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State aid: EU Commission approves €32 million Danish scheme to compensate media companies for damage caused by decrease in advertising revenues due to coronavirus outbreak

The European Commission has approved under EU State aid rules a DKK 240 million (approximately €32 million) Danish scheme to partially compensate media companies for the loss in advertising revenues suffered due to the coronavirus outbreak. The scheme will be open to all Danish media companies irrespective of the type of media outlet (printed media or broadcasters).

Under the scheme, as notified by Denmark, media companies will be entitled to compensation for the damage suffered, in the form of direct grants covering up to 80% of the loss in advertising revenue incurred from 9 March until 8 July 2020.

The loss in advertising revenues will be calculated based on a comparison between each company’s advertising revenue and their average monthly advertising revenue in 2019. Furthermore, the scheme includes a claw-back mechanism, which ensures that public support received by the aid beneficiaries in excess of the demonstrated damage will have to be paid back to the Danish state.

The risk of the State aid exceeding the damage is therefore excluded. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors (in the form of schemes) for the damages directly caused by exceptional occurrences, such as the coronavirus outbreak.

The Commission found that the Danish scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage. The Commission therefore concluded that the scheme is in line with EU State aid rules.

More information on the actions the Commission has taken to address the economic impact of the coronavirus pandemic can be found here.

https://ec.europa.eu/competition/state_aid/what_is_new/covid_19.html

Arianna Podesta – T Giulia Astuti –