Newstalk, the radio station owned by Denis O'Brien, has complained to the European Commission that RTÉ's use of licence fee funds is in breach of EU rules on State aid.
RTÉ’s commercial activities are “not being carried out on market terms”, the station claims.
The lodging of the complaint follows a row that erupted between Newstalk and RTÉ earlier this year when RTÉ declined to run an advertisement for its rival on the basis that the submitted ad was in breach of its guidelines. Newstalk responded by making a complaint to the Competition Authority.
Call to intervene
The radio station, which is part of Mr O'Brien's Communicorp group, has now upped the ante by calling on the European competition watchdog to intervene in the State's payment of the licence fee to RTÉ.
"In examining the case we made to the Competition Authority, it emerged that RTÉ, in our view, is using licence fee money to subsidise their commercial activities, which is discriminating against us," said Newstalk chief executive Gerard Whelan.
The EU’s stance on State aid for public services broadcasters “isn’t cut and dried”, Mr Whelan said. However, he said Newstalk’s complaint was “a very comprehensive document put together by our lawyers” and that it “brought a number of recent precedents to the attention of the European Commission”.
The move “can’t be regarded as anything other than serious”, he added. “Obviously Communicorp would pause before going down this road and would take advice from our lawyers.”
Below cost claims
The complaint also outlines the backdrop to RTÉ’s decision not to run an advertisement for Newstalk and claims that the public service broadcaster is distorting the market by selling radio advertising below cost.
RTÉ said that as the complaint about the rejected ad was still being considered by the Competition Authority, it could not comment on Newstalk’s EU complaint in any detail. However, it said believed it operated in full compliance with the Broadcasting Act 2009. “ RTÉ aims to maximise revenues across all trading divisions while reducing operating costs,” its statement said.
RTÉ has always operated under a dual-funding model. Last year it received €182 million in licence fee revenue and collected €145 million in commercial income, while it has cut its operating costs by €130 million since 2008. The rejected advertisement instructed RTÉ's audience to "move the dial" on their radio sets to Newstalk, which last year poached presenter Pat Kenny from RTÉ's ranks. RTÉ said in May it was standard practice among media organisations not to accept ads that contained explicit calls to defect to a rival and that it was inaccurate to suggest RTÉ was abusing its position in this regard.
