Next month, the EU will decide whether to draft a directive to harmonize ownership rules of the 12 member countries that vary greatly. For example, in the U.K., newspaper, TV and radio companies are prohibited from owning more than 20% of one another; German publishers are allowed to own up to 50% of a TV company and in France publishers are allowed to own up to 49% of a TV company.
While media owners want harmony, they fear the European Commission, the EU's legislative arm, will pay too much attention to a recent report from the European Parliament calling for tighter controls on media in an effort to protect the diversity of culture and opinion. Media companies argue that it's a free market that promotes diversity, not tighter controls.
The report seeks to prevent concentration by restricting cross media ownership and creating a European Media Council as an independent watchdog.
Angela Mills, a consultant to the European Publishers Council, a lobbying group of Europe's leading publishers, said the report is based on the traditional belief that big media companies are monopolistic and that media concentration should be reduced for diversity of opinion.
Ms. Mills fears the Commission might try to find some legislative compromise among already too restrictive current national laws.
Jan Westerink,, an associate at Dutch publishing powerhouse VNU, is concerned that an EC multimedia directive might prevent his company from expanding into other forms of media, such as commercial TV, outside Holland. VNU's TV efforts so far have taken it into Belgium.
"We'd like the directive to be as unrestrictive as possible," he said. Mr. Westerink, who works in VNU's strategic development department in Haarlem, Netherlands, is helping his company, a leading publisher with more than 150 consumer and special interest magazines, newspapers and trade publications, explore possibilities for the future. He also is calling for any cross media legislation to apply to all media owners, not just European companies.
One existing U.K. law, for example, prevents a U.K. publisher from owning more than 20% of a TV station, while a foreign publisher can own 100%. Pearson, publisher of the Financial Times and a vocal member of the EPC, is looking for the Commission to eliminate unfairness, such as a German law that limits foreign investers to 20% of a broadcasting channel.
National laws already have contributed to holding down the size of European media companies compared to those in the U.S. and other nations. And they face growing competition from groups entering multimedia from telecommunications, computer and other industries.
A revealing ranking compiled by Rupert Murdoch's News International ranks AT&T as Europe's largest communications group by sales, followed by IBM, Matsushita, Philips and Sony. Also in the top ten are the national telecoms of France, Germany and the U.K. The first media group, Time Warner, does not appear until No. 13.
One bright spot is the U.K., where the government is reviewing lifting certain restrictions, including loosening cross-ownership requirements that now prevent newspaper publishers, TV companies and radio stations from owning more than 20% of companies in another medium.
The government, expected to announce its decision by June, is likely to enact changes in the U.K. media law early next year.
"If the U.K. gets it right, they could be a great influence on Brussels]," said Ms. Mills.