X. S.A. v. THE NETHERLANDS

                      AS TO THE ADMISSIBILITY OF

                       Application No. 21472/93

                       by X. S.A.

                       against the Netherlands

      The European Commission of Human Rights (Second Chamber) sitting

in private on 11 January 1994, the following members being present:

           MM.   S. TRECHSEL, President

                 H. DANELIUS

                 G. JÖRUNDSSON

                 J.-C. SOYER

                 H.G. SCHERMERS

           Mrs.  G.H. THUNE

           MM.   F. MARTINEZ

                 L. LOUCAIDES

                 J.-C. GEUS

                 M.A. NOWICKI

                 I. CABRAL BARRETO

                 J. MUCHA

                 D. SVÁBY

           Mr.   K. ROGGE, Secretary to the Chamber

      Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

      Having regard to the application introduced on 16 November 1992

by X. S.A. against the Netherlands and registered on 5 March 1993 under

file No. 21472/93;

      Having regard to the report provided for in Rule 47 of the Rules

of Procedure of the Commission;

      Having deliberated;

      Decides as follows:

THE FACTS

      The applicant, X. S.A., a limited company incorporated under the

laws of Luxembourg, has its registered office in Luxembourg.  Before

the Commission the applicant company is represented by MM. A.J.H.W.M.

Versteeg and M. van Empel, who are lawyers, practising in Amsterdam.

      The facts of the case, as submitted by the applicant company, may

be summarised as follows.

      The applicant company was founded by Dutch legal persons as a

limited company under the laws of Luxembourg under the name F. S.A. and

funded by Dutch investors. The applicant company changed its name on

1 September 1989 to X. S.A.

      It holds an authorisation, granted by the Luxembourg authorities,

to transmit its television programmes via the Luxembourg cable

networks, and to this end the applicant company concluded contracts

with Luxembourg cable network operators. These broadcasts were

scheduled to start on 28 October 1989. Once transmitted in Luxembourg,

the programmes were to be broadcast to the general public via the Astra

satellite, which is operated by the Société Européenne de Satellite,

and with which corporation the applicant company had concluded an

agreement for the transmission of its programmes.

      On 28 September 1989 the Commissariat for the Media

(Commissariaat voor de Media), referring to the criteria formulated by

the Judicial Division of the Council of State (Afdeling Rechtspraak van

de Raad van State) in the latter's decision of 30 August 1989

concerning the broadcasting corporation "Cable One" and after noting

that the applicant company's executive management is mainly in the

hands of two Dutch nationals, that the programmes at issue will mainly

be transmitted to cable networks in Luxembourg and the Netherlands,

that the applicant company had only concluded agreements with cable

network operators in Luxembourg and the Netherlands and not in Flanders

or any other places in Europe, that the programmes are mainly aimed at

a Dutch audience, that the major part of the employees of the applicant

company come from the Netherlands, that the canvassing for commercials

will take place in the Netherlands and that in August 1989 the

applicant company, declaring that it wished to avoid possible problems,

had moved its activities from the Netherlands and Italy to Luxembourg,

decided that the applicant company could not be regarded as a foreign

broadcasting corporation within the meaning of Section 66 para. 1 of

the Media Act (Mediawet). This decision implied that Dutch cable

networks were not permitted to transmit the applicant company's

programmes.

      By letter of 9 October 1989 the applicant company filed an appeal

under the Administrative Decisions Appeals Act (Administratieve

Rechtspraak Overheidsbeschikkingen) against this decision with the

Judicial Division of the Council of State.

      Having considered the parties' oral and written submissions, the

Judicial Division, in an interim decision of 11 May 1992, decided to

stay the examination of the applicant's appeal. In this interim

decision the Judicial Division rejected the applicant company's

complaint that the Commissariat for the Media's decision of

28 September 1989 was contrary to Article 10 and Article 14 of the

Convention and, insofar as the applicant company complained that the

decision was contrary to EC regulations, decided to request a

preliminary ruling by the Court of Justice of the European Communities

in Luxembourg. These proceedings are currently pending.

