European Commission Investigates C4 State Funding

BRUSSELS, April 3: The
European Commission has opened an investigation into the state aid proposed by
the British government to assist Channel 4 in the digital transition process.

The Commission will
investigate whether this subsidy threatens to distort competition in the U.K.
market. Competition Commissioner Neelie Kroes commented: “The Commission is
firmly committed to encouraging the digital switchover process, which has many
advantages for consumers and innovation. However, it needs to make sure that
any state support does not distort competition unduly.”

The ad-supported Channel
4, which does have a public-service remit although it receives no public
funding, has been pledged £14 million to help it meet the capital costs of the
analogue switchoff. The Commission notes that a rival commercial broadcaster
has complained about this government assistance, on the grounds that Channel 4
has sufficient cash reserves to meet the switchover costs.

The Commission says it has
“serious doubts” as to whether the aid is necessary and proportional and does
not overcompensate the British commercial broadcaster.

—By Mansha Daswani