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Serbian government weaponized state-owned Telekom to curb media freedom?

Aleksandar Vučić; Photo: Tanjug / Sava Radovanović

Concerns about the already insufficient media pluralism in Serbia increased after a document emerged showing that the state-owned company Telekom intends to sign a contract with the private company Telenor in order to reduce the share of the cable television company Serbian Broadband (SBB) in the Serbian market.

However, this is not the first time that Telekom’s business decisions were considered to work directly against pluralism and media freedom. As EWB wrote earlier, opposition politicians claim that Telekom has been used to transfer taxpayers’ money to the accounts of companies owned by media moguls supporting the ruling Serbian Progressive Party (SNS).

In August 2020, Vice President of the opposition Freedom and Justice Party Marinika Tepić unveiled a 38-million-Euros-worth contract between Telekom and Wireless media, a company of Igor Žeželj, who is also the owner of the pro-SNS tabloid newspaper Kurir, one of the daily newspaper with the highest circulation.

According to Tepić, Žeželj used a part of the 38 million sum to buy the tabloid Kurir. Tepić reminded of the previously shifting allegiances of Kurir, which was at times harshly critical towards SNS and its leader Aleksandar Vučić. Under Žeželj’s ownership, the tabloid has been firmly pro-SNS.

Read more: State-owned company in Serbia financed pro-government media, opposition claims

At the beginning of 2020, cable operators operating under the Supernova, Radius Vector and Copernicus Technology brands, which are part of the Telekom group, did not renew the contract, effective until December 31, 2019, with United Media on broadcasting the channels of that media house, among which, in addition to sports and entertainment, there is also N1 news television.

This case also sparked reactions from the European Commission who said that “media pluralism must increase, not decrease”.

Another case happened in 2018, when Telekom bought the Kopernikus cable system. The previous owner of Kopernikus Srđan Milovanović, whose brother is a high-ranking SNS member, immediately afterwards bought two TV channels with national frequency Prva and O2, for an amount similar to what he sold his company to Telekom.

Also in 2018, users of SBB services who were following the TV program through the EON application on the MTS Telekom Srbija internet network, have been denied access to the N1 program through this application.

Even though Telekom denied that it had restricted its internet users access to the content of the SBB and TV N1 channels, SBB said that the N1 program was available on the MTS network, but, as they said, a decision was probably made in MTS to block that information program.

The newest controversy regarding the relations between Telekom and SBB can have huge effects on media freedom in Serbia. First, SBB broadcasts channels such as N1, Nova S and Newsmax Adria one of the few in Serbia that are not characterised as pro-regime, which was also noted by the international organization Reporters Without Borders (RSF).

The RSF representative for the Western Balkans Pavol Salaj told Radio Free Europe that media like N1, Nova S and Newsmax Adria provide the public with information that could not be heard in the state-controlled outlets.

“We are concerned that the agreement between the state company Telekom and the private mobile operator Telenor, could negatively affect media pluralism and further increase state influence in the media sphere. There is a risk that the Telekom-Telenor agreement could prevent the cable SBB operator from reaching a wider audience,“ said Salaj.

The second reason is the warning of experts in Serbia that if the agreement is approved, it threatens to become a monopoly agreement, hurting competition on the Serbian media market.

Read more: Do Telenor and Telekom endanger free competition on the media market in Serbia?

“Serbian Progressive Party wants to establish absolute dominance on the media scene”

Even though Telekom and Telenor issued statements regarding their contract, in which they pointed out that they “want to continue to develop the market” and that they “will always act and continue to operate in accordance with the laws”, Vukašin Obradović, journalist and former president of the Independent Journalists’ Association of Serbia (NUNS) pointed out for European Western Balkans that “unlike Telenor, whose motives are exclusively in the domain of financial gain, Telekom, as a majority state-owned company, wants to weaken the market position of SBB”.

“In other words, it wants to weaken the market position of the United Group, through a cartel association, and practically prevent it from financing media such as television channels N1, Nova S and Nova.rs portal from its own revenues – media that represent serious competition to the government-controlled propaganda machinery”, Obradović explained.

Project coordinator and researcher at the Balkan Investigative Reporting Network (BIRN) Tanja Maksić agrees, saying that this move is certainly more than business cooperation, which, as shown in the previous period, has greatly resulted in the narrowing of media freedom – reminding of the case of Kopernikus.

