Court Ruling in Matter T-193/06 Regarding Subsidies For Cinema And Audiovisual Productions

25 October 2010

On September 13, the General Court rejected an appeal filed by TF1, the French television operator (hereinafter “TF1”), whereby they requested the annulment of the 2006 Commission’s Ruling approving French government subsidies of cinema and audiovisual productions.

French government rules include measures to promote cinema and audiovisual productions through, on the one hand, support for producers from the “Centre nacional de la cinématographie” (hereinafter “CNC”) (one of the most notable measures is the tax levied on television operator revenue) and, on the other hand, through obligations on television operators to invest in movie production and apply a percentage of their revenue to that end. Financed productions must have a producer who is independent from the television operator who is financing the project. The definition of an independent producer appears in France’s legislation, subject to a series of criteria including reciprocal ownership of corporate capital or the right to vote by the producer and by the operator in question and the role of the operator in said producer’s recent activity. Said criteria are also used as measures to support CNC audiovisual production.

TF1 alleged in their annulment appeal that the new measures introduced in French legislation amounted to illegal State subsidies and cited same as the grounds for filing the appeal with the Court of Justice. Said court rejected the appeal on the grounds that TF1 did not prove any effects on their competitive position in comparison with the other television operators or with the large audiovisual communications groups.

For further information, please contact Ángel Aldasoro: aaldasoro@mmmm.es