Communicated on 4 May 2015
FIFTH SECTION
Applications nos. 24064/13 and 55592/13
TELERADIOKOMPANIYA ERA, TOV against Ukraine
and MISKA TELERADIOKOMPANIYA CHERNIVTSI,
TOV against Ukraine
lodged on 4 April 2013 and 12 August 2013 respectively
STATEMENT OF FACTS
The applicants, Era TV Company (application no. 24064/13) and Chernivtsi City TV Company (application no. 55592/13), are Ukrainian limited liability companies founded in 1998 and 2001, respectively.
The second applicant is represented before the Court by Ms L. V. Opryshko, a lawyer practising in Kyiv.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
1. Competition for licences on digital broadcasting
According to the Implementation of the Digital Broadcasting State Program, adopted by decision of the Cabinet of Ministers of Ukraine no. 1085 of 26 November 2008, Ukraine had to change from analogue to digital broadcasting by 2015. According to the Program, as of 2015 “the majority of analogue TV and radio transmitters had to stop functioning”.
The applicants have licences for analogue broadcasting issued by the National Television and Radio Broadcasting Council of Ukraine (“the National Council”) and valid till 30 April and 28 May 2017, respectively.
On 15 April 2011 the National Council, by the decisions nos. 821 and 822, announced a competition for licences for nationwide digital broadcasting on free channels of the multichannel TV networks MX-1, MX‑2, MX-3 and MX-5 (DVB-T2 standard (MPEG-4)) and adopted the rules of this competition.
On the same day, the National Council, by the decisions nos. 823 and 824, announced a competition for licences for regional digital broadcasting on free channels of the multichannel TV network MX-5 (DVB-T2 standard (MPEG-4)) and adopted the rules of this competition. The second applicant submitted that the decisions nos. 823 and 824 had not been registered by the Ministry of Justice of Ukraine as required by law.
In accordance with the rules of the competitions, the candidates had to submit a request for participation in the competitions and “other documents in compliance with Articles 8, 9, 10, 24, 26 and 28 of the TV and Radio Broadcasting Act”. The rules also contained the following requirements:
Decision no. 821
“b) Program concept requirements:
- Ukrainian language programs in accordance with the relevant legal requirements;
- it is recommended to broadcast socially important and information-analytical programs;
- it is recommended to broadcast children’s programs;
- to guarantee the cohesiveness of programs’ content;
- to broadcast advertising and information programs on digital broadcasting.”
Decision no. 824
“b) Program concept requirements:
- the Ukrainian language programs in accordance with the relevant legal requirements;
- it is recommended to broadcast socially important and information-analytical programs;
- it is recommended to broadcast children’s programs;
- to broadcast without retransmitting other broadcasters’ programs;
- to broadcast advertising and information programs on digital broadcasting.”
The competition rules also included technical requirements, inter alia, the requirement to sign a contract with a particular operator, and availability of financial resources for broadcasting.
Both applicants participated in the competitions.
On 16 - 18 August 2011 the National Council adopted more than 500 decisions on the results of the competitions.
The applicant companies were not attributed licences.
By a letter of 23 August 2011 the first applicant was informed about it. By a further letter of 2 September 2011 the first applicant was informed that all six members of the National Council had abstained from voting on its application.
2. Court proceedings instituted by the first applicant
On 19 September 2011 the first applicant instituted proceedings in the Kyiv Circuit Administrative Court against the National Council challenging, inter alia, the decision no. 822 to announce the competition and the decisions of 18 August 2011 nos. 2012-2048, according to which other companies had received licences to broadcast on the channels in question.
A number of other companies submitted similar claims.
The first applicant submitted to the national court a comparative table of fourteen TV companies which participated in the competition. According to this table, the winners were newly-founded companies or companies without much experience of broadcasting; they were very specialised (banking news, medicine, music, weather forecasting etc.); did not plan children’s programs; had no more than 10 – 24 staff members; no sustainable financing etc. The first applicant stated that it had experience in nationwide broadcasting, broadcasted various programs and had 218 staff members.
On 12 January 2012 the Kyiv Circuit Administrative Court found against the claimants. The court found that the National Council had lawfully adopted the decision to hold a competition and that the decisions on the winners of the competition had been adopted in compliance with the requirements of Article 25 of the TV and Radio Broadcasting Act.
