheless made certain investments on the basis of the
licence. The Court considers that the compensation awarded by the
Consiglio di Stato, covering solely the period from 2004 to
2009, cannot be regarded as sufficient, especially as no expert
valuation was ordered by the domestic courts to quantify the losses
sustained and the loss of earnings.
The
Court observes that the Government simply contested the applicant
company’s claims by describing them as excessive.
With
regard to the losses sustained, the Court notes that the applicant
company has not shown that all the investments it made were necessary
to operate under the licence it had been granted. As
to the alleged loss of earnings, the
Court finds that the applicant company did indeed suffer a loss of
this nature as a result of its inability to derive any profit
whatsoever from the licence over a period of many years. It
considers, however, that the circumstances of the case do not
lend themselves to a precise assessment of pecuniary damage, since
this type of damage involves many uncertain factors, making it
impossible to calculate the exact amounts capable of affording fair
compensation.
Without speculating on the
profits which the applicant company would have achieved if the
violations of the Convention had not occurred and if it had been able
to broadcast from 2001, the Court observes that the company suffered
a real loss of opportunities (see, mutatis mutandis, Gawęda,
cited above, § 54). It should also be noted that the
applicant company intended to embark on an entirely new commercial
venture, the potential success of which was dependent on a variety of
factors whose assessment falls outside the Court’s
jurisdiction. It notes in this connection that where a loss of
earnings (lucrum cessans) is alleged, it must be conclusively
established and must not be based on mere conjecture or probability.
In
those circumstances, the Court considers it appropriate to award a
lump sum in compensation for the losses sustained and the loss of
earnings resulting from the impossibility of making use of the
licence. It must also take into account the fact that the applicant
company was awarded compensation at domestic level in respect of part
of the period concerned (see paragraph 48 above).
In
addition, the Court considers that the violations it has found of
Article 10 of the Convention and Article 1 of Protocol No. 1 in the
instant case must have caused the applicant company prolonged
uncertainty in the conduct of its business and feelings of
helplessness and frustration (see, mutatis mutandis, Rock
Ruby Hotels Ltd v. Turkey (just satisfaction), no. 46159/99,
§ 36, 26 October 2010). In this connection, it reiterates that
it may award pecuniary compensation for non-pecuniary damage to a
commercial company. Non-pecuniary damage suffered by such companies
may include aspects that are to a greater or lesser extent
“objective” or “subjective”. Aspects that may
be taken into account include the company’s reputation,
uncertainty in decision-planning, disruption in the management of the
company (for which there is no precise method of calculating the
consequences) and lastly, albeit to a lesser degree, the anxiety and
inconvenience caused to the members of the management team (see
Comingersoll S.A. v. Portugal, [GC], no. 35382/97, § 35,
ECHR 2000 IV).
Having
regard to all the above factors, and making its assessment on an
equitable basis, the Court considers it reasonable to award the
applicant company an aggregate sum of EUR 10,000,000, covering all
heads of damage, plus any tax that may be chargeable on that amount.
2. Costs and expenses
The
Court reiterates that only legal costs and expenses found to have
been actually and necessarily incurred and to be reasonable as to
quantum are recoverable under Article 41 of the Convention (see
Nikolova v. Bulgaria [GC], no. 31195/96, § 79, ECHR
1999-II).
With
regard to the costs incurred in the domestic proceedings, the Court
observes that before applying to the Convention institutions, the
applicant company exhausted the domestic remedies available to it
under Italian law, since it instituted two sets of proceedings in the
administrative courts, the complexity and length of which must be
emphasised. The Court therefore accepts that the applicant company
incurred expenses in seeking redress for the violations of the
Convention through the domestic legal system (see, mutatis
mutandis, Rojas Morales v. Italy, no. 39676/98, § 42,
16 November 2000).
With
regard to the expenses relating to the proceedings before it, the
Court notes that the present case is of some complexity, since it
required examination by the Grand Chamber, several sets of
observations and a hearing. It also raises important legal issues.
Having
regard to the material in its possession and its relevant practice,
the Court considers it reasonable to award the applicant company an
aggregate sum of EUR 100,000 in respect of all costs and expenses.
3. Default interest
The
Court considers it appropriate that the default interest rate should
be based on the marginal lending rate of the European Central Bank,
to which should be added three percentage points.
