OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 4 September 2008 1(1)
Case C‑222/07
Unión de Televisiones Comerciales Asociadas (UTECA)
(Reference for a preliminary ruling from the Tribunal Supremo (Spain))
(Directive 89/552/EEC ‘Television without Frontiers’ – European works – Obligation on television broadcasters to pre-fund European cinematographic films and TV films – Language quota – Minimum level of harmonisation – Fundamental freedoms of the EC Treaty – Competition – State aid – Concept of State aid (Article 87(1) EC))
I – Introduction
1. Is it permissible for television broadcasters to be compelled by national legislation to commit a specific proportion of their revenue to the pre-funding of European cinematographic films and TV films the original language of which has to be one of the official languages of the Member State concerned? It is this issue that lies at the heart of this reference for a preliminary ruling submitted to the Court of Justice by the Spanish Tribunal Supremo. (2)
2. In the main proceedings, the Unión de Televisiones Comerciales Asociadas (UTECA), an association of commercial television companies in Spain, is contesting the obligation imposed on television broadcasters under Spanish law to contribute 5% of their annual revenue to the pre-funding of European cinematographic films and TV films whereby 60% of that funding is reserved for works the original language of which is one of the official languages of Spain. (3)
3. The Court of Justice is called upon to decide whether such national legislation is compatible with the ‘Television without Frontiers’ Directive, the fundamental freedoms of the EC Treaty and European law on State aid.
4. It goes without saying that the answer to this question has a significance to the cultural policies of numerous Member States and to the Community as a whole which should not be underestimated and that it will also have considerable economic consequences. The strong participation of a large number of national governments in the procedure before the Court of Justice demonstrates the interest that is being shown in this case.
II – Legal framework
A – Community law
5. The framework of Community law in this case is made up of various provisions of the EC Treaty, together with Directive 89/552/EEC (4) – also known as the ‘Television without Frontiers’ Directive – as amended by Directive 97/36/EC. (5) (6)
6. The general provisions in Chapter II of Directive 89/552 include Article 3(1), which is worded as follows:
‘Member States shall remain free to require television broadcasters under their jurisdiction to comply with more detailed or stricter rules in the areas covered by this Directive.’
7. Chapter III of Directive 89/552, which is headed ‘Promotion of distribution and production of television programmes’, includes inter alia Articles 4, 5 and 6.
8. Article 4(1) of Directive 89/552 provides:
‘Member States shall ensure, where practicable and by appropriate means, that broadcasters reserve for European works, within the meaning of Article 6, a majority proportion of their transmission time … This proportion, having regard to the broadcaster’s informational, educational, cultural and entertainment responsibilities to its viewing public, should be achieved progressively, on the basis of suitable criteria.’
9. Article 5 of Directive 89/552 contains the following rule:
‘Member States shall ensure, where practicable and by appropriate means, that broadcasters reserve at least 10% of their transmission time … or alternately, at the discretion of the Member State, at least 10% of their programming budget, for European works created by producers who are independent of broadcasters. This proportion, having regard to broadcasters’ informational, educational, cultural and entertainment responsibilities to its viewing public, should be achieved progressively, on the basis of suitable criteria; it must be achieved by earmarking an adequate proportion for recent works, that is to say works transmitted within five years of their production.’
10. Article 6 of Directive 89/552 defines the following terms:
‘1. Within the meaning of this chapter, “European works” means the following:
(a) works originating from Member States;
…
2. The works referred to in paragraph 1(a) and (b) are works mainly made with authors and workers residing in one or more States referred to in paragraph 1(a) and (b) provided that they comply with one of the following three conditions:
(a) they are made by one or more producers established in one or more of those States; or
(b) production of the works is supervised and actually controlled by one or more producers established in one or more of those States; or
(c) the contribution of co-producers of those States to the total co-production costs is preponderant and the co-production is not controlled by one or more producers established outside those States.
…’
11. The following explanatory statements are also to be found in the 13th, 19th, 22nd, 23rd and 26th recitals in the preamble to Directive 89/552:
‘[13] … this Directive lays down the minimum rules needed to guarantee freedom of transmission in broadcasting; … therefore, it does not affect the responsibility of the Member States and their authorities with regard to the organisation – including the systems of licensing, administrative authorisation or taxation – financing and the content of programmes; … the independence of cultural developments in the Member States and the preservation of cultural diversity in the Community therefore remain unaffected;
[19] … minimum requirements in respect of all public or private Community television programmes for European audiovisual productions have been a means of promoting production, independent production and distribution in the abovementioned industries and are complementary to other instruments which are already or will be proposed to favour the same objective;
…
[22] … it is important to seek appropriate instruments and procedures in accordance with Community law in order to promote the implementation of these objectives with a view to adopting suitable measures to encourage the activity and development of European audiovisual production and distribution, particularly in countries with a low production capacity or restricted language area;
[23] … national support schemes for the development of European production may be applied in so far as they comply with Community law;
…
[26] … in order to allow for an active policy in favour of a specific language, Member States remain free to lay down more detailed or stricter rules in particular on the basis of language criteria, as long as these rules are in conformity with Community law, and in particular are not applicable to the retransmission of broadcasts originating in other Member States’.
12. Additional reference should also be made to recitals 44 and 45 in the preamble to Directive 97/36, which are worded as follows:
‘(44) … the approach in Directive 89/552/EEC and this Directive has been adopted to achieve the essential harmonisation necessary and sufficient to ensure the free movement of television broadcasts in the Community; … Member States remain free to apply to broadcasters under their jurisdiction more detailed or stricter rules in the fields coordinated by this Directive, including, inter alia, rules concerning the achievement of language policy goals, protection of the public interest in terms of television’s role as a provider of information, education, culture and entertainment, the need to safeguard pluralism in the information industry and the media, and the protection of competition with a view to avoiding the abuse of dominant positions and/or the establishment or strengthening of dominant positions by mergers, agreements, acquisitions or similar initiatives; … such rules must be compatible with Community law;
(45) … the objective of supporting audiovisual production in Europe can be pursued within the Member States in the framework of the organisation of their broadcasting services, inter alia, through the definition of a public interest mission for certain broadcasting organisations, including the obligation to contribute substantially to investment in European production’.
B – International law
13. The Convention on the Protection and Promotion of the Diversity of Cultural Expressions (7) was approved by the United Nations Educational, Scientific and Cultural Organisation (Unesco) in Paris on 20 October 2005 with the support of the European Community and also most of its Member States. (8) The Unesco Convention came into force on 18 March 2007.