On 17 April 2012 the Kyiv Administrative Court of Appeal upheld this decision. The court held, in particular, that it could not interfere with discretionary powers of the licencing authority. It further held that the National Council had acted in compliance with the Constitution and laws of Ukraine and within its competence. The National Council adhered to its rules of procedure and its principles of activity which attests that the decisions taken were lawful and reasoned.
On 22 November 2012 the Higher Administrative Court rejected the first applicant’s appeal in cassation.
3. Court proceedings instituted by the second applicant
On 14 October 2011 the second applicant challenged, inter alia, the decisions nos. 823 and 824 and the results of the competitions in the Kyiv Regional Administrative Court.
The second applicant claimed that in order to participate in the competition it had been unlawfully requested to sign a contract with a company Z., a TV network MX-5 private operator, Further on, under Article 22 of TV and Radio Broadcasting Act a company which is already in possession of a license has the right to broadcast on one of the channels of the new digital multichannel television network without participation in a competition. The decision to announce the competition implied that the companies which already have licenses had to participate in such a competition, contrary to the TV and Radio Broadcasting Act. The second applicant also complained that the program requirements were not sufficiently detailed for the competitions to be transparent and fair.
On 9 July 2012 the court found against the second applicant. It held that the National Council was entitled to announce competitions and to issue licences for broadcasting on the basis of the results of those competitions. The decision on the competitions winner and on the licencing of a particular competition participant fell within the discretionary powers of the Council. The court concluded that “any review of the appropriateness of the decision on whether one or another TV company was the winner of the competition would constitute an interference with the discretionary powers of the Council and [such review] cannot be done by the court”. The court further held that the decision on the results of the competition was an individual act and did not concern the second applicant. The court also noted that the second applicant “had not submitted evidence that they had lodged requests for participation in the competition” and that another competition was announced in January 2012.
The second applicant appealed stating that the first instance court had failed to address its arguments. It argued that the announcement of the competition had unabled it to change its licence from analogue to digital one and had forced it to participate in the competition. The second applicant stated that the decision to announce the competition in the regions which were covered by analogue licences was unlawful. As for the results of the competition, three out of four winners of the competition were founded after the competition had been announced and had only one employee each while the first applicant had been broadcasting since 2003, had numerous awards, modern equipment etc.
On 13 November 2012 the Kyiv Regional Administrative Court rejected the second applicant’s appeal. The court found that the decision to grant a licence for broadcasting falls within the National Council’s discretion. The court further found that there was no breach of any legal provisions.
On 14 February 2013 the Higher Administrative Court of Ukraine rejected the second applicant’s appeal in cassation.
B. Relevant domestic law
TV and Radio Broadcasting Act, 2006 (Закон «Про телебачення і радіомовлення») (in force at the material time with amendments as of 15 April 2011)
Article 8. Protection of economic competition in television
and sound broadcasting
“1. No provision of this Law or of the legal acts issued in furtherance hereof may be interpreted to prejudice the law of Ukraine ‘On Protection of Economic Competition’. In particular, no individual or corporation may control in any way, by means of influence on the formation of the governing and/or supervisory bodies of any broadcasting organisations, more than 35 % of the total amount of a corresponding geographical (national, regional or local) television or sound broadcasting market.
2. Compliance of the subjects of information activities with the legislation on the protection of economic competition and prevention of unfair competition shall be supervised by the bodies of the Antitrust Committee of Ukraine, acting within their authority. 3. No business may hold more than one license for terrestrial on-air broadcasting in any single geographical segment of the television and radio information market, e.g., national (country-wide), regional (individual region or oblast) and local (individual locality or a group of localities capable of being treated as a compact territorial entity).4. It shall be prohibited to apply dumping rates for advertising and service provision.
5. The antirust legislation of Ukraine may impose other restrictions concerning economic competition in the area of television and sound broadcasting.”
Article 9. Protection of interests of the state and domestic television
and radio production
“1. At least 50 % of the total amount of broadcasting of every broadcasting organisation must consist of domestic audiovisual product or music of Ukrainian composers or performers.
2. Where a tender for broadcasting license is held, the National Council shall be governed by the necessity to provide for the information needs of citizens, to protect public interests and domestic broadcasters, and to develop national TV and sound broadcasting capacity. In the terms of such tender it specifies, proceeding from the above priorities, appropriate requirements to programming philosophy.”
