Two key measures approved by the autonomous region’s authorities have come under the scrutiny of the competition authority: budgetary allocations for the provision of regional public broadcasting services and exemption from rent payments for property and state assets which the company uses in its day-to-day operations.
What is the substance of the authority’s claims?
Under the current State Aid Act, any financial or property concessions funded by state resources that confer economic advantages on a specific company may lead to a distortion of market conditions. The Competition Council has expressed doubts as to whether these measures comply with fair market rules.
Budgetary subsidies may create an uneven playing field for other media operators in the autonomous region. For the allocations to be deemed lawful, the authorities must prove that they strictly offset the costs of providing ‘services of general economic interest’ (the public service mandate) and do not serve to cross-subsidise the broadcaster’s commercial projects.
According to the department, rent-free property lease artificially reduces the operating costs of the municipal enterprise ‘GRT’, relieving the company of expenses that its private competitors are forced to cover themselves at market rates.
Context and implications
This investigation is taking place against a backdrop of heightened scrutiny of the broadcaster. Recently, the Moldovan Audiovisual Council assessed the risks to internal pluralism on GRT’s airwaves as ‘moderate’, whilst specifically highlighting the broadcaster’s significant dependence on the regional budget.
According to the audit, subsidies account for around 68.8 per cent of the company’s total funding, whilst advertising revenue has fallen below 1 per cent. Furthermore, the Moldovan Parliament has approved amendments to the Code on Audiovisual Media Services, which, for the first time at national legislative level, have established the legal framework and governance structure of GRT.
As part of the proceedings that have been initiated, the Gagauzia Main Financial Directorate and the management of the state-owned enterprise ‘GRT’ are required to provide the Competition Council with full economic justifications. If the Council deems the allocated aid to be incompatible with a competitive environment, the implementation of the measures will be blocked, and the broadcaster may be required to return the funds received to the budget.
This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.
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