Kulturudvalget 2023-24
KUU Alm.del Bilag 190
Offentligt
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EUROPEAN COMMISSION
Brussels, 25.7.2024
C(2024) 5143 final
In the published version of this decision,
some information has been omitted,
pursuant to articles 30 and 31 of Council
Regulation (EU) 2015/1589 of 13 July 2015
laying down detailed rules for the
application of Article 108 of the Treaty on
the Functioning of the European Union,
concerning non-disclosure of information
covered by professional secrecy. The
omissions are shown thus […]
PUBLIC VERSION
This document is made available for
information purposes only.
Subject:
State Aid SA.112857 (2024/N) – Denmark
Cultural contribution by on-demand audiovisual media service
providers
Excellency,
1.
(1)
P
ROCEDURE
By electronic notification of 26 February 2024, registered on the same day by the
Commission, Denmark notified for reasons of legal certainty a financial
contribution levied from media service providers of on-demand audiovisual
media services for the promotion of Danish culture (the ‘measure’ or the ‘levy’),
which in its view does not lead to any granting of State aid to media service
providers which do not fall under the measure.
The Commission requested additional information from Denmark by letter of 26
April 2024 to which Denmark replied on 29 May 2024.
By letter registered on 25 June 2024, Denmark exceptionally agreed to waive its
rights deriving from Article 342 of the Treaty on the Functioning of the European
(2)
(3)
Udenrigsminister Lars Løkke Rasmussen
Asiatisk Plads 2
1448 København K
DANMARK
Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111
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Union (‘TFEU’), in conjunction with Article 3 of the Council Regulation 1/58 (
1
),
and to have this Decision adopted and notified only in English.
2.
D
ETAILED DESCRIPTION OF THE MEASURE
2.1. The levy imposed on providers of on-demand audiovisual media services
(4)
The legal basis of the levy is the Act on the contribution by certain media service
providers to the promotion of Danish culture (Culture Contribution Act, the ‘Act’)
(Lov
om visse medietjenesteudbyderes bidrag til fremme af dansk kultur
(kulturbidragsloven)) (
2
). It was adopted by the Danish Parliament on 30 May
2024 and entered into force on 1 July 2024.
The introduction of the levy takes place against a background of rapid
technological developments, particularly in the distribution of audiovisual
content. Denmark submits that new global players, including providers of video
on-demand services, have challenged not only the production’s financial
sustainability but also the accessibility and distribution of Danish films, series,
and documentaries, which play a pivotal role in connecting the population across
the country, while also promoting cultural and linguistic diversity.
In this context, the levy aims to promote Danish audiovisual content through an
obligation for media service providers of on-demand audiovisual media services
(
3
) to contribute financially to the production of new Danish films, series, and
documentaries. The design of the levy will ensure that on-demand audiovisual
media service providers generating revenues in the Danish market contribute to
the Danish audiovisual production’s financial sustainability (
4
). As stated in point
3.1.4. of the comments on the draft Act, revenues obtained from linear
audiovisual media services (
5
) are exempted from the levy (see recital (11)) in the
light of this objective. Denmark explains that linear audiovisual media services,
through their TV channels aimed at a Danish audience, already contribute
adequately to the broadcasting and production of Danish audiovisual content.
Denmark further argues that the gap in the contribution to the production of
Danish and European works between TV broadcasters and on-demand
audiovisual media service providers is acknowledged in recital 37 of the
Audiovisual Media Services Directive (‘AVMSD’) (
6
), which states that
(5)
(6)
(
1
) Regulation No 1 determining the languages to be used by the European Economic Community, OJ 17,
6.10.1958, p. 385.
(
2
)
https://www.folketingstidende.dk/samling/20231/lovforslag/L159/20231_L159_som_vedtaget.pdf
(
3
) Defined by § 3(2) of the Act, in accordance with Article 1(1)(g) of the Audiovisual Media Services
Directive (‘AVMSD’), as
‘an audiovisual media service provided by a media service provider so that
programmes can be received at a time chosen by the user and at his individual request, on the basis of
a catalogue of programmes selected by the media service provider’.
(
4
) Point 3.1.4. of the comments on the draft Act.
(
5
) Defined by Article 1(1)(e) of the AVMSD as television broadcasting or television broadcast, i.e., ‘an
audiovisual media service provided by a media service provider for simultaneous viewing of
programmes on the basis of a programme schedule’.
