(CN) – A Greek law allowing minor shareholders of television companies to be penalized for improper content violates European Union principles, the Court of Justice ruled.
The Greek National Radio and Television Council in 2001 levied a fine of what now amounts to about $41,000 against minority shareholders of the Nea Tileorasi company, which owns the Star Channel television station.
The council accused the entertainment network, in the court’s words, of failing to “respect the character, honour, reputation, family life and presumption of innocence” of two singers and a fashion designer during news broadcasting in 2000.
Certain Greek judges sided with Idrima Tipou, which owned a 5 percent stake in Nea Tileorasi, in saying that the law improperly makes shareholders liable for a company debt.
The Luxembourg-based Court of Justice first interpreted EU law as allowing shareholders to be held liable for a fine imposed on their company. The court then examined the Greek legislation, which allows fines against shareholders in a TV station if they have at least a 2.5 percent stake in it. (The law also limits shareholding by any single entity to 25 percent).
Because a 2.5 percent stake is not enough to control a company, shareholders are induced to create alliances, which deter investors and affects market access, especially for investors from other EU member states, the Court of Justice reasoned.
The law, intended to make TV companies comply with national legislation and journalistic codes of conduct, was created at a time when numerous journalists held more than a 2.5 percent share in a television station, the court explained.
But Greek law shouldn’t assume that all holders of more than 2.5 percent of a company’s shares are journalists, as many may be “ordinary” investors, the court added.
The Greek law, by applying to any holders of more than 2.5 percent of shares in a TV company, makes the non-involved investor a victim of decisions on broadcasting content in violation of the EU principles of freedom of establishment and of the free movement of capital, the court ruled.
It concluded that the Greek law need to use more appropriate penalties at its disposal, including suspending broadcasting or revoking the operating license of a TV channel that violates professional conduct.