      The Judicial Division noted that the applicant company, which is

no broadcasting institution within the meaning of the Media Act,

presented itself as a new national broadcasting corporation,

established at Aalsmeer, the Netherlands, with the explicit intention

to be an innovation in the Dutch national television system and that

it had immediately stopped its planned broadcasts after the decision

of 28 September 1989 of the Commissariat for the Media. Having regard

to these elements, the parties' submissions to the Judicial Division

and its considerations in its decision of 30 August 1989 in a similar

case (RO1.89.1485/Sp 90), the Judicial Division upheld the finding of

the Commissariat for the Media, that the applicant company had

established itself abroad with the apparent intention to circumvent the

Dutch rules for domestic broadcasting institutions and that, therefore,

the applicant company's programmes could not be regarded as programmes

of a foreign broadcasting corporation within the meaning of Section 66

para. 1(a) of the Media Act.

      The Judicial Division distinguished the applicant company's case

from that of RTL-Véronique, observing that the responsible broadcasting

corporation for that programme is the Compagnie Luxembourgeoise de

Télédiffusion S.A., a company which is registered in Luxembourg and was

already in 1931 established under the laws of that country.

      Under Article 10 of the Convention, considered separately or in

conjunction with Article 14 of the Convention, the Judicial Division,

referring to its reasoning in its decision of 5 September 1990

(RO1.89.5554/Sp 295), held that the interference with the applicant

company's rights under Article 10 para. 1 was justified under para. 2

of this article as being necessary for the prevention of disorder and

for the protection of the rights of others. In respect of Article 14

of the Convention, the Judicial Division held that the difference made

between Dutch and foreign broadcasting institutions has an objective

and reasonable justification, namely the fact that certain

restrictions, contained in the rules of the Dutch broadcasting system,

for Dutch broadcasting institutions cannot be imposed on foreign

broadcasting corporations as a result of EC rules. The Judicial

Division added that the applicant company, as a non-foreign

broadcasting corporation, was subject to the same rules as domestic

broadcasting institutions, and that, therefore, there was no difference

in treatment between the applicant company and domestic broadcasting

institutions.

RELEVANT DOMESTIC LAW

      Public broadcasting in the Netherlands is governed by the Media

Act, which aims at a national public broadcasting system based on

openness, diversity, non-commerciality and co-operation in order to

guarantee full expression of the various shades of political, social

and religious or philosophical opinions in the Netherlands. It lays

down the requirements which have to be met by broadcasting institutions

who wish to gain access to the Dutch public broadcasting system. If a

broadcasting institution meets the requirements of the Media Act,

broadcasting time and certain funds to finance broadcasting activities

are allocated by the Commissariat for the Media.

      Under the Media Act broadcasting institutions are under the

obligation to provide a full programme and to eschew advertising. Only

the Television and Radio Advertising Association (Stichting

Etherreclame "STER") is allowed to broadcast commercials. The proceeds

of these commercials is one of the sources for the funds the

Commissariat for the Media allocates to broadcasting institutions.

      Section 134 para. 1 of the Media Act entrusts the supervision of

the observance of the Media Act to the Commissariat for the Media,

which organ can impose a fine where it considers that the Media Act has

been violated.

      Section 65 of the Media Act, insofar as relevant, reads:

      "1. The operator of a cable network transmits

      simultaneously and in full length to all connected to the

      cable network:

      a. the programmes of institutions which have obtained

      broadcasting time for national broadcasts;

      b. the programmes of institutions which have obtained

      broadcasting time for local and regional broadcasts (...);

      (...)

      d. the television programmes of the Dutch language section

      of the Belgian public broadcasting service, insofar as

      these can be received directly most of the time with a

      reasonable quality at the place where the cable network is

      located by the use of an antenna which can be considered as

      regular having regard to the capacity of the cable network

      (...).

      (...)

      3.   The operator of a cable network shall not transmit the

      European programme (within the meaning of Section 16 para.

      2 (e)), when this programme does not comply with the

      requirements of Section 66 para. 1 (b) (...)."

