Media Pluralism in Eastern Europe Under Pressure
Several private Polish radio stations went silent last week. The front pages of many Polish newspapers and news portals as well as the screens of private TV stations remained black. In a joint action with the slogan "Media without a choice", they protested against the plan of the national populist PiS government to introduce a tax on the advertising revenues of media companies and to make cinemas and providers of large outdoor advertising spaces pay. The government calls the tax a "solidarity fee" to help finance spending on health care and the cultural sector, which have increased due to the Corona pandemic.
The proposal has heightened concerns about the fate of media pluralism in Poland. In an open letter to the government, more than 45 independent TV and radio stations, internet portals and print media stated that the introduction of the tax would lead to the weakening or even dissolution of some independent media, which generate their income mainly through advertisements. They were equally critical of the instrumentalisation of the pandemic as a pretext for an attack on the Polish media landscape, which was already severely hit by the Covid 19 crisis.
The opposition also came out clearly against the planned advertising tax. "The goal of the PiS government is to gain full control over the media landscape in Poland," wrote the leader of the liberal Nowoczesna party Adam Szłapka on Facebook. The advertising tax, he said, is another instrument to destroy liberal democracy and drive Poland out of the European Union. Senate Marshal Tomasz Grodzki of the opposition Civic Platform tweeted: "Free media is a pillar of democracy and a guarantor of pluralism, a dam against being flooded by propaganda and lies on Polish state TV."
Criticism also came from abroad. Christian Wigand, spokesman for the EU Commission, expressed the EU's deep concern about Polish media policy in a statement: "We too have seen the black screens. Our concerns about media pluralism in Poland are well known and have been outlined in our report on the rule of law."
Who is Affected by the Advertising Tax?
Poland's Prime Minister Mateusz Morawiecki (PiS) justifies the tax as part of the broader European strategy to tax large digital companies like Facebook and Google. However, the proposed tax primarily hits domestic media stakeholders. Depending on the company's revenues as well as the type of advertising, the tax rate would range from 2 to 15 per cent of advertising revenues.
Newspapers with national and regional editions whose advertising revenues are around 3.5 million euros, such as the most influential opposition newspaper Gazeta Wyborcza, would be hit hard. According to Polish publishers, under the new tax regime, companies such as Google could pay 11 to 22 million euros in taxes per year, while the amount paid by locally operating media companies could be around 180 million euros annually.
According to experts, the new tax would particularly affect media companies critical of the government, first and foremost the Agora media group, which publishes the daily Gazeta Wyborcza; the Polish subsidiary of the German-Swiss Axel Springer AG group, which publishes the Polish newspapers Fakt and Newsweek Polska and holds the majority of shares in Poland's largest internet portal Onet.pl; as well as the American broadcaster TVN.
Unlike many private media, the public broadcaster TVP and the state radio station, which have become a mere mouthpiece of the government in recent years, would not face existential hardship because they are already heavily subsidised by the state. Critics of the tax pointed out that although the new advertising tax would also apply to the public service media, theoretically they could get the money back from the state fund for cultural promotion. The fund would be financed by the revenues of the advertising tax.
Following Orbán's Example?
According to critical voices, the current initiative of the Polish government must be seen in the broader context of its efforts to "re-polonise" the Polish media and thus extend control over the media in the country. For years, PiS has pursued the goal of transferring foreign-owned publishing houses into (government-affiliated or government-owned) Polish hands, thus forcing media companies with foreign capital out of the market.
For example, the Polish state-controlled oil company Orlen recently announced that it would buy the regional newspaper group Polska Press, which publishes 20 out of a total of 24 of Poland's leading regional newspapers, from the German publishing group Verlagsgruppe Passau (VGP). Although Orlen - interestingly enough - now co-signed the open letter of protest against the advertising tax to the government, many observers pointed out that the planned buyout of the regional newspaper group by Orlen was in fact a government takeover and in itself a threat to the independence of the local media.