FOR THESE REASONS, THE COURT
Upholds, unanimously, the Government’s
preliminary objection that the application is incompatible ratione
personae with the provisions of the Convention in so far as it
was lodged by Mr Di Stefano and accordingly declares this part
of the application inadmissible;
Dismisses, by a majority, the Government’s
preliminary objection that the application was out of time;
Dismisses, by a majority, the Government’s
other preliminary objections;
Declares, by a majority, the application by the
applicant company admissible as regards the complaints under
Articles 10 and 14 of the Convention;
Declares, by a majority, the application by the
applicant company admissible as regards the complaint under
Article 1 of Protocol No. 1;
Declares, unanimously, the remainder of the
application by the applicant company inadmissible;
Holds, by sixteen votes to one, that there has
been a violation of Article 10 of the Convention;
Holds, unanimously, that it is not necessary to
examine separately the complaint under Article 14 of the Convention
in conjunction with Article 10;
Holds, by fourteen votes to three, that there
has been a violation of Article 1 of Protocol No. 1;
Holds, by nine votes to eight, that the
respondent State is to pay the applicant company, within three
months, EUR 10,000,000 (ten million euros), plus any tax that may be
chargeable, in respect of pecuniary and non-pecuniary damage;
Holds, unanimously, that the respondent State
is to pay the applicant company, within three months, EUR 100,000
(one hundred thousand euros), plus any tax that may be chargeable to
the applicant company, in respect of costs and expenses;
Holds, unanimously, that from the expiry of the
above-mentioned three months until settlement simple interest shall
be payable on the above amounts at a rate equal to the marginal
lending rate of the European Central Bank during the default period
plus three percentage points;
Dismisses, unanimously, the remainder of the
applicant company’s claim for just satisfaction.
Done in English and in French, and delivered at a public hearing in
the Human Rights Building, Strasbourg, on 7 June 2012.
Vincent Berger Françoise
Tulkens
Jurisconsult President
In accordance with Article 45 § 2 of the Convention and Rule 74
§ 2 of the Rules of Court, the following separate opinions are
annexed to this judgment:
(a) Concurring
opinion of Judge Vajić;
(b) Joint
partly dissenting opinion of Judges Sajó, Karakaş, and
Tsotsoria, joined in part by Judge Steiner;
(c) Joint
partly dissenting opinion of Judges Popović and Mijović;
(d) Dissenting
opinion of Judge Steiner.
F.T.
V.B.
CONCURRING OPINION OF JUDGE VAJIĆ
I
have voted with the majority in favour of finding a violation of
Article 1 of Protocol No. 1 to the Convention. However, I do not
agree with the interpretation of “legitimate expectation”
as set out in the judgment, in particular in paragraph 173. With all
due respect, I think that the following passage of this paragraph is
misleading (see Kopecký v. Slovakia
[GC], no. 44912/98, ECHR 2004 IX):
“However, in certain circumstances, a ‘legitimate
expectation’ of obtaining an asset may also enjoy the
protection of Article 1 of Protocol No. 1. Thus, where a
proprietary interest is in the nature of a claim, the person in whom
it is vested may be regarded as having a ‘legitimate
expectation’ if there is a sufficient basis for the interest in
national law, for example where there is settled case-law of the
domestic courts confirming its existence.”
According
to the established case-law, if a person has a proprietary interest
in the nature of a claim which has a sufficient basis in national
law, he or she has an asset capable of attracting the protection of
Article 1 of Protocol No. 1 (see Kopecký, cited above,
§ 42). It is therefore unnecessary to introduce the notion of
legitimate expectation, which, on the basis of Pine Valley
Developments Ltd and Others v. Ireland (29 November 1991,
Series A no. 222) and Stretch v. the United Kingdom
(no. 44277/98, 24 June 2003),
applies in a far more limited set of circumstances.
Moreover,
the judgment actually states at paragraph 178:
“The Court thus considers that the interests
associated with exploiting the licence constituted property interests
attracting the protection of Article 1 of Protocol No. 1 (see,
mutatis mutandis, Tre Traktörer AB, cited above, §
53).”
Therefore,
I do not see the need to refer in addition to a legitimate
expectation.
JOINT PARTLY DISSENTING OPINION OF JUDGES SAJÓ,
KARAKAŞ AND TSOTSORIA, JOINED IN PART BY JUDGE STEINER
We
are in full agreement with the present judgment except as to the
award of just satisfaction. We do not think that the award is
excessive, nor do we find it insufficient. Instead, we consider that
the question of the application of Article 41 is not ready for
decision.
