Risk to media pluralism in Hungary after creation of media giant meets soft EU response

Risk to media pluralism in Hungary after creation of media giant meets soft EU response
Budapest, credit: unsplash/Thomas Winkler

Reports financed by the European Commission show increasing risks and threats to media pluralism and press freedom in Hungary

While the Commission “fully supports media freedom and pluralism within the scope of its competences through various initiatives”, it commented that, under the EU Treaty, it is the primary responsibility of member states to take action to protect media freedom and pluralism.

A new study (23 July) by the Centre for Media Pluralism and Media Freedom (CMPF) at the European University Institute in Florence showed that there has been a deterioration in media pluralism across all countries in the EU.

The CMPF study scored the countries according to the level of risk in four areas: basic protection, market plurality, political independence and social inclusiveness. The countries were scored in each area separately and not ranked according to a consolidated scorecard.

“We prefer the results to be analysed according to the single country context to better understand the risks for media pluralism in each country,” Professor Pier Luigi Parcu, director of CMPF, told The Brussels Times. “Our comparative report is mainly a general reference tool, indicating special weaknesses, best practices and rooms for policy improvements.”

Based on the four areas, the most worrisome general trends at present can be found (alphabetical order) in Albania, Bulgaria, Croatia, Cyprus, Czech Republic, Greece, Hungary, Malta, Poland, Romania, Slovenia, and Turkey, he added.

Hungary text book case

“The situation is bad in many of these countries in the list,” commented Marius Dragomir, Director of the Centre for Media, Data and Society (CMDS) at the Central European University. The university was forced by the Hungarian government to close down in Budapest and is moving to Vienna, where it will open again next month.

Another recent report (31 July) by the European Federation of Journalists (EFJ) and the International Press Institute (IPI) monitored the trends in media freedom since the outbreak of the pandemic in March. Overall, countries with existing authoritarian tendencies have taken advan­tage of the pandemic to further restrict the press freedom.

Of all countries in Europe the coronavirus crisis had “arguably the biggest effect on media freedom in Hungary”. New legislation against the spreading of “false” or “distorted” information, passed during the state of emergency in Hungary, caused uncertainty and self-censorship among media outlets and actors.

Inde­pendent media in Hungary already faced a precarious financial situation as a result of years of state-led market manipulation, according to the report. In another blow to media pluralism, the country’s Constitutional Court ruled in June that the merger in 2018 of more than 470 pro-government media was legal.

“If you look at what we define as ‘media capture’, a situation where government structures and officials along with oligarchs take control of the majority of the country’s media, then Hungary is a textbook case,” Marius Dragomir said.

The government has systematically brought the regulatory authorities, the public media, the state advertising funding mechanisms and most of the privately held media under its control. Unfortunately, this model is being imported by a growing number of countries in Europe and elsewhere, according to Dragomir.

Controversial media merger

In the CMPF country report on Hungary, news media concentration scored the highest risk at 84% out of 100%. A controversial element is the creation of a conglomerate of pro-government media called the Central European Press and Media Foundation or KESMA after its acronym in Hungarian.

The new media giant includes television and radio channels, nationwide and local newspapers, tabloids, magazines, and online news sites. The report described the country’s Media Council and Competition Authority as weak bodies, uncapable to protect media pluralism and prevent mergers that might distort competition in the media market.

“This example highlights that when even the arbitrary interpretation of the competition and media law can’t help, the government can simply solve this problem with other law. The reasons behind the merge is yet to be investigated, because the foundation-form still requires certain level of transparency of personnel and revenues,” CMPF writes.

In a special report last year, at the request of the European Commission, CMPF was tasked to assess whether the establishment of KESMA amounted to an element of additional risk for media pluralism in the country and whether this additional risk is quantifiable.

The government described the merger as a matter of national importance. The specific aim of KESMA is “to promote those activities of the print, radio, TV and online sections of the Hungarian mass media which serve to build values and strengthen Hungarian national consciousness.” To date, KESMA, in effect, gathers the ownership rights of more than 470 different Hungarian media outlets.

CMPF concluded that the merger, which comprises media outlets from different media sectors, will exacerbate the already high overall risk to media pluralism in Hungary. It has already led to a mass-lay off of journalists.

The merger also consolidates political influence within KESMA since it includes some of the biggest beneficiaries of state advertising. According to figures in the CMPF country report on Hungary, “enormous amount of public money is spent by the government on self-advertising and propaganda”. In 2019, 75% of the total expenditure went to pro-government media (private and public).

EU position

The 2019 CMPF report on Hungary was limited to an assessment of the additional risk for media pluralism following the creation of KESMA. The Brussels Times asked the Commission if it plans to initiate any investigations of the media situation in the country.

“On the basis of the available information, the creation of KESMA itself, as well as the concentration of the media outlets, fall outside the Commission’s competence under the EU Merger Regulation, as it appears not to meet the relevant jurisdictional thresholds,” a Commission spokesperson replied yesterday (4 August).

The KESMA case no doubt affects media pluralism and competition in Hungary but it lacks an “European dimension”. The regulation prohibits mergers and acquisitions which would significantly reduce competition in the Single Market, for example if they would create dominant companies that are likely to raise prices for consumers.

The European Commission may also examine mergers which are referred to it from the national competition authorities of the EU member states but this unlikely to happen in this case.

“The creation of KESMA, with the approval of the local antitrust authority, is definitely a breach of European competition rules,” said Marius Dragomir, the media expert. “At the same time, the establishment of KESMA should also be investigated by the EU as a case of illegal state aid.”

On the last point, the Commission might agree. In fact, the Commission is currently investigating a state aid complaint dating from 2016, which relates to public service broadcasting in Hungary. The Commission has been in continuous contact with the Hungarian authorities. “These contacts are ongoing and the Commission cannot prejudge their outcome,” the spokesperson said.

M. Apelblat
The Brussels Times

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