Dragan Milic, Attorney at law

SRB | ENG


Photo: Miodrag Miša Ignjatović


 

HORIZONTAL MEDIA CONCENTRATION

Law on Public Information and Media regulates horizontal media concentration by restricting ownership and managerial rights, applying the criteria of circulation for print media and ratings for electronic media.

Thus LPIM stipulates the following:

In order to prevent the occurrence or strengthening of a predominant influence in the public information sector ‒ which considerably restricts media pluralism ‒ it is forbidden to merge the following:

  • Founding and management rights of two or more publishers of the daily newspapers publishing information from all areas of social life whose total annual circulation exceeds 50 % of sold or in another way realized newspaper circulation on the territory of the Republic of Serbia in a calendar year preceding the year of merging;
  • Founding or managerial rights of two or more publishers that provide audio and/or audio-visual services – if the ratings shares of these publishers in the calendar year preceding the merger would, when combined, exceed 35% of the total combined ratings of all publishers that provide services within their zone of coverage in a calendar year preceding the year of merging.

Merging of founding and/or management rights, means having a decisive influence on how the business is run in two or more publishers, especially in the capacity of controlling (parent) company, or controlling member or shareholder, based on the property or other ownership rights pertaining to a property or part thereof, based on the rights stemming from a contract, agreement or securities, based on claims or negotiable instruments or in accordance with business practice.

Paragraphs 1 and 2 of this Article are without prejudice to the provisions of the law governing protection of competition.

The Republic of Serbia also has a Law on Protection of Competition  (LPC), which regulates this field in detail and applies to all natural and legal persons in the Republic of Serbia, including media owners.

The concept and the types of related parties are also regulated by the Company Law  (CL).

LPIM envisages the parallel application of provisions of the Law on Protection of Competition regarding related parties, while the LPC points to Company Law provisions on related parties that are to be applied accordingly, unless they are contradictory.

As the LPIM does not cover related natural persons such as family members, provisions of the Company Law apply accordingly which exhaustively list those who are to be considered persons related with a natural person:

1) A blood relative in a straight line, a blood relative in a lateral line up to the third degree of kinship, the spouse or the de facto partner of such person;

2) The spouse or de facto partner and their blood relative up to the first degree of kinship;

3) Adoptive parents or children, as well as descendants of adoptive children;

4) Other persons who share a household with the person concerned


VERTICAL MEDIA CONCENTRATION

LPIM forbids the same legal person to engage in media publishing and distribution, but obliges a legal person to carry out its second activity through an affiliated legal person.

Under the LPIM , affiliated legal persons are persons that are affiliated in such a way so that one or more of them have the possibility of defining influence on the management of operations of the other legal person or other legal persons, and especially influence that arises from:

1) the role of controlling (parent) company, i.e., controlling member or shareholder, independently or through joint activity, according to the rules on affiliated companies within the meaning of the law that governs the positions of companies;

2) ownership or other kind of rights to property or part of property of another legal person;

3) a contract, agreement, or ownership rights to securities;

4) accounts receivable, security means, or business practice terms whose holder is or that are determined by a controlled person.

The same provision of the law stipulates that it is forbidden to acquire over 50 % of share in the authorized share capital between a publisher of a daily newspaper that publishes information from all areas of social life whose average realized circulation exceeds 50,000 copies a year, and a publisher that provides audio or audio-visual media services.


 

DECISION MAKING IN MEDIA CONCENTRATION 

In the case of print media and their online editions, the relevant ministry is responsible for identifying a threat to media pluralism. Under the Law on Electronic Media, the independent Regulatory Authority (REM) is responsible for electronic media.

When it is established that media pluralism has been threatened, the relevant Ministry / REM notifies the publisher about it and orders that proof of the actions taken in order to remove the causes of threat to media pluralism be submitted within six months of the day of receipt of the notification and informs the relevant register of media (kept with the Business Registers Agency) about the notification issued to the publisher.

If the medium fails to act in accordance with the issued notification, the Ministry/REM issues a decision ordering the Register to delete the medium in question from the register.

The Law on Electronic media envisages that the REM will not issue a license for the provision of media services to an electronic media if it determines that this would lead to a violation of media pluralism in terms of the LPIM.

Since print media and digital editions can be registered without prior approval, this provision does not apply to them.

In the event of any change in the ownership structure of the issued capital (changes of the founder or changes in the founder’s participation in the capital), the holder of the license for the provision of electronic media services has to report to the REM prior to the change.

If the Regulator determines that the planned changes in the ownership structure of the capital assets could lead to the violation of media pluralism, s/he shall recommend to the holder of the license for the provision of media services to coordinate changes in a way that would prevent this situation.

If the holder of the license for the provision of electronic media services does not act in accordance with the recommendation of the Regulator, which leads to a violation of media pluralism, the REM will revoke it is license.

In addition of the revocation of licenses, the Law on Electronic Media also prescribes economic offenses and offenses for license holders who threaten media pluralism.

If, following a REM warning, a media service provider fails to submit proof that it has eliminated the causes of threat to media pluralism, it shall be fined for economic offense with RSD 100,000 to RSD 1,000,000 and the responsible person employed with the media service provider shall be fined with RSD 10,000 to RSD 200,000.

If the media service provider is an entrepreneur rather than a legal person, he or she will be fined with RSD 10,000 to RSD 500,000 for an offense (instead of economic offense).

Regarding electronic media, media pluralism is also protected by the provisions stipulating the obligation of the operator whose electronic communications networks for transmission and distribution of media services is used by a significant number of end-users as the sole or primary means of receiving media contents, to transmit radio and television programs. At least once every three years the REM releases a list of programs that must be transmitted.

If an operator fails to act in accordance with the order of REM and does not transmit programs from the list, it will be fined for an economic offense with RSD 100,000 to RSD 1,000,000 while the responsible person employed with the operator will be fined with RSD 10,000 to RSD 200,000.

When it comes to print media and digital online editions, if a media publisher – a legal person, fails to comply with the warning from the relevant Ministry, it will be fined with RSD 100,000 to RSD 1,000,000, while the responsible person employed with the publisher will be fined with RSD 10,000 to RSD 200.000. 


 

BLIND SPOTS OF MEDIA MONOPOLY REGULATION

Under the LPIM, the ministry responsible for information is in charge of securing media pluralism for print media and digital online editions.

Under the Law on Electronic Media and LPIM , the Independent Regulatory Authority for Electronic Media (REM) is in charge of electronic media and it acts on the basis of regulations and procedures for preventing threats to media pluralism, which are more closely defined in the answer to the previous question.

LPIM also stipulates that its provisions are without prejudice to the provisions of the Law on Protection of Competition.

There is no overlapping between the LPIM and the Law on Electronic Media, because it is more or less precisely defined to which media services the prescribed rules and regulations apply.

However, the LPIM and the Law on Electronic Media do overlap with the Law on Protection of Competition, which is implemented at the same time, and this imprecision is a flaw in regulating the protection of media pluralism.