      Section 66 of the Media Act, insofar as relevant, provides:

      "1. The operator of a cable network can:

      a. transmit programmes which have been broadcast by a

      foreign broadcasting institution by way of a broadcasting

      station which can be received directly most of the time

      with reasonable quality at the place where the cable

      network is located by a regular individual antenna situated

      at that place;

      b. transmit other programmes than those referred to under

      a. which have been broadcast, in accordance with the

      legislation there in force, by a foreign broadcasting

      institution or a composition of such institutions.  Insofar

      as these programmes contain commercials, the transmission

      thereof is only allowed when the commercials are dealt with

      by a separate legal entity, when the commercials are

      clearly identifiable as such and can be clearly

      distinguished from other programme parts and are not

      broadcast on Sundays, when the allocated broadcasting time

      for commercials is at most five percent of the total

      broadcasting time (...) and the proceeds thereof are fully

      used for the production of the programme.

      If however the above requirements are not met the

      transmission of such a programme is also allowed when the

      commercials it contains are not specifically aimed at a

      Dutch audience.

      2. For the application of what is contained in para. 1 (b)

      a commercial will in any event be considered as

      specifically aimed at a Dutch audience when the commercial

      is broadcast during or following a programme part or a

      connected whole of programme parts in which Dutch subtitles

      or an item in the Dutch language occur.

      3. Our Minister can grant an exemption from the prohibition

      as contained in para. 1 (b) in respect of broadcasting

      programmes which are broadcast in Belgium and aim at the

      Dutch speaking audience in Belgium."

      Section 70 para. 1 of the Media Act reads:

      "With the exception of the programmes referred to in this

      Chapter (Sections 65 up to and including 75), the operator

      of a cable network shall not simultaneously broadcast other

      programmes to more than one connected receiver."

      In its decision of 30 August 1989 (RO1.89.1485/Sp 90) the

Judicial Division established the following criteria to be met by

broadcasting institutions if they are to be regarded as possessing

foreign status:

- the institution must be established under foreign law;

- the institution must be established abroad;

- the institution must keep its accounts abroad and be liable to local

  taxes;

- there must be no indication that the institution has been established

  abroad with the evident intention of evading the statutory

  regulations applicable in the Netherlands to national broadcasting

  institutions;

- the institution's programme schedule must first be broadcast abroad

  and then transmitted from there to Dutch cable networks.

      The wording of Section 66 para. 1(b) of the Media Act has

recently been altered in that the rules in respect of commercials

appearing in broadcasts of foreign broadcasting institutions are no

longer included in the text of this provision. At present, in order to

be eligible for transmission on Dutch cable networks, Dutch national

broadcasting institutions must comply with the requirements under Dutch

law and foreign broadcasting institutions must comply with the

legislation of their own country.

      The recent changes in the Media Act have not altered the position

adopted by the Dutch authorities in respect of broadcasting companies,

which are considered as being in fact Dutch broadcasting companies

having established themselves abroad with the intention of evading the

rules for domestic broadcasting institutions. Such companies are not

regarded as foreign broadcasting institutions, but as national

broadcasting institutions subject to the Dutch rules on broadcasting.

COMPLAINTS

1.    The applicant company complains that its rights under Article 10

of the Convention are unjustly interfered with, since, in view of the

Judicial Division's decision of 11 May 1992, cable networks in the

Netherlands cannot transmit the applicant company's programmes without

exposing themselves to the risk of a fine being imposed on them by the

Commissariat for the Media for failure to respect the Media Act.

2.2.  The applicant company complains under Article 14 in conjunction

with Article 10 of the Convention that the Netherlands authorities'

decision not to consider it as a foreign broadcasting company was

discriminatory as two other broadcasting companies in a similar

position, RTL-Véronique and Radio 10, were allowed on Dutch cable

networks as foreign broadcasting companies.

THE LAW

1.    The applicant company complains that the Netherlands authorities'

decision not to consider it as a foreign broadcasting company and

thereby preventing their programmes from being transmitted by Dutch

cable networks constitutes an unjust interference with its rights under

Article 10 (Art. 10) of the Convention.

      Article 10 (Art. 10) of the Convention provides as follows:

      "1.  Everyone has the right to freedom of expression.  This

      right shall include freedom to hold opinions and to receive

      and impart information and ideas without interference by

      public authority and regardless of frontiers.  This Article

      shall not prevent States from requiring the licensing of

      broadcasting, television or cinema enterprises.