14. In the preamble to the Unesco Convention, it is affirmed inter alia that ‘cultural diversity is a defining characteristic of humanity’ (9) and that ‘cultural diversity forms a common heritage of humanity and should be cherished and preserved for the benefit of all’. (10) There is also acknowledgement of ‘the importance of cultural diversity for the full realisation of human rights and fundamental freedoms proclaimed in the Universal Declaration of Human Rights and other universally recognised instruments’. (11) The preamble also states ‘that linguistic diversity is a fundamental element of cultural diversity’. (12)
15. According to Article 1 of the Unesco Convention, its objectives are inter alia:
‘(a) to protect and promote the diversity of cultural expressions;
…
(h) to reaffirm the sovereign rights of States to maintain, adopt and implement policies and measures that they deem appropriate for the protection and promotion of the diversity of cultural expressions on their territory;
…’
16. Article 2(2) of the Unesco Convention gives the principle of sovereignty as one of its guiding principles, stating:
‘States have, in accordance with the Charter of the United Nations and the principles of international law, the sovereign right to adopt measures and policies to protect and promote the diversity of cultural expressions within their territory.’
17. In Article 5(1) of the Unesco Convention, the Parties,
‘… in conformity with the Charter of the United Nations, the principles of international law and universally recognised human rights instruments, reaffirm their sovereign right to formulate and implement their cultural policies and to adopt measures to protect and promote the diversity of cultural expressions …’.
18. Article 6 of the Unesco Convention is worded, in part, as follows:
‘1. Within the framework of its cultural policies and measures … each Party may adopt measures aimed at protecting and promoting the diversity of cultural expressions within its territory.
2. Such measures may include the following:
(i) regulatory measures aimed at protecting and promoting diversity of cultural expressions;
(ii) measures that, in an appropriate manner, provide opportunities for domestic cultural activities, goods and services among all those available within the national territory for the creation, production, dissemination, distribution and enjoyment of such domestic cultural activities, goods and services, including provisions relating to the language used for such activities, goods and services;
…’
19. In Article 20, the Unesco Convention regulates its relationship to ‘other treaties’ as follows:
‘1. Parties recognise that they shall perform in good faith their obligations under this Convention and all other treaties to which they are parties. Accordingly, without subordinating this Convention to any other treaty,
(a) they shall foster mutual supportiveness between this Convention and the other treaties to which they are parties; and
(b) when interpreting and applying the other treaties to which they are parties or when entering into other international obligations, Parties shall take into account the relevant provisions of this Convention.
2. Nothing in this Convention shall be interpreted as modifying rights and obligations of the Parties under any other treaties to which they are parties.’
C – National law
20. Spanish legislation on television and cinema includes Law 25/1994 of 12 July 1994, (13) which transposed Directive 89/552 into Spanish law. Article 5 of that law is headed ‘European works’ and has undergone several amendments. The provision of relevance in the present case is the version amended by Law 22/1999 of 7 June 1999 (14) and the Second Additional Provision of Law 15/2001 of 9 July 2001. (15)
21. This version of Article 5(1) of Law 25/1994 is worded as follows:
‘Television operators must reserve 51% of their annual transmission time for broadcasting European audiovisual works.
Television operators with editorial responsibility for television channels whose programming schedules include recently produced cinematographic feature films, in other words films which are less than seven years old by reference to their date of production, must earmark each year at least 5% of the total amount of revenue which, according to their operating account, accrued in the previous financial year for the pre-funding of the production of European cinematographic feature films and short films and TV films, including the cases provided for in Article 5(1) of the Law on the development and promotion of cinematography and the audiovisual sector. Sixty per cent of that funding must be used for productions whose original language is any of the official languages of Spain.
In that connection, TV films shall mean audiovisual works which have characteristics similar to cinematographic feature films, in other words, unitary works with a duration of more than 60 minutes and a final outcome, but which are distinguished by the fact that their commercial exploitation does not entail cinema exhibition; and operating revenue shall mean revenue derived from the programming and running of the television channel or channels which give rise to the obligation, as reflected in their audited operating accounts.
After consulting all interested sectors, the Government may enact regulations stipulating the duration which an audiovisual work is required to have in order to be regarded as a film made for television.’
22. The ‘Regulation governing compulsory investment for the pre-funding of European and Spanish cinematographic feature films and short films and TV films’ was approved by Royal Decree No 1652/2004 of 9 July 2004. (16) The regulation contains provisions implementing Article 5(1) of Law 25/1994 in relation to the funding of European cinematographic productions and regulating, in particular, how to calculate the turnover of television broadcasters and how to calculate the amount earmarked for acquiring European cinematographic productions. Under Article 7(1) of that regulation all expenditure incurred by a television broadcaster in its own productions, contracted productions, co‑productions and the acquisition of rights to transmit audiovisual works may be taken into account in relation to the pre-funding obligation.
23. As far as procedural law is concerned, the order for reference contains the following additional information: in Spain, legal persons governed by private law whose interests are affected by a regulation containing general provisions have legal standing to challenge those provisions and to claim that they should be annulled. Where those general provisions are enacted by the Cabinet it is for the Chamber for Contentious Administrative Proceedings of the Tribunal Supremo to rule on actions as the court of first and last instance, reviewing the lawfulness of the acts of the government.
III – Facts and the main proceedings
24. On 16 September 2004, the UTECA brought an action before the Spanish Tribunal Supremo (hereinafter also ‘the referring court’) contesting Royal Decree 1652/2004 and asking for it to be annulled.
25. The objective of the action is to ensure that the disputed royal decree and the rules of law on which it is based should be disapplied because, in the opinion of the UTECA, they infringe a number of provisions of the Spanish Constitution and also certain provisions of Community law.
26. The UTECA’s action is opposed by the Spanish State Administration, (17) by the Federación de Asociaciones de Productores Audiovisuales Españoles (FAPAE), which is a Federation of Spanish Audiovisual Producers’ Associations, and by the Entidad de Gestión de Derechos de los Productores Audiovisuales (EGEDA), a collection society safeguarding the rights of producers of audiovisual works.
IV – Reference for a preliminary ruling and proceedings before the Court of Justice
27. By judgment of 18 April 2007, received at the Court on 3 May 2007, the Tribunal Supremo stayed the proceedings before it and referred the following three questions to the Court of Justice for a preliminary ruling:
‘(a) Does Article 3 of Directive 89/552, as amended by Directive 97/36/EC, permit Member States to impose on television operators the obligation to earmark a percentage of their operating revenue for the pre-funding of European cinematographic films and TV films?
