Media Ownership Rules - Sweden

07 November 2002

Andreas Börjesson













SWEDEN

Introduction

Although there are rules preventing a non-EEA company from direct ownership in a Swedish newspaper, these rules can easily be avoided by the incorporation of a Swedish company by a non-EEA entity. With the exception of the aforesaid, there are, at present no foreign ownership or cross ownership restrictions in Sweden directly aimed at the media industry. Nevertheless, the issue being debated in Sweden currently is whether or not the general fair trade principles of the Swedish Competition Act are applicable to ownership aggregation in the media sector.

Although the Swedish Competition Authority seems to be of the opinion that the Competition Act is applicable to ownership aggregation in the media industry, the Swedish legislative bodies have expressed the opposite opinion, arguing that an application of the competition principles to ownership of media companies would be in direct conflict with the Swedish Constitution and the right to freedom of speech. The Competition Authority’s opinion regarding the applicability of the Competition Act has not yet been tried in court therefore the issue remains unresolved.

At the moment there is no support in Sweden for a change to the Swedish Constitution and new legislation in this respect will probably not be adopted for some years. We await the first court case under which the Competition Act’s applicability will be tested.

1. Television

  • Foreign Ownership Restrictions - Can a non-EU entity control the following broadcasting interests in Sweden?


Satellite yes
Cable yes
Terrestrial (analogue) yes
Terrestrial (digital) yes


  • Ownership Aggregation Limits -


No restrictions exist under Swedish law on the size of shareholdings in broadcasting entities or permitted concentration levels in the broadcasting market, nor control of market shares.

Under Swedish law a licence is required to broadcast television programmes via radio waves on any frequency under 3 GHz. Although no restrictions on the size of shareholdings exists, the granting of a television licence may contain conditions to ensure that the proprietary positions existing at the time a licence is granted continue to apply for its duration (to prevent the licensee restructuring, so that a new company effectively inherits the licence without having applied for it), violation of which may result in the licence being revoked.


2. Radio

  • Foreign Ownership Restrictions -


None


  • Ownership Aggregation Limits -


No restrictions exist under Swedish law on the permitted size of shareholdings in broadcasting entities or concentration levels in the broadcasting market, nor control of market share. Under Swedish law a licence is required to broadcast radio programmes via radio waves on any frequency under 3 GHz. Although no restrictions on the size of shareholdings exists, the granting of a radio broadcasting licence may contain conditions to ensure that the proprietary positions existing at the time a licence is granted continue to apply for its duration, (to prevent the licensee restructuring, so that a new company effectively inherits the licence without having applied for it) violation of which may result in the licence being revoked.

One radio licence per broadcasting area is permitted if no special exceptions apply.

A licence to broadcast local radio for a non-profit organisation may not be granted to a body which holds a commercial broadcast licence for local radio or digital audio radio.


3. Newspapers


  • Foreign Ownership Restrictions-


A company with a registered address outside the EEA may not publish a newspaper within Sweden. However, the entity could incorporate a subsidiary within Sweden or another EEA Member State, thus solving the problem through indirect ownership.[1]


  • Ownership Aggregation Limits -


None


4. Cross-media Ownership Restrictions


Television /Radio:

Local Level

i. Where there is limited capacity for local radio broadcasting, capacity is allocated as follows:

An applicant for a radio licence, which already holds a TV broadcasting licence, may see its application rejected for the benefit of another applicant who does not hold any other licences.

When deciding whether to grant a licence, an applicant’s financial and technical status as well as the volume of own content intended to broadcast are also considered.

Newspaper/radio:

i. An application for a radio licence by a newspaper publisher either with circulation in, or controlling influence over the media in the relevant broadcasting area, may be rejected if an entity with no proprietary interest in that media area also makes an application.


5. Local Competition Law Policy


It is not certain whether the general principles of fair-trading apply to the media industry, and in particular, whether merger control regulations set out in the Swedish Competition Act can penetrate the constitutional right of freedom of establishment protected by fundamental laws on the freedom of the press and freedom of expression.

A proposal for a new act to counteract media concentration was presented in February 1999, but it was subsequently revoked and thus never entered into force. The Swedish Government has since stated that new legislation is not being considered at present.

It has been argued that the introduction of legislative measures should not be considered unless developments such as a rapid change of ownership/power occur that threaten competition, pluralism and freedom of speech in the media market. Introducing legislation would require a change in the constitution, which takes several years.

In recent mergers between major Swedish newspaper publishers, The Competition Authority did apply The Competition Act. The Authority found that merger control rules would not interfere with the underlying objectives of the Constitution. However, no measures were ever taken to prevent a merger going ahead as the Authority found that none of the mergers created or strengthened an abuse of a dominant position. Thus, the interventions were not appealed and the Competition Authority’s opinion has never been tried in front of the Court.


Footnotes

[1] There is an ongoing discussion as to whether restrictions on foreign ownership should be introduced, which whilst not requiring a constitutional amendment, might lead to a conflict with Sweden’s obligations under the Rome Treaty.