(
6
) Directive (EU) 2018/1808 of the European Parliament and of the Council of 14 November 2018
amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation
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‘Broadcasters currently invest more in European audiovisual works than
providers of on-demand audiovisual media services’.
Thus, the levy aims to
ensure a level playing field as regards the production and promotion of Danish
audiovisual content in comparison with linear audiovisual media services.
(7)
Furthermore, Denmark considers that the levy, by ensuring that high quality
Danish audiovisual content continues to be produced and distributed in the future,
will increase the cultural diversity in the choice of works available to the Danish
and European audiences (
7
).
As is apparent from point 3. of the comments on the draft Act, the levy aims to
make use of the possibility provided for in Article 13(2) of the AVMSD for a
Member State to require media service providers established in other Member
States but targeting audiences in its territory to contribute, in a non-discriminatory
and proportionate way, to the production of European works (
8
). The Danish
authorities submit that it will contribute to the production of European works in
the form of new Danish audiovisual content.
The levy applies to media service providers established in Denmark providing on-
demand audiovisual media services (
9
) as well as to media service providers
established in other Member States providing on-demand audiovisual media
services targeting audiences in Denmark (
10
). It covers any on-demand
audiovisual media service provided against payment irrespective of its business
model (
11
), with the exceptions described in recital (10). Denmark clarifies that
the levy applies to broadcasters providing on-demand audiovisual media services
insofar as the revenues from the on-demand services are concerned (see recital
(11)). The definition of on-demand audiovisual media services entails that
revenues obtained from linear audiovisual media services are not in the scope of
the levy (see recital (11)). According to the estimates of the Danish Ministry of
Culture, up to 50 media service providers will be subject to the measure (
12
).
Pursuant to § 2(3) and (5) of the Act, two categories of on-demand audiovisual
media service providers are exempted from the levy:
(8)
(9)
(10)
or administrative action in Member States concerning the provision of audiovisual media services
(Audiovisual Media Services Directive) in view of changing market realities, OJ L 303, 28.11.2018,
pp. 69-92.
(
7
) Point 3.1.4. of the comments on the draft Act.
(
8
) Those obligations can take the form of direct investments in content and contributions to national
funds.
(
9
)
§ 2(1) of the Act.
(
10
) § 2(2) of the Act. In accordance with recital (38) of the AVMSD, Denmark, when assessing, on a case-
by-case basis, whether an on-demand audiovisual media service established in another Member State
is targeting audiences in its territory, should refer to indicators such as i) advertisement or other
promotions are specifically aiming at customers in Denmark, ii) the main language of the service is
Danish, and iii) the existence of content or commercial communications aiming specifically at the
audience in Denmark.
(
11
) Including subscription video on-demand (‘SVOD’), transactional video on-demand (‘TVOD’) and
advertising video on-demand (‘AVOD’) services.
(
12
) Point 6. of the comments on the draft Act.
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(i)
First, the levy does not apply to on-demand audiovisual media service
providers with an annual turnover of less than DKK 15 000 000
(approximately EUR 2 000 000) (
13
) or whose audience represents less than
1% of the total number of users of on-demand audiovisual media services on
the Danish market. According to Denmark, this exemption applies Article
13(6) of the AVMSD, which states that the requirement on media service
providers targeting audiences in other Member States under Article 13(2) (see
recital (8))
‘shall not apply to media service providers with a low turnover or
a low audience’.
Second, the levy does not apply to media service providers offering on-
demand audiovisual media services solely for library or educational purposes.
According to Denmark, this exemption applies by virtue of Article 13(6) of
the AVMSD, which allows Member States to waive the requirement on media
service providers targeting audiences in other Member States under Article
13(2) (see recital (8)) where such a requirement ‘would
be impracticable or
unjustified by reason of the nature or theme of the audiovisual media
services’.
(ii)
(11)
On-demand audiovisual media service providers, as referred to in recital (9) and
with the exceptions described in recital (10), are liable to an annual levy of 2%
(the ‘basic levy’) of their contributory turnover in Denmark (
14
), defined as the
‘gross revenues of a media service provider in Denmark resulting from the
making available of audiovisual content by the on-demand audiovisual media
service’
without
‘revenues related to the making available of sports or news
programmes, revenues from linear programming services made available through
the on-demand audiovisual media service, and revenues from the redistribution of
other media service providers’ on-demand audiovisual media services’
(
15
).