While
the Consiglio di Stato found that there was a causal link
between the conduct of the administrative authorities and the damage
alleged by the applicant company, it considered that the compensation
should be calculated on the basis of the legitimate expectation of
being allocated the broadcasting frequencies by the appropriate
authorities. For this reason, in determining the losses sustained the
Consiglio di Stato considered that the applicant company
should have known that it was unlikely to obtain the frequencies in
question and it did not order an expert valuation. This approach was
rejected by the Court (see paragraph 175 of the judgment). The Court
found that the licence granted to the applicant company had been
deprived of its substance. Furthermore, the Court itself found the
refusal to order an expert valuation to be unacceptable (see
paragraph 216 in fine).
The
applicant company indicated that it had incurred expenses including
the renting of studios and the equipment needed to pursue the
corresponding economic activity, and it submitted an expert
assessment of its loss of profits based on the profits achieved by
Retequattro, the over-quota channel which should have relinquished
the frequencies allocated to the applicant company.
In
the absence of an expert opinion which would have shed at least some
light on the necessity and pertinence of the alleged expenses and the
expected loss of profit, we find it impossible to determine the
damage sustained by the applicant company. Such an expert opinion,
subject to an appropriate possibility for the parties to challenge
it, would have enabled us to calculate at least the approximate
amounts capable of redressing the damage. Moreover, this procedure
would have opened the way for a friendly settlement which would have
satisfied the requirements of fair compensation.
JOINT PARTLY DISSENTING OPINION OF JUDGES POPOVIĆ
AND MIJOVIĆ
We
respectfully disagree with the majority on two major points. Firstly,
we consider that the first applicant in this case, the limited
liability company Centro Europa 7 S.r.l., did not have victim status.
Secondly, the applicant company was on no account entitled to bring a
case before the Court for the sole purpose of rectifying the amount
it had been awarded at domestic level. Our reasons are the following.
The
majority of our colleagues stated in paragraph 45 of the judgment
that in a judgment of 20 January 2009 the Consiglio di Stato
awarded the applicant company the amount of EUR 1,041,418 in
compensation. This clearly proves that the loss sustained by the
applicant company has been compensated. There were therefore no
grounds for applying to the Court, which the applicant company did on
16 July 2009. The applicant company lost its victim status because it
had been afforded compensation at the national level. Its application
lodged with the Court had the goal of rectifying the amount awarded
by the national court.
The
Court laid down the rule concerning the amount of compensation as
early as in 1986, in the case of Lithgow and Others v. the United
Kingdom (8 July 1986, § 102, Series A no. 102). The rule
says that the amount of compensation falls within the margin of
appreciation of the member State, unless the amount in question may
be considered “grossly inadequate”.
In
its subsequent case-law the Court clarified the rule, stating that
even a sum which was grossly inadequate (and might in extreme cases
amount to zero!) could be found acceptable where there were
exceptional circumstances (see Jahn and Others v. Germany
[GC], nos. 46720/99, 72203/01 and 72552/01, § 94, ECHR
2005-VI).
In
the present case the applicant company’s intention was to
counter the general rule set forth in Lithgow and Others by
referring to the rule laid down in Scordino v. Italy
(no. 1) ([GC], no. 36813/97, § 103, ECHR 2006 V),
Cocchiarella v. Italy ([GC], no. 64886/01, ECHR
2006 V) and Musci v. Italy ([GC], no.
64699/01, ECHR 2006 V). The latter rule, however, falls within
the scope of the main rule stemming from Lithgow and Others,
for the Court held in Scordino (no. 1) (cited above, §
103) that the compensation awarded “was inadequate”. It
is therefore clear that the rule in Scordino (no. 1) merely
followed the previous case-law, that is, the rule in Lithgow and
Others, which in our view applies to the present case.
The
assessment of the facts in Scordino (no. 1) was different from
the assessment in Lithgow and Others, but the rule remained
unaltered. In other words, the term “inadequate” in the
Scordino (no. 1) judgment (cited above, § 103) can only
be understood in the light of the Lithgow rule, that is,
attaining the standard of “grossly inadequate” in respect
of proportionality. The Court basically took the same stance in
paragraph 98 of Scordino (no. 1), where it referred,
inter alia, to Lithgow and Others, invoking the general
rule on the proportionality of compensation.
Besides,
there is no reason whatsoever to find that the compensation in the
present case was inadequate. In our view, the present case can be
distinguished from Scordino (no. 1). The latter case concerned
the expropriation of land, whereas the case at hand is about a
broadcasting licence for television programmes. The fluctuations of
market prices for the two goods mentioned may be comparable, but they
are not identical and the domestic judiciary is better placed than an
international court to assess the amount due in compensation. The
applicants in Scordino (no. 1) (cited above, § 85) relied
on the fact that the flats built on the expropriated land could
subsequently be sold and therefore bring a profit to private
individuals. However, in the present case there is not enough reason
to hold that the sum awarded in compensation to the applicant company
at domestic level was inadequate.