      2.   The exercise of these freedoms, since it carries with

      it duties and responsibilities, may be subject to such

      formalities, conditions, restrictions or penalties as are

      prescribed by law and are necessary in a democratic

      society, in the interests of national security, territorial

      integrity or public safety, for the prevention of disorder

      or crime, for the protection of health or morals, for the

      protection of the reputation or rights of others, for

      preventing the disclosure of information received in

      confidence, or for maintaining the authority and

      impartiality of the judiciary."

      The Commission notes that a preliminary ruling has been requested

from the Court of Justice of the European Communities as to whether the

refusal to accept the applicant company as a foreign broadcasting

company is in conformity with EC rules and that the applicant's case

before the Judicial Division of the Council of State has therefore not

yet been finally decided. In these circumstances, the question could

arise as to whether the applicant company has exhausted the domestic

remedies within the meaning of Article 26 (Art. 26) of the Convention.

However, the Commission does not find it necessary to answer this

question, since the application is in any event inadmissible for the

following reasons.

      The Commission recalls that both broadcasting programmes over the

air and cable retransmissions of such programmes are covered by the

right enshrined in the first two sentences of Article 10 para. 1

(Art. 10-1) of the Convention (Eur. Court H.R., Groppera Radio AG and

Others judgment of 28 March 1990, Series A no. 173, p. 22, para. 55).

It finds that there has been an interference with the applicant

company's rights under these two sentences.

      The Commission further recalls that the purpose of the third

sentence of Article 10 para. 1 (Art. 10-1) of the Convention is to make

it clear that States are permitted to control by a licensing system the

way in which broadcasting is organised in their territories,

particularly in its technical aspects (ibid. p. 24, para. 61), and that

since a State may enact legislation requiring the licensing of

broadcasting enterprises, it must also be legitimate for that State to

enact legislation which ensures compliance with the licence in

question, in particular by preventing means of circumventing the

conditions stated in the licence (cf. No. 10799/84, Dec. 17.5.84, D.R.

37 p. 236).

      The Commission notes that, although the applicant company is

incorporated under the laws of Luxembourg, the broadcasting of its

programme via Dutch cable networks came under Dutch jurisdiction. The

implicit prohibition to diffuse its programmes via Dutch cable networks

was fully consistent with the rules of the Dutch Media Act, given that

the applicant company, on the basis of its particular features, was not

considered by the Judicial Division to be a foreign broadcasting

company within the meaning of the Media Act and was therefore subject

to the broadcasting rules of the Netherlands. However, the Judicial

Division's decision was not based on technical considerations and the

third sentence of Article 10 para. 1 (Art. 10-1) of the Convention, in

the interpretation given to it by the Court, cannot be regarded as a

sufficient justification of the implicit prohibition (Eur Court. H.R.,

Informationsverein Lentia and Others v. Austria, judgment of 24

November 1993, to be published in Series A no. 276, para. 32).

      The question therefore arises whether the interference complained

of was justified under para. 2 of Article 10 (Art. 10-2) of the

Convention, namely whether it was "prescribed by law" and necessary in

a democratic society for one or more of the legitimate aims specified

in this provision.

      The Commission notes that the decision of the Judicial Division

of 11 May 1992, in which it found that the applicant company could not

be considered as a foreign broadcasting company, was based on the Media

Act. It is true that the Media Act does not contain a definition of a

"foreign broadcasting company", but the mere fact that a legislative

provision may give rise to problems of interpretation does not mean

that it is so vague and imprecise as to lack the quality of "law" in

this connection (Nos. 11553/85 and 11658/85, Dec. 9.3.87, D.R. 51 p.

136 with further references). The Commission finds that, in the present

case, there was a sufficient legal basis and that the interference at

issue was therefore "prescribed by law" within the meaning of Article

10 para. 2 (Art. 10-2) of the Convention.

      The Commission notes that the interference complained of was

based on the Media Act which is aimed at maintaining a pluralistic and

non-commercial broadcasting system and at protecting the diversity of

expression of opinion in the Dutch broadcasting system. It therefore

finds that the legitimate aim pursued was the protection of the rights

of others within the meaning of Article 10 para. 2 (Art. 10-2) of the

Convention.

