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Distribution of “forces”: Who is in charge?
The National Broadcasting Council, known by the Polish acronym KRRiT, is the state authority in charge of granting broadcasting licenses for television and radio companies.
The Council consists of five members (two appointed by the upper house of parliament - the Sejm, one by the lower house - the Senate and two appointed by the President). The adoption of a resolution on a license requires the consent of four members. Due to the distribution of forces in the Polish parliament and in the office of the President (majority of the Law and Justice party), the current composition of KRRiT is politically driven.
In accordance with the applicable domestic laws, KRRiT shall safeguard freedom of speech in radio and television, the independence of media service providers, the interests of service recipients and users, and ensure the open and pluralistic nature of radio and television broadcasting.
Current Polish TV market
The Polish television market has three major players: TVP (public broadcaster), TVN Discovery Group and Cyfrowy Polsat Group.
The TVN Group since 2018 has been owned by the US-based Discovery Group, which manages the company through Polish Television Holding BV, a company registered in the Netherlands.
Through this Dutch company, TVN, which held the terrestrial license in Poland from a very beginning, was controlled by the ITI Group, which was the founder of TVN back in 1996. In 2015, Scripps Networks Interactive took control of TVN following its sale. Discovery (US) became the owner of TVN in 2018 with the acquisition of Scripps.
Since the ruling Law and Justice party came to power in 2015, the party has turned state-owned television TVP into its mouthpiece.
Liberal broadcaster TVN, owned by the Discovery Group, is trying to balance the pro-government public media. TVN Discovery is also perceived as a broadcaster providing an informative feed to all sides of the political spectrum including opposition parties.
Many of TVN's programmes have revealed misconduct in the activities of the government and people associated with it. TVN's activity has been repeatedly criticised by the MPs of the ruling party. The main channels of the public television present people connected with TVN in an unflattering and often untrue way. As in other EU countries, in Poland, broadcasting a television channel requires a license. After examining the prerequisites, KRRiT issued a decision and granted the license for a period of 10 years. One of the elements that is subject to the regulator’s review is the capital and ownership composition of the broadcaster.
The license to a company with participation of foreign persons may be granted if the capital share of foreign persons in the share capital of a company - in the total number of shares of this company, does not exceed 49%. A license may also be granted to a foreign subsidiary of a foreign person, whose registered office or permanent place of residence is in a member state of the European Economic Area. This rule was introduced as a result of Poland's accession to the EU.
"Innovative" interpretation of the law
Over the years, the legitimacy of TVN's license despite the indirect change of control of TVN first to Scripps then to Discovery has not been questioned. The issue arose after TVN filed an application to renew its license for TVN24 channel. The application was filed more than a year before the expiration of the license. The Law and Justice party politicians spoke out against the threat of indirect control over media companies by non-EU entities. They also questioned the content of the news program TVN24 while simultaneously campaigning against TVN and Discovery Group.
In discussions with politicians and the National Broadcasting Council, TVN argued the KRRiT's hitherto uniform policy and the need to protect acquired rights. Typically, in similar cases, the license renewal procedure takes 30-60 days.
Not without significance were allegations of violation of a number of principles of constitutional freedom of economic activity, violation of basic principles of the EU and violation of the Polish-American Treaty on Mutual Investment Protection, which could result in high damages claims.
Eventually, the license was renewed on the last business day before the previous one expired with the simultaneous call by the KRRiT’s chairman to take steps to bring the capital structure into compliance.
Tremendous pressure to pass legislation solely to meet a political need
The inability to invoke the current provisions of the law prompted a group of the Law and Justice party MPs to propose and support an amendment to the law that would remove the possibility of holding and granting TV licenses to entities with indirect stakes in non-EU companies.
The draft provided for a six-month period to adjust the capital structure to such a requirement, which in practice meant that the TVN Discovery Group would have to sell its shares.
The amendment was called "Lex TVN" as the provisions were aimed directly against this company. No other broadcaster in Poland would be affected by the new legislation.