Article 10. Use of languages in the informational activity
of broadcasting organisations
“1. Broadcasting organisations shall broadcast in the state language.
2. Broadcasting to specific regions may also proceed in the languages of ethnic minorities residing in such region as distinct communities.
3. In the event that the original language (or that of dubbing) of a film and/or other programme (broadcast) is not Ukrainian, showing of such films and/or programmes (broadcasts) shall be conditional upon their dubbing into the state language.
4. For nationwide broadcasting, the share of air-time when broadcasting is carried out in the Ukrainian language may not be less than 75 % of the total daily broadcasting time.
5. Broadcasting to a foreign audience shall be carried out in Ukrainian and the corresponding foreign language.
6. The language (languages) of a broadcasting organisation’s programmes and broadcasts shall be defined in its broadcasting license terms.
7. With a view to the operation of multichannel television networks, the above rules apply to re-transmission of programmes and broadcasts of businesses licensed by the National Broadcasting Council of Ukraine.
...”
Article 22 Creation and development of broadcasting channels,
networks and television networks
“...
8. The National Council shall promote the introduction of digital broadcasting and corresponding technological re-equipment of operational broadcasting channels and networks. Changes in the terms of a broadcasting license in the case of migration from with analogue to digital broadcasting where they concern any modification of technological parameters, type of broadcasting (i.e. switching to multichannel broadcasting) and revision of the programming concept shall be subject to the broadcasting licence renewal procedure provided hereunder.
9. In the event that the licensee fails to submit an application for renewal of the license to the National Council within two months of the date when the channel or network is ready for introduction of digital broadcasting, the National Council shall announce a tender for a license for multichannel broadcasting; the existing licensee retaining the right to broadcast on one of the channels of the new digital multichannel television network.
...”
Article 24. Application for (extension of) a broadcast license
“1. An entity (business) intending to procure a broadcasting license (or have same extended) shall file an application for issue (extension) of a license with the National Council.
2. The application must indicate-
a) information regarding the founder(s) and owner(s) of the broadcasting organisation (for corporations: name, legal address, bank details; for individuals: full name, date of birth, nationality, address) and the structure of authorised fund; for a joint-stock company, also, a full list of its shareholders owning blocks of shares of at least 5 %;
b) information regarding the personal composition of the governing and supervisory bodies of the broadcasting organisation: head of organisation, composition of its board of directors, composition of the supervisory board, etc. (for each person, his full name, date of birth, citizenship, address);
c) name of organization, its legal address, bank details, contact phones and other basic data (logo, call sign, emblem, etc.);
d) type of broadcasting, as required under Article 23 of this Law;
e) targeted programme distribution area, as required under Article 23 of this Law;
f) requested procedure of consideration, i.e. tender for license or hors concourse consideration as required under Articles 22 and 25 of this Law and the decision of the National Council;
g) characteristics of the broadcasting channel, broadcast network, or multichannel network:
for terrestrial on-air and network, broadcasting: the frequency (frequencies), transmitter (transmitters) location and power, and the coverage area;
for satellite broadcasting: information regarding the parameters of the satellite broadcasting channel and footprint;
for multichannel network and facility dispersion: the telecom operator providing maintenance and operation of the network, head-end location maximum number of channels (resource) of such multichannel network, location (service area) of the multichannel network;
h) periodicity, hours, volume and format of broadcasting;
i) language (languages) in which the broadcasts are to be carried out;
g) number of households in target distribution area;
3. A broadcasting organisation filing an application for a license or extension of one shall also provide the following attachments:
copies of the duly approved constituent instruments/bylaws of such broadcasting organisation;
a copy of the certificate on its registration in the capacity of a subject of information activity (if any);
a tentative list of staff of the broadcasting organisation;
the programming policy statement, as required under Article 28 of this Law.
4. In the case of an extensive broadcasting network, or a significant number of transmitters, or other basic information, the broadcasting organisation shall submit them under separate cover as an attachment to its application.
5. With a view to ensuring observance of antimonopoly restrictions laid down in the law and the restrictions concerning the share of foreign owners in the authorised capital of broadcasting organisations, the National Council shall have the right.
to additionally request and obtain from any broadcasting organisation the information concerning the distribution of shares in the authorised capital of the legal persons who are its founders or owners and, in particular, its shareholders;
to request an opinion of the Antitrust Committee of Ukraine concerning potential monopolisation or substantial reduction of competition in the information domain.
