The Regulatory Authority for Social Communication (ERC) has put the new rules on media funding transparency out for public consultation. The document clarifies issues such as what is considered institutional advertising, in response to the European Media Freedom Regulation (EMFA), according to a report by ECO.
In the draft revision of the regulation, published in the Official Journal of the Union, the ERC introduces the mandatory disclosure by media outlets (MOs) of the “total annual amount” of state advertising. MOs will also have to report “the total annual amount of advertising revenue from public authorities or entities in third countries”.
These two obligations arise to comply with Article 6 of the EMFA, applicable since August 8th. The current regulation “does not yet include the annual public obligation to disclose those amounts,” explains the entity.
This measure “arises in a context where, in several European countries, the allocation of institutional advertising by the State as an influencing factor in defining the editorial line of certain media outlets has sometimes been questioned, seriously compromising their independence, pluralism, and freedom of the press,” explains the regulatory body.
But the changes don’t stop there, with the proposal detailing several other existing points to avoid ambiguities.
One of these cases is the duty to report the relationships of individuals or legal entities that represent more than 10% of total income. Now, the need for reporting is specified whether they are public or private entities, and it is added that it is also necessary to mention the basis to which these revenues refer.
If there is no data to report, the regulation now includes the need to “expressly declare this non-existence in the appropriate field of the digital platform.”
The ERC explains that this change “will allow for a more detailed reading of the financing structure” of the OCS, “making visible relevant concentrations of revenue and potential risks of economic dependence, including those of public origin.”
Regarding the declaration, even without data, it must “avoid omissions or blank fields that prevent understanding whether there has been non-compliance or whether, purely and simply, there are no values to declare.”
The new regulation also clarifies what is considered institutional advertising, including that contracted through agencies. “This precision is necessary to prevent the use of intermediaries from circumventing transparency obligations,” explains the regulatory body.
The ERC may also request reports from all companies in the imputation chain – or those sharing the same management. This prevents the “fragmentation of holdings or the use of different vehicles from diluting or concealing the media service provider’s exposure to institutional advertising revenue from public entities.”
Finally, the last of the major changes is the obligation for members of governing bodies and editorial directors to include in their biographical notes whether they have held political office – “functions likely to determine qualification as a politically exposed person” – in the last 12 months.
If the regulation goes ahead in its current form, with respect to the year 2025, the obligation to report institutional and third-country advertising revenue applies only to services provided after August 8, 2025.