The Polish government's strategy largely follows a "script" that the American publicist Fareed Zakaria has called "illiberal democracy". Formally, democratic mechanisms apply in an "illiberal democracy", but its constituent pillars of value, such as pluralism or freedom of opinion, are creepingly suspended. Thus there is no direct attack on press freedom in Poland in the sense of censorship or expropriation of private media. Nevertheless, media are robbed of their advertising revenue under pretexts, or generous buy-out offers are launched by financially strong state-affiliated groups such as Orlen. These methods are more difficult to legally prosecute than direct attacks on media freedom.
It is in this context that government critics interpret the current plan: the tax is a further step by the government to weaken the opposition media and restrict press freedom in Poland. They fear that Poland will follow Hungary's example: "In reality, the model comes from Hungary," explained Agnieszka Burzyńska of the Polish tabloid Fakt. "There, Prime Minister Viktor Orbán also first declared war on the big giants like Google. But he didn't defeat a giant, he finished off all free media and subordinated them to himself." Orbán's government destroyed most independent media in Hungary through various regulations, the withdrawal of advertising revenue by the state or entrepreneurs close to the government, and buyouts of entrepreneurs close to Orbán.
Already in 2016, the largest-circulation national daily newspaper Népszabadság, which reported critically on Orbán's government, was surprisingly shut down. Origo.hu, one of the leading independent news magazines in Hungary, was brought into line with the government after it was sold by Hungarian Telekom in 2015. After the sacking of the editor-in-chief of Hungary's most widely read liberal news website index.hu in the summer of 2020, protesting against the planned restructuring of the publishing house, more than 80 employees handed in their resignations. The last independent Hungarian radio station, Klubrádió, lost its licence last week. According to independent studies, almost 80 percent of the Hungarian news market is now more or less directly under government control.
Ultimately, Orbán's actions have created a blueprint for the Polish government's current actions. The developments in both countries are worrying. Since taking office in 2015, the PiS has pushed through a series of controversial media laws. In the international ranking on press freedom by Reporters Without Borders, the trend has been consistently on the decline. In 2015 Poland ranked 18th, and by 2020 it had slipped to 62nd place. Hungary is now in 89th place out of 180. The fact that the EU member states, which have to sanction the rule of law in all EU countries, have done too little for too long is now taking its toll.
Rule of Law in Jeopardy - Why the EU Must Act Now
The governments in Poland and Hungary have come under frequent criticism in recent years for their violations of the rule of law principles of the European Union. The EU opened proceedings against both countries under Article 7 of the EU Treaties for violating fundamental values. In the case of Poland, Brussels criticises in particular the controversial judicial reform, which undermines the independence of Polish courts, as well as the government's attacks on minority and women's rights. Hungary is accused of enacting controversial laws that restrict the independent functioning of non-profit organisations and universities as well as freedom of the press. However, the action has not yet produced concrete results. As the push for an advertising tax on media companies in Poland shows, the trend towards an " illiberal democracy" in Poland is unbroken.
At the end of 2020, Poland and Hungary first blocked the EU's Multiannual Financial Framework until 2027 and the associated Corona Recovery Fund, as they rejected the rule of law mechanism associated with it, i.e. linking EU funds to compliance with rule of law principles. In the end, the German EU Presidency negotiated a compromise with Poland and Hungary, but the actual effectiveness and enforceability of the mechanism is now being questioned by some experts.
The disturbing developments in Poland and Hungary need to be closely watched in the West. Free and independent media and rule of law principles are the cornerstones of democracy. The EU must no longer stand by while these values are undermined in its member states. Professor of European Studies at Oxford University, Timothy Garton Ash, also calls for greater international attention towards Poland: "Jarosław Kaczyński has regarded getting media under control as a top priority for a long time and he has made no secret of the fact. I really want to emphasise that this is the fight for the core of democracy. You are not going to be able to have free and fair elections unless you have strong independent media."
Natálie Maráková is a project manager at the Friedrich Naumann Foundation for Freedom's Central Europe and Baltic States Office in Prague.
Dr Detmar Doering is the project director of the Friedrich Naumann Foundation for Freedom's Central Europe and the Baltic States Office in Prague.