TF1 says France Télévisions support is illegal state aid in EC complaint

Credit: Nathalie Guyon (Source: France Télévisions)

France’s TF1 has filed a complaint against public broadcaster France Télévisions with the European Commission about alleged illegal state aid.

The complaint rests on an argument that state finance for the pubcaster is not linked to clear obligations and adequate control mechanisms, according to Le Figaro, which first confirmed news of the filing.

The case put forward by the commercial broadcaster hinges on the French government’s decision to replace the former licence fee model with allocation of a part of VAT receipts to finance the pubcaster, which it says should have been subject to a notification to the EC before being implemented, in line with state aid rules.

The complaint attacks what the broadcaster claims to be a ‘double fiscal fraud’. The VAT-based finance mechanism controversially introduced by the government in 2022 required France Télévisions to be subject to a payroll tax levied on organisations that are exempt from paying VAT. According to the complaint, the French state is compensating this in an illegal way by augmenting the budgetary allocation granted to the pubcaster.

France Télévisions has, since 1969, been subject to a reduced VAT levy, paying 2.1% instead of the full rate of 20%, that enabled it to avoid paying payroll tax – an obligation it should have been subject to, in the view of TF1.

The controversial VAT-based support mechanism has also separately been subject to criticism that it undermines France Télévisions’ independence as the government can change this at will, something that would be more difficult with a household-based tax.

Unfair competition

France’s commercial broadcasters have previously attacked what they regard as unfair competition by France Télévisions. Last May they banded together to send a letter to then prime minister Elisabeth Borne slamming the editorial decisions taken by the pubcaster to air programming that directly competed with commercial offerings on its flagship France 2 channel.

TF1, M6, Canal+ and Altice, which operates commercial channels BFMTV and RMC, alleged that the pubcaster has been allowed to take advantage of an unbalanced regulatory regime to “develop an astonishingly commercial programming line-up on its big channels, in particular France 2” at the expense of programming more in line with its public service remit, which has effectively been ghettoized in smaller channels France 4, Culture Box or the group’s digital platforms.

Unlike France Télévisions, whose mission is set by a government decree that covers all of its output, the commercial channels have to sign separate agreements with audiovisual regulator ARCOM covering the output of each individual channel.