According to Denmark, the contributory turnover’s definition ensures that the
revenues used for the calculation of the levy are limited to the making available of
the categories of audiovisual content (films, series, and documentaries) whose
production is supported by the levy.
On-demand audiovisual media service providers who directly invest less than 5%
of their contributory turnover in Denmark in ‘new Danish content’ (
16
) must, in
addition to the basic levy, pay an annual levy of 3% (the ‘increased levy’) of their
contributory turnover in Denmark (
17
). For media service providers with no or a
level of investment less than 5% of contributory turnover in new Danish content,
(12)
(
13
) European Central Bank exchange rate on the date of notification: EUR 1 = DKK 7.4542. The threshold
of DKK 15 000 000 has been determined in accordance with the Commission Recommendation of 6
May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124,
20.5.2003, p. 36) which sets the financial ceiling defining microenterprises at an annual turnover of
EUR 2 000 000 (Article 2(3)).
(
14
) § 4(1) of the Act.
(
15
) § 3(4) of the Act.
(
16
) Pursuant to § 4(3) of the Act, investments in new Danish content include all types of investments in
production and co-production of new films, series, and documentaries. Pursuant to § 4(4) of the Act,
an investment is considered as having been made in new Danish content when 75% of the production
material for European produced films, series or documentaries is in Danish.
(
17
) § 4(2) of the Act.
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the total levy amounts to 5% of the annual contributory turnover in Denmark. On-
demand audiovisual media service providers can therefore choose between
investing directly at least 5% of their contributory turnover in new Danish content
or being subject to the increased levy. According to Denmark, the design of the
measure therefore ensures that the on-demand audiovisual media service
providers’ investments in new Danish content are taken into account for the
purpose of the measure, while guaranteeing that all media service providers of on-
demand audiovisual media services contribute in a proportionate manner to the
production of Danish audiovisual content (
18
). Furthermore, Denmark claims that
the design of the measure is in line with Article 13(2) of the AVMSD, which
states that the obligations for media service providers to contribute to European
works can take the form of direct investment in content and contribution to
national funds (
19
).
(13)
The levy will be collected annually by the Agency for Culture and Palaces based
on media service providers’ statements of the most recent calendar year’s
turnover in Denmark (
20
). It will be due for the first time in 2025 based on the
media service providers’ contributory turnover in Denmark for 2024 (
21
).
According to the estimates of the Danish Ministry of Culture, the proceeds of the
levy will amount to approximately DKK 103 000 000 (approximately EUR 14
000 000) per year (
22
).
Pursuant to § 6(1) of the Act, the proceeds of the levy, after deduction of certain
costs associated with the measure’s administration, will be allocated to the Public
Service Fund (
23
) and other various Danish aid schemes supporting the
development, production and promotion of films, series and documentaries.
2.2.
The position of Denmark
(15)
(16)
Denmark submits that the measure does not constitute State aid.
In particular, Denmark submits that not imposing the levy on revenues obtained
from linear TV services is not selective. The exempted linear audiovisual media
(14)
(
18
) Points 1. and 3.1.4. of the comments on the draft Act.
(
19
) See recital (36) of the AVMSD:
‘In order to ensure adequate levels of investment in European works,
Member States should be able to impose financial obligations on media service providers established
on their territory. Those obligations can take the form of direct contributions to the production of and
acquisition of rights in European works. The Member States could also impose levies payable to a
fund, on the basis of the revenues generated by audiovisual media services that are provided in and
targeted towards their territory.’
(
20
) § 5(1) of the Act.
(
21
) § 13(2) of the Act.
(
22
) Points 3.1.4. and 6. of the comments on the draft Act. The net proceeds of the levy will amount to
approximately DKK 98 000 000 (approximately EUR 13 000 000) per year.
(
23
) State aid case SA.101658 -
Tilskud til produktion af dansk public service tv
(Public
ServicePuljen),
implemented under Article 54 of Commission Regulation (EU) No 651/2014 of 17 June 2014
declaring certain categories of aid compatible with the internal market in application of Articles 107
and 108 of the Treaty (‘GBER’), OJ L 187, 26.6.2014, pp.1-78, as amended.
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services would be in a legal and factual situation different from on-demand
audiovisual media services.