(b) If the reply to the previous question is in the affirmative, is a national measure which, in addition to laying down the pre-funding obligation referred to above, reserves 60% of that compulsory funding for original Spanish-language works compatible with that directive and with Article 12 EC, taken in conjunction with the other special provisions to which that article refers?
(c) Does an obligation imposed by a national measure on television operators to the effect that the latter must earmark a percentage of their operating revenue for the pre-funding of cinematographic films, where 60% of that amount must be earmarked specifically for original Spanish-language films the majority of which are produced by the Spanish film industry, amount to State aid in favour of that industry within the meaning of Article 87 EC?’
28. In the proceedings before the Court, the UTECA, FAPAE, EGEDA, the Governments of Greece, Spain and France, the Commission of the European Communities and the EFTA Surveillance Authority have submitted written observations and presented oral argument. In addition, the Governments of Belgium, Italy, Austria and Poland have submitted written observations.
V – Assessment
A – First question: compatibility of an obligation to pre-fund European works with the ‘Television without Frontiers’ Directive
29. By its first question, the Tribunal Supremo seeks an interpretation by the Court of Article 3 of Directive 89/552. In essence, the Court is asked to clarify whether a Member State is permitted to impose an obligation on television broadcasters – beyond the quota system in Articles 4 and 5 of that directive – to commit a specific proportion of their revenue each year to the pre-funding of European cinematographic films and TV films. In other words, the Court is being asked to determine the legislative latitude afforded to Member States under the ‘Television without Frontiers’ Directive with regard to the funding or pre-funding of European works.
1. Preliminary remarks
30. Under Article 3(1) of Directive 89/552 Member States are to remain free to require television broadcasters under their jurisdiction to comply with more detailed or stricter rules in the areas covered by that directive.
31. This provision expresses the concept that the ‘Television without Frontiers’ Directive does not effect full harmonisation of the legislation applicable to television broadcasters and simply lays down minimum standards for television broadcasts transmitted by them. (18)
32. It would, however, be wrong to assume that Member States may only introduce more detailed or stricter rules on television broadcasters within the scope of application of the ‘Television without Frontiers’ Directive. This might admittedly be suggested by the wording of Article 3(1) of Directive 89/552 with its reference to the ‘areas covered’ by the directive. In reality, however, this wording just helps to make it clear that Member States are permitted to exceed the minimum standards laid down by the Community legislature even in the areas covered by the directive. Apart from that, it goes without saying that national legislation affecting the activities of television broadcasters in other areas not covered by the ‘Television without Frontiers’ Directive is also permitted. (19)
33. It is therefore immaterial to the answer to the first question referred for a preliminary ruling whether national legislation which contains provisions on the pre-funding of certain European films, such as that in Spain, concerns an area covered by the ‘Television without Frontiers’ Directive or falls completely outside its scope of application. It is quite clear, in any event, that Member States are permitted to exceed the minimum standards laid down in the directive.
34. Nevertheless, the ‘more detailed or stricter rules’ adopted by Member States must not be contrary to the substance and objectives of the directive or be in breach of any other Community law. (20) The following paragraphs address the topic of these possible restrictions on the legislative latitude afforded to Member States.
2. No general prohibition on national pre-funding legislation
35. The ‘Television without Frontiers’ Directive does not lay down any concrete rules on the funding or pre-funding of European works. (21)
36. Conversely, however, the directive does not prohibit Member States from incorporating provisions on this topic into their national legislation. It cannot be concluded from the absence of any provision in the directive that Member States would be forbidden to adopt such legislation. On the contrary, according to the wording of its preamble, the ‘Television without Frontiers’ Directive states that the responsibility of the Member States with regard to the financing and content of programmes is to remain unaffected. (22)
37. Unlike the view taken by the UTECA and the Polish Government, therefore, the legislative latitude of the Member States under Article 3(1) of Directive 89/552 is not confined to laying down quotas for the transmission of European works on television and incorporating them into their national legislation to a greater or lesser extent. When promoting the distribution and production of European works they are not restricted to the instruments provided for in Articles 4 and 5 of Directive 89/552.
38. On the contrary, the concept of ‘more detailed or stricter rules’ that Member States are permitted to adopt under Article 3(1) of Directive 89/552 does conceivably encompass a wide spectrum of possible national measures. The Community legislature itself made this clear at the time of the amendments made to the ‘Television without Frontiers’ Directive in 1997, with many different circumstances being mentioned in recital 44 in the preamble to Amending Directive 97/36; the words ‘inter alia’ make it clear that this is not an exhaustive list. (23) In recital 45 in the preamble to Directive 97/36, express mention is even made of contributions towards ‘investment in European production’.
39. All in all, therefore, no general prohibition on a national pre-funding system such as that in Spain can be inferred from the ‘Television without Frontiers’ Directive. (24)
3. No prohibition on the inclusion of private television broadcasters in a national pre-funding system
40. In the opinion of the UTECA, Article 3(1) of Directive 89/552 only permits Member States to introduce stricter rules in relation to certain television broadcasters on which they have conferred a public service remit. It argues that the provision should be taken in conjunction with the protocol on the system of public broadcasting in the Member States. (25)
41. I do not share this view. In general terms, any distinction between private television broadcasters and public service television broadcasters or television broadcasters granted a public service remit is alien to the ‘Television without Frontiers’ Directive. Absolutely no basis for such a distinction is to be found in the wording of Article 3(1) of Directive 89/552 of relevance here.
42. When amending the directive in 1997 the Community legislature did admittedly make it clear that some television broadcasters might be subject to a public service remit that could include the obligation to contribute to investment in European productions. (26)
43. It cannot be concluded from this, however, that only television broadcasters with a public service remit may be called upon by law to pre-fund European works. On the contrary, Member States may also decide to impose such a statutory pre-funding obligation on all television broadcasters under their jurisdiction so as to thereby contribute towards the most effective realisation of quotas for the distribution of European works (see Articles 4 and 5 of Directive 89/552). (27)
44. All in all, therefore, no prohibition on the inclusion of private television broadcasters in a national pre-funding system such as that in Spain can be derived from the ‘Television without Frontiers’ Directive.
4. No contrary objectives in the ‘Television without Frontiers’ Directive
45. As far as the objectives of the ‘Television without Frontiers’ Directive are concerned, a look at its preamble shows that the Community legislature’s particular concern was to promote the production of European television programmes and European audiovisual works. (28) This is also reflected in Chapter III of the directive, which according to its heading relates not only to the promotion of distribution of television programmes but also to the promotion of their production.
