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Absolute prohibition on political parties having an equity interest in private broadcasting organisations contrary to the constitution
Press Release No. 28/2008 of 12 March 2008
Judgment of 12 March 2008
2 BvF 4/03
The application for judicial review submitted by 232 Members of the German Bundestag in respect of § 6.2 no. 4 of the Hessian Private Broadcasting Act (Hessisches Privatrundfunkgesetz – HPRG) which bans political parties and associations of voters from holding a direct or indirect equity interest in private broadcasting companies was successful. The Second Senate of the Federal Constitutional Court ruled in its judgment of 12 March 2008 that the challenged norm is incompatible with Article 5.1, sentence 2, GG (Grundgesetz – GG) in conjunction with Article 21.1 GG. The legislature is free to ban political parties from holding a direct or indirect equity interest in private broadcasting companies insofar as such an interest would allow them to exercise a controlling influence on the programme design or on the content of the programme. However, an absolute prohibition on political parties holding an equity interest in private broadcasting organisations is not compatible with the constitution.
The legislature is ordered to remedy the constitutional violation by implementing a new regulation by 30 June 2009.
Legal background to the proceedings:
Under the Hessian Private Broadcasting Act (HPRG), the organisation of broadcasts requires a licence to be issued by the Hessian Institute for Private Broadcasting (Hessische Landesanstalt für privaten Rundfunk). In accordance with § 6.2 no. 4 HPRG, the licence may not be issued to political parties or associations of voters or to businesses and associations in which political parties or associations of voters own an equity interest. The same applies to trust relationships. This provision is intended to ensure that not only political parties, but also companies in which political parties have an interest, are excluded from taking an equity interest in private broadcasters.
The radio station FFH, in which the Deutsche Druckerei und Verlagsgesellschaft (DDVG) indirectly held a 2.3444 per cent interest through various sub-participations, was affected by the new provision. The DDVG is owned almost exclusively by the Treasurer from time to time of the German Social Democratic Party (Sozialdemokratische Partei Deutschlands – SPD). He or she holds the equity interest in trust for the executive committee of the SPD. Following a corresponding request from the Hessian Institute for Private Broadcasting the DDVG surrendered its interest in the radio station FFH.
In essence, the decision is based on the following considerations:
I. § 6.2 no. 4 HPRG is formally compatible with the constitution and, in particular, the Land (state) Hessen has legislative competence. It is not a provision concerning the law of political parties (for which Article 21.3 GG prescribes federal legislative competence), but one regulating broadcasting rights. The central focus of the legislation is the procedure for licensing private broadcasting organisations. Seen in conjunction with the requirements for grant of a licence, by means of which inter alia other natural and legal persons with a proximity to the state are excluded from the circle of broadcasters, it becomes evident that we are dealing with a comprehensive provision intended to guarantee that broadcasting remains free of state intervention.
II. § 6.2 no. 4 HPRG is, however, substantively incompatible with the constitution. The absolute prohibition on political parties holding an equity interest in private broadcasting organisations violates Article 5.1, sentence 2, GG in conjunction with Article 21.1 GG.
1. In accordance with established case law of the Federal Constitutional Court Article 5.1, sentence 2, GG contains a requirement that broadcasting freedom be guaranteed; this requirement is intended to establish a framework which ensures that the full range of existing opinion finds expression as broadly and as comprehensively as possible. Article 5.1, sentence 2, GG also prescribes freedom of broadcasting from state intervention. The legislature is therefore precluded from making laws which permit the state direct or indirect controlling influence on a company that organises broadcasts. However, the guarantee of freedom of broadcasting from state intervention is not limited to merely prohibiting ownership of a controlling interest. On the contrary, any political exploitation of broadcasting is to be excluded.
