Fundamental rights review by the Court of Justice of the European Union has frequently been criticized for its rather terse reasoning. In its decision in Sky Österreich, however, the Court engaged in a remarkably comprehensive review of the compatibility of a provision of a directive with the freedom to exercise a profession.
The ruling may not be exceptional as to its outcome in comparison to cases such as Test-Achats, as the contested provision of EU law was not struck down by the Court. However, for those who consider (as I do) that a more extensive proportionality review is a useful tool to find a more appropriate balance between competing fundamental rights and public interests in EU law, Sky Österreich is certainly a welcome development which perhaps augurs an increasing refinement in the Court’s fundamental rights jurisprudence.
The case concerned the right of broadcasters to use short extracts from the transmitting broadcaster’s signal of events of high interest to the public for the purpose of short news reports; all this in cases where the transmitting broadcaster had acquired exclusive broadcasting rights for said events. Article 15 (6) of Directive 2010/13 sets out the conditions governing when a broadcaster may use such extracts. In addition, it sets the maximum compensation which the broadcaster with exclusive rights can request, which must not exceed the additional costs directly incurred in providing access. The Austrian Bundeskommunikationssenat had doubts about the compatibility of this provision with the right to property and the freedom to exercise an economic or commercial activity, enshrined in Article 17 and 16 of the Charter of Fundamental Rights of the European Union respectively.
Interestingly enough, the Court held first that the exclusive rights held by a broadcaster on a contractual basis could not confer an ‘established legal position’ which would enjoy the protection of the right to property under Article 17 of the Charter (para 38 ff.). I am, however, much more interested in the subsequent findings under Article 16 of the Charter.
For this purpose, the Court emphasized that the freedom to conduct a business was ‘not absolute, but must be viewed in relation to its social function’ (para 45). This should be ensured by respecting the principle of proportionality as enshrined in Article 52 (1) of the Charter (para 47). Then, the Court executed a step-by-step assessment of proportionality with exemplary discipline and clarity. It was as if the Judges had their constitutional law text books out beside them: the Court began by identifying the existence of a ‘legitimate aim in the general interest’. Here, the legitimate aim consisted of the freedom to receive information and the promotion of media pluralism under Article 11 of the Charter which was particularly relevant in the context of ‘events of high interest to the public’ (paras 51-52).
Then, the Court assessed the suitability of the measure, finding Article 15 (6) appropriate to ensure that any broadcaster was in a position to inform the general public of events of high interest, even if they were marketed on an exclusive basis by another broadcaster (para 53).
The Court proceeded to examine the necessity of the measure in quite some detail, finding for example that an alternative compensation regime which would allow pricing in the acquiring cost of exclusive rights could deter or prevent other broadcasters from requesting access for short extracts (para 55). The Court also took into account the discretion of the legislator for such questions, holding that in the circumstances of the case the EU legislator ‘could legitimately consider’ (para 57) that such legislation was necessary (see on the topic of margins of discretion of legislators and proportionality review Klatt and Meister, The Constitutional Structure of Proportionality, Oxford University Press 2012).
Finally, the Court examined the proportionality stricto sensu of Article 15 (6) of the Directive (paras 62-65). It found, however, no violation of proportionality stricto sensu, since the provision pursued an acceptable balance between the freedom to receive information and the freedom of pluralism of the media on the one hand and the freedom to conduct a business on the other. This was the case because the provision prohibits that the short extracts could be used for any kind of television programme other than general news, because it lays out the maximum length of such extracts and because it requires broadcasters to identify the source of extracts. The holders of exclusive rights were furthermore not prevented in any way from charging for the use of their rights in other contexts and could also reflect the absence of set-off possibilities excluded by Article 15(6) of the Directive in the framework of future contractual negotiations and thus the effective prices paid for the acquisition of exclusive rights. The increasing marketing of events of high interest to the public based on exclusive rights, on the other hand, definitely had a negative impact on the freedoms enshrined in Article 11 of the Charter according to the Court.
Admittedly, the case is not revolutionary. However, it represents an important step in a new direction: reading it, you could be forgiven for thinking it a case of the European Court of Human Rights, which is well known for its extended proportionality assessments – and that is not a bad thing. Arguably, ever more matters and interests – collective and individual ones – fall within the scope of EU law, as a result of which fundamental rights review has become an increasingly important task for the CJEU. Methodological refinement is thus certainly a welcome development.