      As to the question whether the interference complained of was

"necessary", the Commission recalls that the term "necessary in a

democratic society" within the meaning of Article 10 para. 2

(Art. 10-2) of the Convention implies that the interference must

correspond to a "pressing social need" and be proportionate to the

legitimate aim pursued. In determining whether an interference is

"necessary" in a democratic society the Convention organs must also

take into account that a margin of appreciation is left to the

Contracting States. This margin of appreciation is of particular

relevance in an area as complex and fluctuating as that of radio and

television broadcasting, which is confirmed by Article 10 (Art. 10) of

the Convention itself, in that it envisages in the third sentence of

paragraph 1 (Art. 10-1-3) a licensing system for broadcasting

enterprises.

      In the present case the applicant company complains of not being

considered as a foreign broadcasting company and, consequently, not

being allowed to broadcast its programmes via the Dutch cable network

as a foreign broadcasting company. The Commission notes that the recent

changes in the Media Act have not affected the position of broadcasting

institutions established abroad with the evident intention of evading

the Dutch statutory regulations for national broadcasting institutions.

They are not regarded as foreign broadcasting institutions, but as

national broadcasting institutions subject to the rules on broadcasting

applicable to such institutions.

      The Commission further notes that, while the applicant company

is incorporated under the laws of Luxembourg where it is also

officially registered, the envisaged programmes at issue were primarily

aimed at a Dutch audience.  In these circumstances and having regard

to the fact that both the applicant company and its programmes have

other strong links with the Netherlands, the Dutch authorities could

reasonably consider that these broadcasts should be subject to those

rules which normally apply to Dutch broadcasting institutions.  There

is no indication that these rules, insofar as they are relevant to the

present case, involve restrictions which would be in violation of

Article 10 (Art. 10).

      Under these circumstances, the Commission considers that the

interference at issue may reasonably be regarded as necessary in a

democratic society for the protection of the rights of others.

      It follows that this part of the application is manifestly ill-

founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

2.2.  The applicant company further complains under Article 14 in

conjunction with Article 10 (Art. 14+10) of the Convention that the

Netherlands authorities' decision not to consider it as a foreign

broadcasting company was discriminatory as two other broadcasting

companies in a similar position, RTL-Véronique and Radio 10, were

accepted on Dutch cable networks as foreign broadcasting companies.

      Article 14 (Art. 14) of the Convention provides as follows:

      "The enjoyment of the rights and freedoms set forth in this

      Convention shall be secured without discrimination on any ground

      such as sex, race, colour, language, religion, political or other

      opinion, national or social origin, association with a national

      minority, property, birth or other status."

      The Commission recalls that Article 14 (Art. 14) does not forbid

every difference in treatment in the exercise of the rights and

freedoms guaranteed by the Convention. It refers in this connection to

the case-law of the Court concerning the criteria for assessing a

difference in treatment, i.e. an objective and reasonable justification

of a measure and a reasonable relationship of proportionality between

the means employed and the aim sought to be realised (cf. Eur. Court

H.R., Abdulaziz, Cabales and Balkandali judgment of 28 May 1985, Series

A no. 94, p. 35, paras. 71-72; and Fredin judgment of 18 February 1991,

Series A no. 192, p. 19, para. 60).

      The Commission notes that the Judicial Division found a

significant difference between the applicant company and RTL-Véronique.

In view of this finding, the Commission is satisfied that the

distinction made between RTL-Véronique and the applicant company, in

that the former, unlike the latter, was accepted as a foreign

broadcasting company, was based on objective and reasonable grounds.

      It follows that in this respect there is no appearance of

discrimination contrary to Article 14 (Art. 14) of the Convention.

      Insofar as the applicant company complains that there was a

discriminatory difference in treatment between Radio 10 and itself, the

Commission notes that the applicant company has not raised this point

before the national courts and, therefore, in this respect, has failed

to exhaust domestic remedies as required by Article 26 (Art. 26) of the

Convention.

      It follows that the complaint regarding discrimination is partly

manifestly ill-founded within the meaning of Article 27 para. 2

(Art. 27-2) of the Convention and partly inadmissible according to

Article 27 para. 3 (Art. 27-3) of the Convention.

      For these reasons, the Commission, unanimously,

      DECLARES THE APPLICATION INADMISSIBLE

Secretary to the Second Chamber        President of the Second Chamber

      (K. ROGGE)                                   (S. TRECHSEL)

 

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