Croatian Parliament recently adopted the final draft of the new Electronic Media Act (the Act), which entered into force on 22 October 2021.
Even prior to the amendments to the Act, each concentration in the media sector had to be notified to the to the Croatian Competition Agency (CCA), irrespective of whether it met the thresholds set out in the Competition Act. However, under the old regime, parties to such concentrations first had to obtain the expert opinion of the Agency for Electronic Media (AEM) in order to determine that the proposed transaction was not prohibited under the Electronic Media Act; only thereafter could parties notify the CCA of the proposed concentration.
The new Act has simplified this procedure to a certain extent, as the CCA must now request the expert opinion from the AEM, rather than the relevant parties. If the AEM's opinion is not delivered within 30 days of the receipt of the request, the CCA will deem that the AEM has no objection to the proposed concentration and it may continue with the procedure under the standard competition regulations. In practical terms, this procedural change will have a positive effect on the relevant parties as it will relieve them from an additional administrative burden. It also seems more appropriate for this procedure to be regulated by the Electronic Media Act, rather than competition bylaws.
Another of the few improvements that has been implemented by this Act is the elimination of the provision on the vertical integration. Consequently, operators can now also be broadcasters, which was prohibited by the previous version of the Act. This amendment was welcomed by both broadcasters and operators, since it is one step closer to liberalising the legislation.
The new Act also introduced the turnover threshold for determining the dominant undertakings in the electronic media sector – namely, if one media service and/or electronic publications provider has a 40% market share based on the total annual turnover generated on Croatian territory, such a provider will be deemed to be in a dominant position and will not be allowed to:
- acquire new shares or new concessions; or
- do business with a new electronic publication service.
The turnover referred to above will include only the turnover that is generated by the national public radio and television broadcaster, based on the performance of its commercial activities.
To protect pluralism and electronic media diversity, the following situations will be considered as impermissible ownership change (ie, prohibited concentrations, as previously defined by the original act):
- the broadcaster has a state concession and shares of more than 25% in another broadcaster of the same or lower level of concession (concession levels being state, regional or local) and vice versa;
- the broadcaster has a state concession and shares in the capital of a daily newspaper publisher with a print circulation of over 3,000, with shares of more than 10%, and vice versa;
- the broadcaster has a state concession and a daily print circulation of over 3,000, and vice versa;
- the broadcaster has regional or local concession and shares in another broadcaster in the same domain, or of a higher or lower level, with more than 30%, and vice versa; and
- the broadcaster has concession and shares in marketing agencies (ie, legal entities that provide advertising, design and mediation services) with more than 10%, and vice versa.
By Ana Marjancic, Attorney at Law in Cooperation with Schoenherr