6. No one may require any other documents for the purposes of issuing (extending) of a license.
7. Where licensing is executed hors concourse on the basis of an application, an application for a broadcast license shall be considered, and a decision in its respect made, within one month of its receipt by the National Council, of which decision the applicant shall receive due notification.
8. In the event of tender, consideration of applications for broadcasting licenses shall be performed as required under Articles 25 and 26 of this Law.
9. Consideration of applications for extension of a license shall be performed as required under Article 33 of this Law.
10. The National Council may set aside an application for (extension of) a license, as provided for under Article 29 of this Law.
11. Upon consideration of an application the National Council shall make a decision either to issue (extend) or not to issue (extend) a license, in conformity to the requirements of this Law.”
Article 25. Competitive broadcast licensing
“1. Licensing of broadcasting where such is related to the use of the radio frequency resource, and that of broadcasting on free channels of multichannel networks shall be based on the results of open tenders.
2. A tender for a license shall be initiated, called and held by the National Council. The National Council may initiate a tender either at its discretion or on an appropriate inquiry of a broadcasting organisation.
3. The National Council shall call a tender for a license, provided there are available broadcasting channels, broadcast networks, or free air time on broadcasting channels (networks), and also where:
a) an opinion has been obtained as to the possibility and terms of utilisation of frequencies allocated for the purposes of television and sound broadcasting not used for broadcasting before and the relevant opinion as to the electromagnetic compatibility of the broadcasting means;
b) the previous licensee has failed to apply 180 days prior to expiry of his license to the National Council for extension or the National Council has refused extension to such licensee, in compliance with the procedure established herein;
c) the license of the previous licensee has been invalidated in accordance with the provisions hereof;
d) the license of the winner of the previous tender has not entered into force for his failure to pay the license fee within the time specified in accordance with the provision hereof;
4. The National Council shall make the decision to call a tender and, at least 60 days before the deadline for applications, shall publish an announcement in the media the list of which it shall determine.
5. The announcement shall indicate the following:
a) the deadline for filing license applications, including a second submission upon elimination of the reasons for which the application may have been set aside, as required under Article 24 hereof;
b) the deadline for reviewing the results of the tender, which may not be later than 60 days after the reception of applications is complete;
c) summarised information on the broadcast channel, broadcast network or broadcasting channel(s) in a multichannel network with the use of which broadcasting is to be carried out;
d) tender terms and deadlines for their fulfilment;
e) specific features of broadcasting over the channel or channel(s) of a multichannel network;
f) maximum amount of the license fee;
g) tender deposit;
h) maximum broadcasting hours;
i) address for filing licensing applications;
6. Eligible for a tender shall be legal persons which have filed at the National Council their licensing applications and other documents as required under Article 24 hereof.
7. Admission to a tender shall be denied to-
legal persons whose applications have been set aside in accordance with Article 29 of this Law;
legal persons which do not meet the standards set forth in Article 12 of this Law concerning their establishment, interest of foreign physical or legal persons in the equity or authorised fund of the broadcasting organisation, and constituent instruments and bylaws of such broadcasting organisation.
8. The National Council shall make a reasoned decision to refuse admission of a legal person to a tender and notify such of said decision within 30 days of receipt of the application. Appeal from such decision lies with the court.
9. If no licensing application is filed within the specified term, the National Council may extend the deadline for applications, postpone the tender for a term, change the terms of such tender or terminate the tender;
10. The filing of application by only one applicant shall not be deemed grounds for extending the deadline for applications, postponement of the tender for a definite term, change of tender terms or termination of the tender.
11. The terms of a tender shall be set down by the National Council before calling one and shall be approved by a special decision of the National Council.
12. The terms of a tender shall specify:
a) license requirements for the relevant type of broadcasting;
b) requirements concerning programming policy statement;
c) requirements concerning the organisational and technical, financial and investment obligations of the prospective license holder.
13. A decision to name the winner of a tender and to issue him a license shall be made by the National Broadcasting Council of Ukraine within one month after the deadline for licensing applications.