We
would also underline the fact that the amount of money awarded in
compensation to the applicant company at domestic level was indeed
considerable. It could by no means be labelled as “grossly
inadequate”. The Court cannot speculate on the applicant
company’s potential success in business, the fact on which the
sum awarded in compensation could allegedly have depended. The
applicant company’s position was properly assessed by the
national court of law, which found in its favour. What is more, the
majority did not base their ruling on an expert valuation of the loss
allegedly sustained by the applicant company, but merely awarded it a
lump sum. Therefore, even if the applicant company could have been
considered to have preserved its victim status – a position
which we do not find to be justified – we believe that the
Court should have observed the margin of appreciation of a member
State.
DISSENTING OPINION OF JUDGE STEINER
(Translation)
I am
unable to share the opinion of the majority on the two fundamental
aspects of this case: the alleged violations of Article 10 and of
Article 1 of Protocol No. 1.
The
factual situations underlying the applicant company’s
complaints are, in my view, clearly distinct.
As
regards the first of these situations, relating to the alleged
inability to broadcast on the basis of the 1999 decision of
principle, it falls outside the Court’s jurisdiction since it
does not comply with the six-month rule.
According
to the Government, in its decision of 31 May 2008 the Consiglio di
Stato settled with final effect the issue arising from the
failure to allocate frequencies on the basis of the 1999 decision.
A
careful reading of the reasoning and, above all, the operative
provisions of the Consiglio di Stato’s decision appears
to support that argument. Furthermore, the judgment of January 2009
confirms this approach to the issue, since it deals only with the
residual aspect of the applicant company’s claim in relation to
Article 1 of Protocol No. 1.
On
this point, the Grand Chamber’s judgment (see paragraphs
100-104) does not appear to reflect the reality of the legal
situation.
Firstly,
in my view we are not dealing with a continuing situation since, as I
have mentioned, the situation in issue had been clarified by the
decision of 31 May 2008. From that date it had become obvious that
the applicant company was no longer lawfully entitled to contest the
merits of the non-allocation of the frequencies envisaged by the 1999
decision.
It
was accordingly required to lodge its application in relation to this
issue within the six-month time-limit.
I
would point out that there is consistent and long-established
case-law on the subject.
Thus,
not only does the six-month rule result from a special provision and
constitute an element of legal stability, it is also a matter of
public policy and cannot be disregarded by States on their own
initiative.
The
six-month rule is, according to our case-law, a question which is
linked to observance of the European public order and which can be
raised by the Court of its own motion at any stage of the
proceedings.
The
subsidiarity principle, which is constantly mentioned as the guiding
principle of the supervisory system, requires the national courts to
be given precedence in the interpretation of domestic law.
I
would emphasise in this connection that the Court’s
“jurisdiction to verify that domestic law has been correctly
interpreted and applied is limited” and that “it is not
its function to take the place of the national courts, its role being
rather to ensure that the decisions of those courts are not flawed by
arbitrariness or otherwise manifestly unreasonable” (see
Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 83,
ECHR 2007-I).
What
holds true for the assessment of compliance with domestic law also
applies to the determination of what was the final domestic decision
in respect of a particular complaint, unless the decision of the
Consiglio di Stato in the present case is found to have
been arbitrary or manifestly unreasonable.
Next,
I consider that the judgment wrongly mixes up two distinct aspects.
The
assessment of the amount to be awarded to the applicant company in
damages concerned the quantification of the damage suffered and not
the allocation of frequencies, that issue having been res judicata
since 31 May 2008.
As
regards the second factual situation, relating to respect for the
right of property, the question seems clear to me. The reasons given
by the Consiglio di Stato in its judgment of 20 January 2009
are convincing and reasonable.
The
Consiglio di Stato found the State liable for the lengthy
delay in allocating the frequencies. It awarded damages on that
account for the “losses sustained”. It took care to draw
attention to the conduct of the applicant company, which should have
taken the context into account and been cautious in its investments
pending the allocation of the frequencies.
As to
the damage corresponding to “loss of earnings”, the
Consiglio di Stato observed that there was not the slightest
evidence to support the assumptions and hypotheses put forward by the
applicant company. Nevertheless, it made an award to the company
under this head, determined on an equitable basis.
I
consider that, more than in any other circumstances, the State should
be afforded a wide margin of appreciation in determining the damage
resulting from an “unlawful act”, in accordance with the
principles governing non-contractual liability.
As
regard the question of the application of Article 41, I join the
partly dissenting opinion of Judges Sajó, Karakaş, and
Tsotsoria.
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