46. A national system under which television broadcasters are obliged to contribute towards the pre-funding of certain European cinematographic films and TV films promotes the production of European television programmes and audiovisual works and is therefore in accordance with the objectives of the ‘Television without Frontiers’ Directive. (29) What is more, it is also justified by an overriding reason in the general interest within the meaning of the case-law of the Court of Justice on fundamental freedoms. (30)
47. Furthermore, realisation of the minimum quotas for the distribution of European works on television as laid down in Articles 4 and 5 of the ‘Television without Frontiers’ Directive would be illusory if European works could not be produced in sufficient numbers due to lack of appropriate funding. By taking measures to improve the funding of European productions through their national laws the Member States are also indirectly contributing towards the realisation of the above quotas.
48. It therefore follows that the specific aim of the directive, which is to promote the production of European works alongside their distribution on television, is not frustrated by national legislation by which television broadcasters are obliged to pre-fund certain European films. (31)
49. Nor does such a pre-funding scheme conflict with the main purpose of the directive, which is to ensure freedom to provide television broadcasting services in Europe. (32)
50. Generally speaking, the application of stricter national provisions does not necessarily frustrate the purpose of the directive, which is to ensure freedom to provide television broadcasting services. (33)
51. In this case, in particular, there is even less fear of that purpose being frustrated because foreign television broadcasters whose programmes are transmitted to Spain are not, in any event, subject to the pre-funding rule applicable there.
52. As far as television broadcasters established in Spain are concerned, they are admittedly obliged to pre-fund European works; however, this does not have any direct effect on their programming. On the contrary, the pre-funding obligation laid down by Spanish law serves only to satisfy more effectively the quotas laid down in Articles 4 and 5 of Directive 89/552 for the distribution of European works to which all television broadcasters established in the Community are subject.
53. The pre-funding obligation could be considered, at most, to have an indirect effect on a television broadcaster’s programming because of the effects on its budget. However, as the pre-funding obligation, at 5% of revenue, only affects a comparatively small proportion of a television broadcaster’s total budget, its effects would appear to be too insignificant and uncertain (34) to be regarded as seriously prejudicing its freedom with regard to programming and to therefore be capable of impeding its freedom to provide chosen television broadcasting services within the meaning of the directive.
54. All in all, therefore, the objectives of the ‘Television without Frontiers’ Directive are not frustrated by national legislation such as that in Spain by which a television broadcaster is compelled to pre-fund certain European films.
5. Miscellaneous
55. For the sake of completeness I will finally consider two other specific problems that the Tribunal Supremo has raised in connection with the first question referred to the Court for a preliminary ruling, which raise doubts as to the compatibility of a pre-funding system such as the one in Spain with the ‘Television without Frontiers’ Directive.
a) Is it permissible for certain categories of European works to be excluded from national pre-funding legislation?
56. The Tribunal Supremo points out in its order for reference, in particular, that the pre-funding obligation imposed on Spanish television broadcasters does not extend to all European works within the meaning of Article 6 of the ‘Television without Frontiers’ Directive but only to some of them – that is to say, cinematographic films and TV films the duration of which exceeds 60 minutes and which do not consist of several episodes.
57. As already stated, (35) the ‘Television without Frontiers’ Directive does not contain any provision compelling Member States to regulate the funding or pre‑funding of European works in their national legislation. Neither does it therefore contain any provision stating which European works might be permitted or obliged to form the subject of such a national pre-funding system. Member States are therefore free, in principle, to decide on the individual details of their pre-funding legislation and on which works are to benefit from compulsory pre‑funding.
58. Limits under Community law might nevertheless follow from the principle of equal treatment or non-discrimination, which is one of the general principles of Community law (36) and has to be observed by Member States within the scope of Community law. (37) Since, as already mentioned, the pre-funding system provided for in Spanish law serves to promote the production of European works, it affects the scope of application of the ‘Television without Frontiers’ Directive. (38)
59. The principle of equal treatment or non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. (39)
60. The Spanish pre-funding legislation undoubtedly provides for unequal treatment between cinematographic feature films and TV films with a duration of more than 60 minutes and other works, including television series. Whether these are situations that are comparable or different and whether there might be any objective justification for the pre-funding legislation depends on numerous factors in the assessment of which the national legislature is also afforded some latitude. (40)
61. The ‘Television without Frontiers’ Directive emphasises the need to promote independent producers, for instance. (41) It might also be proper to allow works that engender comparatively high production costs and the production of which occasions particular difficulties to benefit from a pre-funding system. Both points of view could lead to the conclusion that cinematographic feature films and TV films with a duration of more than 60 minutes are not comparable to other works, particularly television series, or that their unequal treatment is, in any event, objectively justified.
62. Because of the dearth of information available to the Court of Justice, however, it is impossible to arrive at a final conclusion. It is, in any event, for the referring court alone to evaluate the facts in the main proceedings and apply Community law to them. (42)
b) Is it permissible for television broadcasters with just a minimal range of feature films on offer from recent production to be compelled to pre-fund European works?
63. The Tribunal Supremo also stated in its order for reference that the pre-funding obligation is imposed on all television broadcasters which include in their programme schedule recently produced cinematographic feature films (43) even if their range of feature films on offer is minimal or hardly relevant to their programming.
64. As already mentioned, (44) Member States are, in principle, free to decide the individual details of their national pre-funding legislation. They are therefore permitted to determine which television broadcasters are to be subject to the pre‑funding obligation.
65. Limits under Community law might, at most, follow from the aforementioned principle of equal treatment (45) and from the principle of proportionality. (46)
66. First, as far as the principle of equal treatment is concerned, it would appear that the Spanish system at issue calls on all television broadcasters equally to pre-fund European cinematographic feature films and TV films. The referring court will have to examine whether the position of television broadcasters with a minimal range of feature films on offer is indeed comparable to the position of other television broadcasters. If this should not be the case, it will then be necessary to check whether their equal treatment with regard to the pre-funding system can nevertheless be objectively justified. The national legislature will also have to be afforded a degree of latitude in this connection too. (47)
67. As regards the principle of proportionality, it is settled case-law that that principle requires that measures adopted do not exceed the limits of what is appropriate and necessary in order to attain the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued. (48) In the light of the foregoing, the referring court will have to examine, in particular, whether the obligation to pre-fund European works could prove excessively onerous to television broadcasters with a minimal range of feature films on offer even though, at 5% of revenue, it only concerns a comparatively small proportion of those television broadcasters’ total budgets.