14. While reviewing applications the National Council shall give priority to a broadcasting organisation that:
a) has the best capacity to fill the terms of the tender;
b) gives advantage to socially important programming (news, public affairs, children’s programmes, etc.), satisfies the information needs of ethnic minorities and promotes free speech;
c) is better equipped, financially, economically and professionally, to carry out television and sound broadcasting.
15. Guided by the standards of activity of broadcasting organisations, as defined by this Law, the National Council may extend the list of criteria, subject to their publication prior to a tender in question.
16. The National Council shall notify the applicants in writing of its decision within five working days of the formal delivery thereof (a copy of the decision shall be mailed or handed over).
17. A broadcast license shall be executed and issued to the broadcasting organisation which has won the tender within ten days after the latter pays the license fee, which shall be confirmed by an appropriate statement of the local office of the Treasury of Ukraine, provided such payment is effected within one month from the date of the decision to issue the license.
18. The terms of a broadcast license to be issued on the basis of a tender shall be determined by the National Council in agreement with the prospective licensee in accordance with the terms of the tender and the programming characteristics declared by such licensee and his commitments. Upon completion of a tender, the winner broadcasting organisation may undertake additional commitments, which shall be executed as its license terms.
19. The National Council may invite government institutions, non-governmental organizations and associations of citizens to provide their expert opinion in respect of the applicants’ capabilities. These opinions shall be recommendatory for the National Council.”
Article 26. Tender deposit
“1. Every applicant shall make security deposit with a view to affirming his intentions and commitments as respects his bidding for a license.
2. Tender deposit shall be a prerequisite for participation in a tender. The National Council shall determine by decision the amount of such tender deposit, provided that it may not exceed 10 per cent of the announced maximum rate of the license tax
3. The payment deposited against tender security by the winner of a license tender shall be credited to the amount payable by him as a license tax. The cash deposits of those other participants who failed in the tender shall be remitted to the state budget.”
Article 28. Programming conception of a broadcasting organisation
“1. Requirements to a programming conception shall be established by the National Broadcasting Council of Ukraine in accordance with this Law.
2. The programming conception of a broadcasting organisation shall specify-
the share of local product;
the minimum share of domestic audiovisual product;
the maximum share of foreign audiovisual product;
the maximum hours of re-transmission and a tentative list (per genres) of programs and broadcasts which are to be re-transmitted;
the genre distribution of programmes and broadcasts.
3. The core of the programming conception of a broadcasting organisation must comprise the following programmes:
analytical newscasts and social comment;
culture and arts;
popular science and education;
entertainment;
4. In the period of time between 7am to 11pm all licensees (save for satellite broadcasting) must respect the following ratio between Ukrainian and foreign programmes:
programmes produced in Europe must constitute at least 80 per cent, including at least 50 per cent of Ukrainian programming product;
in radio programmes, music of Ukrainian composers and performers must in any week constitute at least 50 per cent of total broadcasting time.
5. No licensee may distribute programmes capable of affecting healthy physical, mental or moral development of children and youth, nor programmes containing scenes of horror, killing or violence (physical or psychological), or scenes appealing to sexual instincts.
6. The accompanying text may not contain obscene words, expressions etc. Provisions of this subparagraph do not apply to encrypted multichannel systems.
7. The programming conception of a multichannel broadcasting shall specify-
the list of programs provided in the fixed package, including the licensee’s local product and programmes of other broadcasting organisations ;
the terms, i.e., unencrypted or encrypted, of distribution of each programme;
programming conceptions for each of the licensee’s local programmes as required under subparagraphs 2 and 3 of this article.
8. Every licensee shall be required to perform under his stated programming conception.
9. Any change to the programming conception shall comply with the procedure established hereunder.”
COMPLAINTS
The applicants complain that the authorities’ unlawful and unfounded refusal to grant them a broadcasting licence breached their right for freedom of expression under Article 10 of the Convention.
They further complain that they had no effective remedy in respect of this complaint as required by Article 13 of the Convention.
QUESTIONS TO THE PARTIES
1. Has there been an interference with the applicants’ freedom of expression, in particular their right to impart information, within the meaning of Article 10 § 1 of the Convention? If so, was that interference prescribed by law and necessary in terms of Article 10 § 2?
2. Did the applicants have at their disposal an effective domestic remedy for their complaint under Article 10, as required by Article 13 of the Convention (see Glas Nadezhda EOOD and Anatoliy Elenkov v. Bulgaria, no. 14134/02, 11 October 2007)?
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