The principle of freedom from state intervention must also be considered in relation to political parties. While these do not belong connected to the sphere of the state, political parties do have a degree of proximity to the state which requires that the principle of freedom from state intervention be taken into account when regulating the participation of political parties in broadcasting organisations. Compared to other social forces, political parties have a particular proximity to the state. It is in the nature of political parties that their efforts are directed towards achieving political power and they exert a decisive influence on appointments to the highest offices of government. Political parties influence the formation of government policy by working upon state institutions, primarily by influencing the decisions and actions of parliament and government. This means that certain individuals may simultaneously be members of a political party as well as part of an organ of state. Accordingly, the principle of freedom of broadcasting from state intervention must also, as a matter of principle, be considered in relation to the participation of political parties in the organisation and monitoring of broadcasting.
2. In granting licences to private broadcasters the legislature must have regard not only to diversity of opinion and freedom of broadcasting from state intervention, but also to the rights of private broadcasting companies and to the constitutionally guaranteed status of political parties. As a matter of principle, political parties may rely not only on freedom of opinion but also on freedom of broadcasting. The freedoms of communication arising out of Article 5.1 GG complement the particular role of political parties which is defined by the duty to actively cooperate as defined in Article 21.1, sentence 1, GG.
3. The legislature has broad latitude as regards regulating the extent to which political parties may acquire an interest in private broadcasting stations. It is free to deny political parties the licence to operate broadcasting stations insofar as they can exert a controlling influence on the design or the content of the programme. In such cases it is appropriate to exclude political parties in order to achieve and maintain diversity of opinion in broadcasting and to ensure freedom from state intervention, because the aims pursued through the achievement of freedom of broadcasting, and, in particular, freedom from state intervention, are otherwise at risk. A prohibition on political parties acquiring a controlling influence in private broadcasting companies serves to defend the design and content of programmes from intervention which has a proximity to the state. The legislature may not only act to avert the manifest danger of direct control or disciplining of broadcasting, but also indirect measures through which the programmes may be influenced or pressure may be brought to bear on broadcasting professionals. In the field of broadcasting, political parties are able to exercise influence in a manner that is hardly distinguishable from the influence exercised by the major parties and which appears to be “of the state”. Regulations of Land law which do not permit the grant of licences to political parties, associations of voters and companies or associations that are economically dependent on the same are therefore at any rate constitutionally unobjectionable. However, the legislature is not required to restrict itself to prohibiting control as defined in § 17 of the Stock Corporation Act (Aktiengesetz) when limiting the possibilities for political parties holding an equity interest in broadcasting companies. Of decisive importance is not merely the nominal interest in shares or voting rights, but the actual influence on the design and content of the programmes. It is the duty of the legislature to define suitable and comprehensible criteria to this end.
4. On the other hand, an absolute ban on political parties owning an equity interest in private broadcasters is not a permissible legislative formulation of freedom of broadcasting. The absolute ban on equity participation falls short of the reasonable balance to be struck by the legislature between the different legal positions. The resulting disadvantages for political parties are disproportionate to the extent to which aims pursued by the regulation are furthered, even if the far-reaching powers of formulation given to the legislature to further these aims are taken into account. The prohibition on any direct or indirect participation in private broadcasting organisations forces political parties to sell their shares even where they own only a negligible interest, regardless of whether the party could even exercise any influence at all on the respective broadcasting company with such a minimal interest.
Similarly, § 6.2 no. 4 HPRG infringes the rights of broadcasting organisations and applicants for a licence arising out of Article 5.1, sentence 2, GG. Especially in the case of minimal equity interests, it would require an extraordinary effort on the part of the companies concerned if they are to protect themselves (which they probably cannot with absolute certainty do) and ensure that there is not indeed some indirect minimal equity interest held by a political party creating a risk that the licence may be revoked or denied.
Insofar as parties to the proceedings cite the possibility that agreements may be reached and coalitions formed even with minimal share holdings as a justification for an absolute prohibition on share holdings by political parties in private broadcasting companies, this danger can be met by requiring that all equity interests be published.
The decision in Part II was reached by a majority of 5 votes to 3, the rest unanimously.