(17)
In this regard, Denmark explains that on-demand audiovisual media services are
not subject to the same content-related obligations as linear services. In fact,
public service broadcasters, that amount to the large majority of linear viewing in
Denmark (
24
), already have extensive obligations to invest in and broadcast
Danish audiovisual content (
25
). Moreover, linear broadcasters are required, in
accordance with Article 16(1) of the AVMSD, to reserve a majority proportion of
their transmission time (
26
) for European works (
27
). Pursuant to Article 17 of the
AVMSD, broadcasters must also reserve at least 10% of their transmission time
for European works created by producers who are independent of
broadcasters (
28
). On the other hand, Article 13(1) of the AVMSD requires media
service providers of on-demand audiovisual media services to only have at least a
30% share of European works in their catalogues and ensure a suitably prominent
placement of those works (
29
).
The obligations described in recital (17) only apply to broadcasters and providers
of on-demand services under Danish jurisdiction (
30
). The proportion of
undertakings under Danish jurisdiction relative to the total market is much
smaller for on-demand audiovisual media service providers than for broadcasters.
Thus, Denmark argues that most of the on-demand audiovisual media services
provided on the Danish market essentially is not regulated in Denmark as regards
the promotion of certain types of content. On the contrary, the vast majority of the
market for TV broadcasting is either subject to public service obligations under
the Danish law or the above-mentioned requirements under the AVMSD (see
recital (17)).
These different legal situations between linear and on-demand audiovisual media
services effectively result in a significantly higher share of Danish produced
content by linear broadcasters compared to on-demand services, as acknowledged
by recital (37) of the AVMSD (see recital (6)). Indeed, public service
broadcasters invest up to DKK 1 billion (approximately EUR 134 000 000) per
(18)
(19)
(
24
) The two main Danish public service broadcasters, DR and TV 2, represent between 54% (public
service channels only) and 81% (including TV 2’s commercial channels) of the linear market in share
of viewing (data from Nielsen Media Denmark -
Seermålingen
(TV-audience measurement), based on
weeks 33-34 of 2023).
(
25
) § 11 of Consolidation Act No 1350 of 4 September 2020 - Radio and Television Broadcasting Act
(Lov
om radio- og fjernsynsvirksomhed).
(
26
) Excluding the time allotted to news, sports events, games, advertising, teletext services and
teleshopping.
(
27
) § 13(1) 1. of Order No 1159 of 18 June 2020 - Order on registration-based programme activities
(Bekendtgørelse
om programvirksomhed på grundlag af registrering).
(
28
) § 13(1) 2. of Order No 1159 of 18 June 2020 - Order on registration-based programme activities
(Bekendtgørelse
om programvirksomhed på grundlag af registrering).
(
29
) § 14 of Order No 1159 of 18 June 2020 - Order on registration-based programme activities
(Bekendtgørelse
om programvirksomhed på grundlag af registrering).
(
30
) Pursuant to recital (8) of the AVMSD,
‘Establishing jurisdiction requires an assessment of factual
situations against the criteria laid down in Directive 2010/13/EU’.
Those criteria are defined in Article
2(3) to (5) of Directive 2010/13/EU.
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year (
31
) in Danish language content. Moreover, the two main commercial
broadcasters in Denmark, Viaplay Group and Warner Bros. Discovery (
32
), invest
around between DKK […] (*) and […] (approximately between EUR […] and
[…]) per year in Danish produced fiction and non-scripted content (
33
). This
represents an average annual investment in Danish content of approximately […]
% of the broadcasters’ aggregate annual sales (
34
). By comparison, Danish
produced films and series (
35
) represent less than 10% of the on-demand
audiovisual media services’ total content (
36
), except for the on-demand
audiovisual media services provided by public service broadcasters (
37
).
(20)
In this context, Denmark submits that the levy, by targeting media service
providers of on-demand audiovisual media services, aims to address the gap in
the contribution to the production and promotion of Danish audiovisual content
between linear and on-demand audiovisual media services and therefore to ensure
a level playing field (see recital (6)).
While emphasising the differences between linear and on-demand audiovisual
media services, Denmark underlines that the levy covers all types of media
service providers when providing an on-demand audiovisual media service
regardless of their business model (see recital (9)), including broadcasters
providing such services insofar as the revenues from the on-demand services are
concerned (see recitals (9) and (11)).