68. No final conclusion can be arrived at here based on the information available to the Court. As already mentioned, however, (49) it is for the referring court alone to appraise the facts in the main proceedings and apply Community law to them.
6. Interim conclusion
69. In summary, it must be concluded that:
Directive 89/552 in general and Article 3 of that directive in particular do not preclude national legislation under which a television broadcaster is obliged to commit a particular proportion of its revenue each year to the pre-funding of European cinematographic feature films and TV films. Such national legislation must be compatible with other Community law.
B – Second question: assessment of an obligation to pre-fund European works in certain languages in the context of fundamental freedoms
70. If the first question should be answered in the manner proposed by me, the second question will also require consideration. In essence, the referring court here would like to know whether a Member State may impose a statutory obligation on television broadcasters to allocate 60% of compulsory annual pre-funding to European cinematographic feature films and TV films the original language of which is recognised as an official language in that Member State. (50)
1. Preliminary remarks
71. According to the wording of the second question referred for a preliminary ruling, this issue relates to the interpretation of Directive 89/552 and the prohibition of discrimination under Community law.
72. As I have already stated with regard to Directive 89/552 in the context of the first question referred for a preliminary ruling, (51) it does not impose any requirement on national legislation as regards the funding or pre-funding of films. Such legislation must nevertheless be compatible with other Community law and with the fundamental freedoms of the EC Treaty in particular. (52) I will therefore only discuss the second question below from this perspective.
73. In so far as the second question refers to the general prohibition on discrimination under Article 12 EC, it should also be recalled that this provision applies independently only to situations governed by Community law for which the EC Treaty lays down no specific rules of non-discrimination. (53) Since, however, as will be demonstrated below, the present case does concern several fundamental freedoms under the EC Treaty, it is not necessary to go into Article 12 EC here.
2. Relevant fundamental freedoms and their limitation
74. The Spanish pre-funding rule requires television broadcasters to commit a certain percentage of their revenue to the pre-funding of European cinematographic films and TV films the original languages of which are one of the official languages recognised in Spain.
75. Such films could in theory be produced in all Member States. In practice, however, as established by the referring court, the majority of these films are produced in Spain. (54) In order to be able to shoot a film with one of the official languages of Spain as the original language, the actors, director, camera people, assistants and any extras all have to have an adequate knowledge of this language. Their knowledge of the language – in the case of the actors, in any event – will normally have to be so good as to be the equivalent of that of a person who has it as his or her mother tongue. (55) Within the Community these conditions are predominantly fulfilled in Spain or by Spaniards.
76. In the light of this one might well specifically examine the effects of the Spanish pre-funding legislation from the point of view of indirect discrimination on grounds of nationality, as suggested by the Tribunal Supremo and some of the parties to the proceedings. However, to take such a viewpoint would be to mistakenly confine consideration to just a particularly obvious effect of the Spanish rule, namely that television broadcasters are to a certain extent being encouraged to make investment in domestic film projects and at the same time being discouraged from making investment in foreign film projects. The concept of indirect discrimination would, however, have to be very widely interpreted to arrive at a wide appreciation of all other effects of the Spanish legislation, particularly its effects on the free movement of persons who produce films in Europe or assist in the shooting of films.
77. The effects of this Spanish legislation should therefore be examined as a whole from the perspective of a restriction on fundamental freedoms, that is to say a restriction on freedom to provide services (Articles 49 EC and 50 EC), freedom of establishment (Article 43 EC), the free movement of capital (Article 56(1) EC) and freedom of movement of workers (Article 39 EC). As is generally known, all of these fundamental freedoms encompass both a prohibition on discrimination and a prohibition on restriction. (56) There is a fluid borderline between indirect discrimination and restrictions. As it is, indirect discrimination is sometimes considered to be just a special instance of restriction of a fundamental freedom. (57) The fact that the very wording of three of the four fundamental freedoms affected does not refer to the concept of discrimination at all but to that of restriction (Articles 43 EC, 49 EC and 56(1) EC) also militates in favour of this view. The justification of restrictions and indirect discrimination is also essentially assessed in case-law according to the same criteria. (58)
a) Freedom to provide services (Articles 49 EC and 50 EC)
78. Freedom to provide services (Articles 49 EC and 50 EC) is affected, first, in so far as Spanish television broadcasters wish to acquire rights to broadcast films made by producers from other Member States. (59) In as much as the Spanish pre-funding system requires television broadcasters there to fund films in one of the official languages of Spain, it becomes less attractive to those television broadcasters to acquire the rights to broadcast films in other original languages as the acquisition of such rights to films in other languages is not taken into account in the context of the pre-funding obligation. This has a preponderantly adverse effect on films made by foreign producers. At the same time, it becomes less attractive to foreign producers to market the broadcasting rights to their films in Spain because the original language will not normally be one of the official languages recognised in Spain.
79. As the Commission has rightly observed, freedom to provide services is also affected from another aspect: where actors, directors and other persons involved in the shooting of a film do not have the status of workers, they are providing services to the film producer within the meaning of Article 49 EC. Because of the Spanish pre-funding system there is now an incentive for Spanish film producers to principally shoot films in the official languages recognised in Spain. It becomes correspondingly less attractive to Spanish producers for them to engage foreign actors, directors and other personnel in the shooting of their films because these people will generally be less conversant with the official languages of Spain than nationals of that country. At the same time, it becomes more difficult for such people to offer their services to Spanish film producers in the shooting of a film.
80. From all these aspects a pre-funding system such as the one in Spain therefore has the effect of restricting freedom to provide services.
b) Freedom of establishment (Article 43 EC)
81. A pre-funding system such as the one in Spain can have an effect on freedom of establishment (Article 43 EC) in two ways.
82. First, it can make it less attractive to Spanish television broadcasters to take over film production companies from other Member States or – with regard to co-productions, for instance – to acquire majority holdings in them. (60) Where such foreign film producers do not shoot films the original language of which is one of the official languages recognised in Spain, their activities cannot be taken into account with regard to the fulfilment of obligations on Spanish television broadcasters under the pre-funding legislation in that country. (61)
83. Second, it might become less attractive to foreign film producers and directors to establish themselves in Spain or found branches or subsidiaries there. If their films are shot in languages other than the official languages of Spain, they are unable to reap the benefits of the pre-funding legislation there.