The proposal for the new provisions of the law was passed by MPs despite protests from the opposition and a large part of the public. It was eventually vetoed by the President primarily on the grounds that it was unconstitutional, constitutes a violation of broadcasters' acquired rights and a threat of damages resulting from a breach of an international investment protection agreement.
Is this the end?
The ruling party's persistence in harassing free media continues. At the moment, another TVN program, TVN7, an entertainment channel reaching viewers via digital terrestrial broadcasting (the widest range) and free of charge, is the subject of the proceedings for license renewal.
The deadline for the current license is 25 February, and the Council's behavior is the same as in the fall, when TVN24 was subject to license renewal. The same arguments are used in the proceedings, and the broadcaster incurs huge costs - but in the uncertainty of the existence of its channel.
TVN has already acquired a back-up license in the Netherlands, so that in case of a negative decision of the National Broadcasting Council (or no decision at all) it will be able to continue its satellite broadcasting. However, the change of broadcasting method will reduce the actual reach of the program by about 33%.
The government's activities in Poland are aimed at taking over or silencing free media.
Last year we had to deal with the takeover of the Polska Press capital group, one of the largest players in the media market in Poland, by the national oil giant - PKN Orlen (a state-owned company). Many editorial crews have disbanded or transformed over the past year. It is impossible to realize independent journalism under political oppression.
Thus, the tendency to create media and editorial offices that are financially dependent on viewers, listeners and readers is very visible nowadays in Poland. The most noteworthy are “Radio Nowy Świat” and “Radio 357” (both created by journalists who left the Polish Radio after the politically motivated changes at the leadership), OKO.Press newsroom and the independent podcast “Raport o Stanie Świata” (also by a former journalist of the Polish Radio).
As lawyers and citizens, we sincerely hope that these independent initiatives are proof that as long as there is a society that values free speech, tolerance and free media, journalism independent of state power will continue to exist in Poland.
Agnieszka Wiercinska-Kruzewska is a co-founder and senior partner at WKB, head of intellectual property and TMT team, also closely cooperates with the M&A team. A graduate of the Faculty of Law and Administration at Adam Mickiewicz University in Poznań, As a holder of the Soros Foundation scholarship at the Central European University in Budapest she completed an LL.M course in international commercial law. She advises clients on all aspects of copyright, industrial property, consumer law, unfair competition, personal data protection, internet domains, press law and protection of personal rights. Agnieszka has also extensive experience in legal advisory services concerning sensitive product marketing and gambling. Within her areas of practice, apart from providing ongoing advice, she represents clients in litigation and arbitration proceedings. She has many years’ experience in the acquisition of companies on private market.
Written by Agnieszka Wiercinska-Kruzewska & Paulina Maslak-Stepnikowska
WKB Wiercinska, Kwiecinski, Baehr
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The year 2021 was an extremely interesting year on the Polish television market. Unfortunately not because we experienced a spectacular launch of new players. The past year was full of attempts to limit media pluralism under the excuse of fighting for their independence from foreign influence.
Paulina Maslak-Stepnikowska is a member of the IP & TMT practice and specialises in intellectual property law, in particular copyright and industrial property, including in proceedings before national and international bodies. Paulina assists clients from the technology, retail, publishing and fashion industries (including press and book publishers, and shoes manufacturers) and the automotive market, advising on matters including national and international trademark protection, inventions, industrial and utility designs, as well as in contentious proceedings. She has advised entrepreneurs on developing strategies for the protection of products and technologies with regard to their commercialisation and distribution, as well as on infringements of their rights on the Polish and EU markets. Paulina has represented clients before courts, including the EU Trademarks and Designs Court in Warsaw, Polish Patent Office, EUIPO and WIPO. She is a recipient of a scholarship at the Ruprecht-Karls-Universität in Heidelberg and a graduate of postgraduate studies in intellectual property law at the H. Grocjusz Intellectual Property Rights Centre. She is also a co-author of a manual titled Turn Your Public On.