In this regard, Denmark recalls that the exemptions provided for on-demand
audiovisual media service providers with a low turnover or a low audience (see
recital (10)(i)) and on-demand audiovisual media services provided solely for
library or educational purposes (see recital (10)(ii)) derive from Article 13(6) of
the AVMSD.
(21)
(22)
*Confidential information
(
31
) Danish language content (scripted and not scripted) in this context does not include sports and news
programmes (data from DR and TV 2, based on 2020, 2021 and 2022).
(
32
) Those two commercial broadcasters represent 16% of the linear market in share of viewing. Along
with DR and TV 2, Viaplay Group and Warner Bros. Discovery represent 97% of all linear viewing in
Denmark (data from Nielsen Media Denmark -
Seermålingen
(TV-audience measurement)).
(
33
) Estimates are based on data from the Danish Producers’ Association whose members cover more than
95% of the Danish production market.
(
34
) Estimates are based on publicly available accounts in combination with externally provided revenue
estimates. The share of investments in Danish content is calculated based on the companies’ aggregate
annual sales including revenue from sports which is significant for both companies. According to
Denmark, the share of investment in Danish content in proportion for total sales from cultural content
only would therefore be significantly higher than [...] %.
(
35
) Titles are defined as Danish produced content if Denmark is among the listed production countries. In
most cases, Denmark is the sole production country but when there are two or more production
countries, the share of Danish produced content may be overstated.
(
36
) For instance, Viaplay’s Danish produced content share is 6% for films and 7% for series and HBO
Max’s Danish produced content share is 7% for films and 1% for series (data from PlayPilot, in
November 2022).
(
37
) TV 2 Play’s Danish produced content share is 74% for films and 75% for series and DRTV’s Danish
produced content share is 47% for films and 49% for series (data from PlayPilot, in November 2022).
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(23)
Therefore, the levy does not discriminate between linear broadcasting and on-
demand audiovisual media services operating on the Danish market but ensures
the same competitive environment for such media service providers in relation to
the levy’s objective.
In light of the above, Denmark claims that the measure is not selective and
therefore does not constitute State aid.
A
SSESSMENT OF THE MEASURE
Denmark has notified the measure to the Commission as no aid for reasons of
legal certainty. The Commission will therefore assess whether the measure in
relation to the levy described in Section 2.1 is free of State aid.
According to Article 107(1) of the Treaty on the Functioning of the European
Union (‘TFEU’),
‘any aid granted by a Member State or through State resources
in any form whatsoever which distorts or threatens to distort competition by
favouring certain undertakings or the production of certain goods shall, in so far
as it affects trade between Member States, be incompatible with the internal
market’.
The qualification of a measure as aid within the meaning of this provision
therefore requires the following cumulative conditions to be met: (i) the measure
must be imputable to the State and financed through State resources; (ii) it must
confer an advantage to an undertaking; (iii) that advantage must be selective; and
(iv) the measure must distort or threaten to distort competition and affect trade
between Member States.
3.1. Selectivity
(24)
3.
(25)
(26)
(27)
(28)
To fall within the scope of Article 107(1) of the Treaty, a measure must
‘favour
certain undertakings or the production of certain goods’.
Hence, not all measures
which favour economic operators fall under the notion of aid, but only those
which grant an advantage in a selective way to certain undertakings or categories
of undertakings or to certain economic sectors.
The Court of Justice has established that the selectivity of a fiscal (or similar)
measure should in principle be assessed by means of a three-step analysis (
38
).
First, the common or normal tax regime applicable in the Member State is
identified: ‘the reference system’. Second, it should be determined whether a
given measure constitutes a derogation from that system insofar as it
differentiates between economic operators who, in light of the objectives intrinsic
to the system, are in a comparable factual and legal situation. If the measure in
question does not constitute a derogation from the reference system, it is not
selective. However, if it does (and therefore is
prima facie
selective), it must be
established, in the third step of the analysis, whether the derogatory measure is
(29)
(
38
) See, for instance, judgments of 8 September 2011,
Commission v Netherlands
(NOx), C-279/08 P,
EU:C:2011:551; of 8 November 2001,
Adria-Wien Pipeline,
C-143/99, EU:C:2001:598; of 8
September 2011,
Paint Graphos and others,
C-78/08 to C-80/08, EU:C:2011:550 and EU:C:2010:411;
and of 29 April 2004,
GIL Insurance,
C-308/01, EU:C:2004:252.