84. From both these aspects a pre-funding system such as that in Spain therefore has the effect of restricting freedom of establishment.
c) Free movement of capital (Article 56(1) EC)
85. The free movement of capital (Article 56(1) EC) is affected in as much as television broadcasters just make capital available to foreign film production companies – in a co-production context, for instance – or simply acquire shares in them without obtaining a definite influence over their management. (62)
86. A pre-funding system such as the one in Spain can make it less attractive to Spanish television companies to make such investments in foreign undertakings. If those foreign film producers do not shoot any films the original language of which is one of the official languages recognised in Spain, for instance, their activities cannot be taken into account in the context of fulfilment of the television broadcasters’ obligations under Spanish pre-funding legislation. This constitutes a restriction on the free movement of capital. (63)
d) Free movement of workers (Article 39 EC)
87. If actors, directors and other people involved in the shooting of a film have the status of employees of the film producer and render their services to him in a subordinate capacity in consideration of payment, they constitute workers within the meaning of Article 39 EC. The above statements on freedom to provide services (64) apply to them mutatis mutandis: the pre-funding system gives Spanish film producers an incentive to mainly shoot films in the official languages recognised there. It becomes correspondingly less attractive to Spanish producers for them to engage foreign workers because they will generally be less conversant with the official languages of Spain than Spanish nationals. Conversely, it becomes more difficult for foreigners to apply for jobs offered by Spanish film producers. The freedom of movement of foreign workers is thereby impeded.
3. Justification
88. The Court has consistently held (65) that a measure that leads to a restriction on one of the fundamental freedoms guaranteed by the EC Treaty is warranted only if it pursues a legitimate objective compatible with the Treaty and is justified by overriding reasons of public interest. If that is the case, the restriction must be suitable for securing the attainment of the objective which it pursues and not go beyond what is necessary in order to attain it.
89. Put in more simple terms, therefore, the restriction on a fundamental freedom must pursue a legitimate aim and withstand a proportionality appraisal. (66)
a) Legitimate aim
90. The purpose of the Spanish pre-funding legislation is to promote the production of European films the original language of which is one of the official languages recognised in Spain.
91. It is apparent, not least of all from the ‘Television without Frontiers’ Directive itself, that this is an aim worthy of recognition since according to its preamble Member States must remain free to lay down more detailed or stricter rules ‘in particular on the basis of language criteria’ ‘in order to allow for an active policy in favour of a specific language’. (67) When the directive was amended in 1997 the Community legislature once again stressed that Member States should be permitted to bring in more detailed or stricter rules ‘concerning the achievement of language policy goals’. (68)
92. This open-minded approach taken by the ‘Television without Frontiers’ Directive to the promotion of particular languages is closely linked to the endeavour to continue to further the independence of cultural developments in the Member States – particularly in countries with a low production capacity or restricted language area – thereby preserving cultural diversity in the Community. (69)
93. This approach was greatly valued by the Treaty of Maastricht (70) and is now also reflected in primary law. The Community thus contributes to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore (Article 151(1) EC). It supports the action of Member States in inter alia improvement of the knowledge and dissemination of the culture and history of the European peoples and in the area of artistic and literary creation in the audiovisual sector (Article 151(2) EC). Respect for and promotion of the diversity of its cultures constitutes one of the Community’s main preoccupations in all areas (Article 151(4) EC), including its legislation in the audiovisual services field; it is ultimately an expression of the European Union’s respect for the national identities of its Member States (Article 6(3) EU).
94. Respect for and promotion of diversity in the cultural sector is also important to the European Union because it is this very diversity that is so characteristic of Europe and European culture. The idea of ‘unity in diversity’ therefore forms one of the cornerstones of the European Union, (71) whilst Article 22 of the Charter of Fundamental Rights of the European Union (72) states that the Union shall respect cultural, religious and linguistic diversity.
95. The importance of cultural diversity was also stressed at international level by the Unesco Convention. (73) The Unesco Convention specifically states that linguistic diversity is a fundamental element of cultural diversity. (74)
96. The European Commission similarly considers respect for linguistic diversity to be a core value of the European Union. (75) The Council of the European Union has also recently affirmed that the linguistic diversity of Europe should be respected. (76)
97. The cultural dimension of language is certainly not confined to the literary sector. In the audiovisual sector, in particular, it is also of vital importance to the preservation and expansion of cultures and to the reasonable dissemination of knowledge about them. If – for economic reasons – audiovisual works such as cinematographic films and TV films were only to be made in a single language or in just a few languages of a particularly widespread nature worldwide, this would necessarily mean that cultural diversity would be lost. Although subsequent synchronising of a film in different languages might make it more easily understood by a wider audience, it does not change its cultural background at all or the value judgements on which the film is based and which are disseminated by it.
98. The Unesco Convention therefore emphasises the sovereign right of States to adopt measures for the protection and promotion of the diversity of cultural expressions, including those in the cultural services sector. (77) The Convention expressly allows Contracting States to adopt measures regarding the language used for such services. (78)
99. The Community and the Member States that are Contracting States to the Unesco Convention have undertaken to take that convention into account when interpreting and applying other treaties, that is to say inter alia when interpreting and applying the EC Treaty. (79)
100. A review of the case-law of the Court over many years shows that it is quite possible for such account to be taken in the context of the EC Treaty. It has been ruled by the Court that ‘certain objects connected with the promotion … of culture’ may constitute overriding reasons in the general interest, (80) such as, for instance, conservation of the national historical and artistic heritage (81) and general interest in the proper appreciation of places and things of historical interest and the widest possible dissemination of knowledge of the artistic and cultural heritage of a country. (82)
101. In this case, it must also be mentioned, in particular, that the Court has accepted the promotion of films, (83) the creation and preservation of pluralism in radio and television (84) and the maintaining of a certain level of programme quality on radio and television (85) as reasons justifying a restriction on fundamental freedoms. It has also recognised, in principle, the right of Member States to promote their national languages and official languages. (86)
102. In the light of the foregoing, I am of the opinion that the Spanish legislature is pursuing a legitimate aim in the context of its measures to support the production of European works by furthering the promotion, in particular, of cinematographic feature films and TV films the original language of which is one of the official languages recognised in Spain.
b) Proportionality
103. It remains to be examined whether the Spanish pre-funding legislation pursues its legitimate aim by proportionate means. The Court has held that the obligation imposed on television broadcasters must be suitable for securing the attainment of the objective which it pursues and not go beyond what is necessary in order to attain it. (87)
104. An obligation on television broadcasters to contribute annually a particular proportion of their revenue to the pre-funding of European cinematographic films and TV films in one of the official languages of Spain is undoubtedly suitable for preserving that particular language and, along with it, the culture of Spain and parts of its country, as well as promoting their development and dissemination through the cinema and television. (88)
105. I would add that measures such as this, which preserve and promote the language and culture of a Member State or a region of the European Union, also always make a contribution towards the promotion of European culture in its entirety.