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justified by the nature or the general scheme of the reference system. If a
prima
facie
selective measure is justified by the nature or the general scheme of the
system, it will not be considered selective and it will thus fall outside the scope of
Article 107(1) TFEU.
3.1.1.
(30)
Identification of the reference system
The reference system constitutes the framework against which the selectivity of a
measure is assessed. It is composed of a consistent set of rules that generally
apply, on the basis of objective criteria, to all undertakings falling within its scope
as defined by its objective.
In the case of taxes, the reference system is based on such elements as the tax
base, the taxable persons, the taxable event, and the tax rates. The same applies to
special purpose (stand-alone) levies, which do not really form part of a wider
taxation system. As a result and provided the boundaries of the levy have not
been designed in a clearly arbitrary or biased way (
39
) so as to favour certain
products or certain activities which are in a comparable situation with regard to
the underlying logic of the levy in question, the reference system is, in principle,
the levy itself.
According to the case law, to assess whether the characteristics of a tax indicate a
manifestly discriminatory element, it is necessary to determine whether the choice
of criteria for taxation appears inconsistent in the light of the objective of that
tax (
40
). In that regard, outside the spheres in which EU tax law has been
harmonised, it is the Member State concerned which determines the
characteristics constituting the tax, which define, in principle, the reference
system or the ‘normal’ tax regime, from which it is necessary to analyse the
condition relating to selectivity. That applies in particular to the determination of
the choice of tax rate, the tax base, the taxable event, the threshold and the
methods for calculating the basis of assessment (
41
). Account must be taken of the
fact that, in the absence of EU rules, it falls within the competence of the Member
States to designate bases of assessment and to spread the tax burden across the
various factors of production and economic sectors (
42
).
The cultural contribution constitutes a special-purpose (stand-alone) levy based
on the revenues generated by on-demand audiovisual media services in Denmark,
as defined in recital (11). It pursues its own logic and is independent and distinct
from any other tax regime applied in Denmark. Therefore, the levy does not form
(31)
(32)
(33)
(
39
) See, for instance, judgments of 15 November 2011,
Commission and Spain v Government of Gibraltar
and United Kingdom,
C-106/09 P and C-107/09 P, ECLI:EU:C:2011:732, paragraphs 101 et seq., and
of 16 March 2021,
Commission v Hungary,
C-596/19 P, ECLI:EU:C:2021:202, paragraphs 48 and 49.
(
40
) See, to that effect, judgments of 16 March 2021,
Commission v Poland,
C‑562/19 P, EU:C:2021:201,
paragraph 43, and of 16 March 2021,
Commission v Hungary,
C‑596/19 P, EU:C:2021:202, paragraph
49.
(
41
) See, to that effect, judgments of 16 March 2021,
Commission v Poland,
C‑562/19 P, EU:C:2021:201,
paragraphs 38 and 39, and of 26 April 2018,
ANGED,
C‑236/16 and C‑237/16, EU:C:2018:291,
paragraph 43.
(
42
) Judgment of 26 April 2018,
ANGED,
C‑233/16, EU:C:2018:280, paragraph 50.
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part of a wider taxation regime. Accordingly, in the case at hand, the reference
system is confined to the levy.
(34)
Denmark explains that on-demand services have gained importance in the Danish
audiovisual media services’ consumption. Both the financial sustainability of the
Danish creative ecosystem, ensuring that high quality Danish audiovisual content
continues to be produced in the future, and the distribution and accessibility of
Danish films, series and documentaries have been challenged by these changing
market conditions (see recital (5)).
Against this background, and for the purposes of determining whether the
characteristics of the levy indicate a manifestly discriminatory element, it is noted
that, as stated in recital (6), the objective of the levy is to promote Danish
audiovisual content by requiring media service providers generating revenues
from making available audiovisual content on on-demand audiovisual media
services targeting audiences in Denmark to contribute to the production of new
Danish films, series, and documentaries.
The main features of the reference system will be assessed below.
3.1.1.1. Taxable persons and taxable event
(37)
In accordance with Article 13(2) of the AVMSD, the levy applies to on-demand
audiovisual media service providers established in Denmark but also to media
service providers established in other Member States providing on-demand
audiovisual media services targeting audiences in Denmark (see recital (9)). The
scope of the levy is therefore revenues generated by selling on-demand
audiovisual media services to a Danish audience. Revenues obtained from linear
audiovisual media services are not in the scope of the levy (see recital (11)).
As regards the scope of the levy, Denmark underlines that on-demand services are
a distinct service from linear services, with a different legal and factual situation
(see recital (16)). As explained by Denmark, the Danish market for linear services
is dominated by public service broadcasters which are already subject to
extensive obligations to invest in and broadcast Danish audiovisual content (see
recital (17)). Furthermore, when comparing the obligations applying to on-
demand and linear audiovisual media services as regards the production and
distribution of Danish and European audiovisual works, it follows that on-demand
services are subject to a more lenient regulatory framework (see recital (17)).
Although covering all services with audiovisual content, irrespective of the
technology used to deliver the content, the AVMSD makes a distinction between
linear and on-demand audiovisual media services and provides lighter regulation
to the latter. As a result, most of the Danish market for on-demand services is not
regulated, while the market for linear services is either subject to public service
obligations under the Danish law or to the requirements under Articles 16 and 17
of the AVMSD (see recitals (17) and (18)). These differences in market structures
and legal obligations translate into higher levels of investment in Danish works by
broadcasters compared to on-demand audiovisual media service providers (see
recital (19)). That factual situation is, moreover, acknowledged by recital (37) of
the AVMSD (see recitals (6) and (19)).
(35)
(36)
(38)
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(39)
As explained in recitals (6) and (20), the levy is designed to address the gap in the
contribution to the production and promotion of Danish audiovisual content
between linear TV services broadcasters and on-demand audiovisual media
services, caused by the different obligations relevant for the objective of the levy.
In light of the above, limiting the scope of the levy to media service providers of
on-demand audiovisual media services generating revenues in the Danish market
is consistent with its objective and does not reveal a manifestly discriminatory
element in the design of the levy (
43
). Accordingly, the fact that linear audiovisual
media services are not in the scope of the levy and do not form part of the same
reference framework cannot be regarded as conferring a selective advantage on
those undertakings.
3.1.1.2. Taxable base and tax rates
(40)
(41)
As described in recital (11), the levy is calculated based on the contributory
turnover defined as the revenues of a media service provider resulting from the
making available of audiovisual content through an on-demand audiovisual media
service in Denmark.
The exclusion of revenues generated from sports or news programmes, from
linear programming services, and from the redistribution of other media service
providers’ on-demand audiovisual media services from the contributory turnover
(see recital (11)) is consistent with the levy’s objective. Sports and news
programmes do not fall under the categories of audiovisual content (films, series,
and documentaries) which the levy aims to support. Therefore, the exclusion of
those programmes from the contributory turnover, even if they are made available
through an on-demand audiovisual media service, is consistent with the levy’s
objective to support the production of new Danish films, series, and
documentaries (see recital (11)). The exclusion of linear programming services
made available through an on-demand audiovisual media service is also
consistent with the underlying logic of the levy. Such services are already subject
to the various content-related obligations described in recital (17). Their exclusion
from the contributory turnover is therefore consistent with the levy’s objective to
address the gap in the contribution to the production of Danish audiovisual
content between linear and on-demand audiovisual media services (see recitals
(6), (20) and (39)). Finally, the exclusion of revenues generated through the mere
redistribution of other on-demand audiovisual media services from the
contributory turnover ensures that media service providers are not required to pay
for revenues from services for which they do not have editorial responsibility and
are not providers of within the meaning of the Act. It also aims to avoid the
double payment of the levy for the same on-demand audiovisual media service.
As regards the design of the measure and the tax rates applying for the basic and
increased levies (see recitals (11) and (12)), as noted by Denmark, the
combination of a levy and direct investments in new Danish content is in line with
(42)
(43)
(
43
) See the Commission’s comments delivered on 2 May 2024 regarding the notification 2024/54/DK
within the framework of the procedure laid down by Directive (EU) 2015/1535 of the European
Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of
information in the field of technical regulations and of rules on Information Society services, OJ L
241, 17.9.2015, pp.1-15.
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Article 13(2) of the AVMSD. The differentiation between the basic levy and the
increased levy is consistent with the measure’s objective. Indeed, on-demand
audiovisual media services that invest at least 5% of their contributory turnover in
Denmark in new Danish content already provide a contribution to Danish
audiovisual content and are subject only to the basic levy. Moreover, the basic
levy and the possibility to waive the increased levy by direct investments in new
Danish content apply to all entities subject to the measure.