106. Somewhat more detailed consideration is required, however, with regard to whether the Spanish legislation as it stands is necessary to achieve the aim pursued or whether it exceeds the bounds of what is necessary.
107. In the opinion of the Commission, the Spanish legislation is too general and too vague. The Commission criticises the absence of objective and verifiable criteria from which it is possible to ensure that the pre-funding rule only extends to cinematographic feature films and TV films that can be categorised as ‘cultural products’.
108. Admittedly, the Court has already on one occasion, in the Distribuidores Cinematográficos case, rejected justification for Spanish legislation in the film promotion sector based inter alia on the argument that it promoted ‘national films whatever their content or quality’. (89) Advocate General Van Gerven had similarly rued the absence of any ‘quality control’ in the Spanish legislation in question. (90)
109. In my opinion, however, the judgment in Distribuidores Cinematográficos should not be applied to this case.
110. This case does not seem to me to be fully on a par with Distribuidores Cinematográficos. In that case, the provision at issue was one in which the reference to ‘Spanish films’ was only linked to the Member State in which a film was produced. In the present case, however, the connecting factor is a linguistic criterion. That linguistic criterion cannot be denied its cultural connection ab initio in the light of the aforementioned significance of language to the preservation and expansion of cultures and to reasonable dissemination of knowledge about cultures. (91) Unlike in the Distribuidores Cinematográficos case, therefore, the Spanish pre-funding legislation at issue here cannot ab initio be dismissed as a protectionist measure adopted solely on economic grounds.
111. Quite irrespective of the comparability of the present case with Distribuidores Cinematográficos, consideration should also be given to the negative consequences in the culture and media sector of a substantive and quality control that exceeds the bounds of a linguistic criterion.
112. The concept of culture in an open and pluralistic society is an extremely wide one. The forms of expression of culture are correspondingly numerous and this is also the case in the audiovisual sector. Apart from a few extreme cases not at issue here, (92) it would appear to me to be practically impossible to lay down objective and, in particular, fair criteria as to what is culture and, to an even lesser extent, as to what should constitute ‘cultural products’ eligible for assistance. Any attempt to do so would necessarily entail a risk of being hidebound by traditional thought patterns and especially of ignoring the dynamics of more recent cultural trends as well as the cultural activity of minorities in society.
113. Even if one were to venture to lay down objective criteria as to whether a cinematographic feature film or film made for television could be considered a ‘cultural product’ (93) or a ‘quality film, (94) the practical implementation of such criteria would involve a considerable degree of bureaucracy. In order to ensure a minimum level of legal certainty, it might be necessary for a State-appointed panel of experts or institution approved by the State to ultimately report on whether or not film projects should be taken into consideration with regard to pre-funding by television broadcasters. This might give the producers and artists concerned the impression that their film projects were being subjected to a State system of prior censorship.
114. Admittedly, all this does not preclude a Member State within its margin of discretion (95) from attempting to bring its promotion of films into line with substantive criteria or quality criteria. However, according to my understanding, it does not follow from Community law or from fundamental freedoms in particular that there is any obligation on Member States to inevitably base the promotion of culture on substantive or quality criteria.
115. Similarly, the Commission is admittedly at liberty – in the exercise of its wide margin of discretion (96) regarding authorisation of State aid to promote culture and heritage conservation (Article 87(3)(d) EC) – to adopt a restrictive approach and only authorise measures that relate to a ‘cultural product’ defined in detail. (97) Such authorisation practice on the part of the Commission in the context of State aid does not, however, prejudice the interpretation of other provisions of the EC Treaty, particularly fundamental freedoms. There is nothing to prevent Member States outside the State aid sector from waiving additional substantive or qualitative criteria and pursuing the promotion of culture as broadly as possible.
116. From the Community-law viewpoint, therefore, justification for a pre‑funding system such as the one in Spain does not necessarily require its scope of application to be restricted by objective and verifiable criteria to cinematographic feature films and TV films which appear particularly eligible for assistance as ‘cultural products’ or ‘quality films’.
117. Finally, it should be noted that, according to the information available to us, financial burdens such as those imposed upon television broadcasters under the Spanish pre-funding system are not completely disproportionate to the aim pursued. The percentage of annual revenue that Spanish television broadcasters have to commit to the pre-funding of films in one of the official languages of Spain appears, at 3%, (98) to be comparatively moderate. What is more, the Spanish system does not require television broadcasters to exclusively pre-fund films in the official languages of Spain. By setting a quota of 60:40, it allows them a not inconsiderable margin of discretion to invest in European film projects in other languages. According to the statements made by other parties at the hearing before the Court, television broadcasters are also able to invest in co-productions where the end product has several original languages on an equal footing. (99)
118. In the light of the foregoing, I come to the conclusion that a pre-funding system such as the one in Spain is suitable for attaining the linguistic and cultural policy aim pursued and does not exceed what is required to achieve that aim. Furthermore, it does not constitute a disproportionate burden on television broadcasters.
4. Interim conclusion
119. To summarise, therefore:
The fundamental freedoms in the EC Treaty do not prevent a Member State from adopting legislation requiring television broadcasters to earmark 60% of compulsory annual pre-funding for European cinematographic feature films and TV films the original language of which is recognised as an official language in that Member State.
C – Third question: concept of State aid
120. In its third question, the Tribunal Supremo asks for guidance regarding the concept of aid granted by a Member State or through State resources within the meaning of Article 87 EC. In essence, the referring court would like to know whether it constitutes State aid if a Member State imposes a statutory obligation on television broadcasters to earmark a particular percentage of their revenue each year for the pre-funding of European cinematographic feature films and TV films the original language of which is recognised as an official language in that Member State. The background to this question is the assumption made by the Tribunal Supremo that the majority of films pre-funded under Law 25/1994 (100) are produced by the Spanish film industry. (101)
121. All of the parties in the proceedings, apart from the UTECA, are assuming that there is no question here of any aid within the meaning of Article 87 EC. I concur with this view.
122. The classification of a measure as aid within the meaning of the EC Treaty requires fulfilment of each of the four cumulative criteria on which Article 87(1) EC is based. (102) These are the funding of a measure by the State or through State resources (first criterion), the favouring of an undertaking (second criterion), the selectivity of the measure (third criterion) and the adverse effect on trade between Member States resulting in a distortion of competition (fourth criterion). (103)
123. In this case, the first criterion, namely funding by the State or through State resources, deserves particular attention.