(44)
In light of the above, the Commission considers that the exclusion of the revenues
as described in recital (42) from the tax base, and the differentiation in tax rates
constitute features that do not reveal a manifestly discriminatory element in the
design of the reference system and are consistent with its objective.
3.1.1.3. Interim conclusion
(45)
In view of the above, the Commission concludes that the reference system has not
been configured according to manifestly discriminatory parameters intended to
circumvent Union law on State aid.
3.1.2.
(46)
Derogation within the reference system
As a third step, it is necessary to determine whether the levy involves a
derogation from the application of the reference system in favour of certain
undertakings, which are in a similar factual and legal situation in light of the
objective of the reference system.
As described in recitals (9) and (10), the levy covers all on-demand audiovisual
media services provided against payment, apart from, on the one hand, on-
demand audiovisual media service providers with a low turnover or a low
audience and, on the other hand, who offer such services solely for library or
educational purposes.
As regards on-demand audiovisual media service providers with a low turnover or
a low audience (see recital (10)(i)), this exemption is in line with Article 13(6) of
the AVMSD which aims to exclude providers with no significant presence on the
market from the requirements on media service providers targeting audiences in
other Member States under Article 13(2) (see recital (8))
‘in order to allow for the
entry of new players in the market’
(
44
). This obligation is an indication that the
capacity of media service providers with a low turnover or a low audience to
contribute to the production of Danish audiovisual content is different and
typically lower than larger on-demand audiovisual media service providers’
capacity. Imposing the levy on them would therefore risk undermining market
development, as stated in recital (40) of the AVMSD. Thus, on-demand
audiovisual media service providers with a low turnover or a low audience are not
in the same factual and legal situation in light of the objective of the levy.
The exemption for media service providers offering on-demand audiovisual
media services for library or educational purposes (see recital (10)(ii)) is also in
line with Article 13(6) of the AVMSD which allows Member States to waive the
(47)
(48)
(49)
(
44
) Recital (40) of the AVMSD.
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requirements on media service providers targeting audiences in other Member
States under Article 13(2) (see recital (8)) where such a requirement
‘would be
impracticable or unjustified by reason of the nature or theme of the audiovisual
media services’.
Those on-demand services are provided for educational and
cultural purposes to users of local libraries and Danish primary and secondary
schools (
45
). Given the general interest nature of those services, it can be
concluded that they are not in the same factual and legal situation in light of the
objective of the levy.
(50)
The Commission concludes that the above-mentioned media service providers of
on-demand audiovisual media services are not in a similar factual and legal
situation in light of the objective of the levy. Therefore, their exemption does not
constitute a derogation from the reference system.
3.1.3.
(51)
Conclusion on selectivity
The reference system has been designed by Denmark in a consistent manner and
has not been configured according to manifestly discriminatory parameters. It is
not designed in a clearly arbitrary or biased way so as to favour certain
undertakings over others, which are in a comparable situation with regard to its
underlying logic.
The Commission therefore considers that the notified measure is not selective.
3.2. Conclusion on the existence of aid
(52)
(53)
(54)
For a measure to be categorised as aid within the meaning of Article 107(1)
TFEU, all cumulative conditions set out in that provision must be fulfilled.
Since the notified measure is not selective, not all the conditions laid down by
Article 107(1) TFEU are met. Therefore, the Commission concludes that the
notified measure does not constitute aid.
(
45
) This concerns the three TVOD services (Filmstriben,
Børnebiffen.dk
and
Filmcentralen)
provided by
DBC Digital, a public company whose main mission is to develop and maintain the bibliographic and
IT infrastructure in the Danish libraries.
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4.
C
ONCLUSION
The Commission has accordingly decided that the measure does not constitute aid within
the meaning of Article 107(1) of the Treaty on the Functioning of the European Union.
If this letter contains confidential information which should not be disclosed to third
parties, please inform the Commission within fifteen working days of the date of receipt.
If the Commission does not receive a reasoned request by that deadline, you will be
deemed to agree to the disclosure to third parties and to the publication of the full text of
the letter in the authentic language on the Internet site:
https://competition-
cases.ec.europa.eu/search?caseInstrument=SA.
Your request should be sent electronically to the following address:
European Commission,
Directorate-General Competition
State Aid Greffe
B-1049 Brussels
[email protected]
Yours faithfully,
For the Commission
Margrethe VESTAGER
Executive Vice-President
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