124. It is settled case-law that, in principle, it makes no difference to classification as aid whether an advantage is granted directly by the State or by public or private bodies which the State establishes or designates with a view to administering the aid; otherwise Articles 87 EC and 88 EC could be circumvented merely through the creation of autonomous institutions charged with allocating aid. (104)
125. However, for an advantage to be capable of being categorised as aid it must, first, be funded directly or indirectly through State resources and, second, be imputable to the State. (105)
126. Contrary to the view taken by the UTECA, recent case-law, particularly GEMO, Pearle and Others, Belgium and Forum 187 v Commission and Laboratoires Boiron, has not changed this at all. In Pearle, for instance, the Court found that there was no aid within the meaning of Article 87(1) EC precisely because there was no funding from State resources. (106) In GEMO, particular benefits were granted out of sums generated by a tax levied and administered by State authorities so that they were undoubtedly funded from State resources and required no further discussion. (107) The circumstances in Belgium and Forum 187 v Commission and Laboratoires Boiron were similar, the benefits there taking the form of exemption from State taxation; (108) admittedly, no money was paid by the State there but the State did nevertheless specifically waive revenues.
127. In this case, the amended Article 5(1) of Law 25/1994 which gives rise to the obligation on Spanish television broadcasters to pre-fund films is undoubtedly a State measure by the Kingdom of Spain. Any advantages accruing to film producers under this system can therefore be entirely imputed to the Spanish State. (109)
128. Under this system, there is no direct or indirect transfer of State resources to film producers, however. Admittedly, a monetary payment from State funds is not absolutely essential for such a transfer of State resources to occur. (110) Nevertheless, the money committed to the pre-funding of films must at least be available to the State (111) or lead to some kind of financial burden for the State (112) before it is paid out to the film producers concerned. This is not the case here.
129. First, only the funding by the television broadcasters concerned is used to pre-fund films under the system at issue, irrespective of whether they are films that they themselves have produced or films made by other producers. As far as can be ascertained, the Spanish State does not have any control over that funding at all, or any influence on how it is actually used; it cannot therefore be assumed that these resources would be available to it.
130. Second, the system of pre-funding of films does not result in any financial burden for the Spanish State. Such a burden on the State does not follow, in particular, simply from the fact that television companies might make less profit as a result of their statutory obligation to pre-fund European films so that the tax revenue received by the Spanish State might therefore be reduced. (113) The causal connection between the pre-funding of films and any reduction in tax revenues is too indirect and too uncertain to say that an advantage is being granted to the film producers at the expense of the State. Hence, this case differs fundamentally from cases in which a benefit afforded by the State consists of specific tax reductions or exemptions for certain undertakings so that reduced tax revenue to the State is sufficiently foreseeable and congruent with the benefit granted. (114)
131. Under its system of pre-funding of films, the Spanish State only imposes an obligation on certain undertakings – television broadcasters – by law to reserve part of their financial resources for a particular purpose, that is to say for the pre-funding of European cinematographic feature films and TV films in certain languages. Admittedly, the associated State challenge to the private autonomy of television broadcasters might afford economic advantages to certain film producers; however, these advantages are not funded from State resources but solely from the resources of the television broadcasters concerned. (115)
132. This is not precluded by the fact that the Spanish television broadcasters that are obliged to pre-fund films include broadcasting institutions governed by public law as well as some private undertakings. (116) Admittedly, resources administered by public undertakings or bodies governed by public law can be considered State resources in certain individual cases. (117) However, this is not always automatically the case; (118) this is only so where their resources are constantly under State control and therefore available to the competent national authorities. (119)
133. In most cases, broadcasting companies governed by public law enjoy special autonomy from the State, protecting them from State intervention not only in relation to their programming but also with regard to their expenditure. If such autonomy from the State is also afforded to Spanish television broadcasters governed by public law – which is for the referring court to determine – their financial resources certainly ought not to be considered State resources within the meaning of Article 87(1) EC. (120)
134. However, even if the referring court should come to the conclusion that Spanish broadcasting institutions governed by public law could be influenced by the State in relation to their expenditure, it should be borne in mind that, in any event, the allocation to the pre-funding of films at issue here is not the result of specific State influence on the broadcasting institutions governed by public law from which the existence of a hidden subsidy could be concluded. It is in fact based on a general statutory system the scope of which is not confined to just broadcasting institutions governed by public law but also encompasses a not inconsiderable number of private television broadcasters.
135. The new version of Article 5(1) of Law 25/1994 does not draw any distinction between private and public law television broadcasters. This provision is therefore comparable to all other State legislation which pursues an aim in the public interest – for example, health protection, environmental protection or road safety – to which both public and private establishments are subject.
136. For instance, a legislative provision stating that motorcyclists have to wear a helmet does not in itself constitute a system of aid for the benefit of undertakings that manufacture and sell those helmets even though some of the helmets might be purchased by the State for its police force. Even if a Member State were to legislate that helmets made by domestic manufacturers should be worn this would not be a problem relating to the law on aid but an issue to be resolved in the context of fundamental freedoms within the internal market, particularly in the light of legislation on the free movement of goods.
137. The same applies to a system such as the one at issue here, where Spanish television broadcasters are obliged in the public interest to contribute part of their resources to the pre-funding of European films. The mere fact that individuals have to make certain expenditure under a statutory system and that third parties benefit from it is not sufficient to make such a system a State-funded system of aid within the meaning of Articles 87 EC and 88 EC. The Community law effects of such a system are to be appraised in the context of fundamental freedoms in the internal market. (121)
138. It should therefore be concluded that a pre-funding system such as the one in Spain does not constitute aid granted by a Member State or through State resources within the meaning of Article 87(1) EC.
VI – Conclusion
139. In the light of the foregoing considerations, I propose that the Court answer the questions referred by the Spanish Tribunal Supremo as follows:
(1) Directive 89/552/EEC in general and Article 3 in particular do not preclude a national system by which television broadcasters are obliged to commit a certain proportion of their revenue each year to the pre-funding of European cinematographic feature films and TV films. Such a national system must be compatible with other Community law.
(2) The fundamental freedoms in the EC Treaty do not prevent a Member State from requiring television broadcasters by law to commit 60% of the annual pre-funding stated in the first paragraph to European cinematographic feature films and TV films the original language of which is recognised as an official language in that Member State.
(3) A system such as that described in paragraphs 1 and 2 above does not constitute aid granted by a Member State or through State resources within the meaning of Article 87 EC.