“The fact that Telekom is a state-owned company only gives this company an additional obligation to be responsible to the citizens, and sufficiently transparent in making such major business decisions. I see this as a serious blow to media pluralism, first of all, and then as a dangerous precedent that leads to greater consolidation and (impermissible) concentration of media ownership”, Maksić pointed out.

Obradović underlined that this is another in a series of moves by the ruling Serbian Progressive Party that wants to establish absolute dominance on the media scene.

“The President of Serbia Aleksandar Vučić’s appetites are growing inversely proportional to the problems that the government is facing at the moment or can be expected in the near and distant future. I am thinking primarily of the increasingly frequent corruption scandals within the ruling party, but also of the Kosovo problem, which must be resolved in absolute media silence and without dissonant tones”, said Obradović, adding that because of that, after establishing control over all commercial televisions with national frequency and with the dominant influence on the editorial policy of public services, the government is trying to expel critical media from the “cable”.

He explains that in this, again through Telekom, with the purchase of the cable operator Kopernikus and a number of smaller cable networks, it largely succeeded.

“The only one that resists is SBB, or United Group, which, despite everything, holds 53 percent of the cable space. The merger of Telekom and Telenor aims to significantly change that relationship, and if it fails to expel United Group and SBB, then to gain dominance in this part of the media scene by broadcasting through cable operators those televisions that have pro-government editorial policy”, Obradović pointed out.

“Restriction of the constitutional right of citizens to objective information”

The mentioned document, which N1 had an insight into, was presented to the management of the state-owned Telekom at the end of last year, and on December 1, the Executive Board confirmed the draft contract with Telenor.

After this document appeared in public, Telekom issued a statement pointing out that “SBB is afraid and, judging by the reaction, estimates that due to the development of Telekom, it will have a drop in market share to below 30 percent.”

“This is the best proof of the growth and development of Telekom in the last two years,” it was highlighted in the statement.

However, Obradović stressed that Telekom is practically, apart from the telecommunications company, a kind of “cudgel” in the hands of the government that is used to establish the complete domination of pro-government media.

“The agreement with Telenor is another attempt to prevent the citizens of Serbia from being informed from several different sources. Therefore, this agreement, if realized, could be a serious blow to pluralism in Serbia and further restriction of freedom of expression. ‘Destruction of SBB’ is a strategic move that aims to significantly limit the constitutional right of citizens to objective and impartial information”, said Obradović.

What will be the consequences if the contract is implemented?

Free competition in the market can be endangered in three basic ways: through restrictive agreements, abuse of a dominant position and through concentration of market participants. In the case of Telekom and Telenor, we are faced with the possibility that there is the first of these three situations – a restrictive agreement.

However, according to the Serbian law, restrictive agreements can be exempted from the ban if they contribute to the improvement of production and trade, and it is on the independent body called the Commission for Protection of Competition to decide whether this agreement will be exempted from the ban or not.

Obradović said that if the conclusion of this agreement is approved by the Commission, the law will be violated, but what is even more important and dangerous, Serbia will continue to quickly sink into media darkness and unanimity.

“Without an objective public service and critical media owned by United Group, the citizens of Serbia will be left to the propaganda machinery of the ruling establishment, and the state will get even closer to a naked autocracy in which the basic democratic rights of citizens are endangered”, highlighted Obradović.

He added that this agreement is also illegal because the just adopted Media Strategy and the valid Law on Public Information and Media prohibit the state from being the owner of the media.

“Since Telekom is a joint stock company with the majority state capital, this agreement reintroduces state ownership of the media because it is known that Telekom is also the owner of several TV channels”, said Obradović.

Maksić explained that the matter is further aggravated by the fact that the Serbian regulatory framework, the Law on Public Information and Media, does not have an adequate response to this situation, does not sufficiently recognize the vertical concentration of content producers and distributors, as well as the fact that our legislation does not recognize pluralism as one of more important criteria in assessing the concentration of ownership.

“Solutions from the new Media Strategy go in this direction, but as it has been shown many times, the practice always goes ‘ahead’ of the regulations”, said Maksić and added that the consequences of the Telekom-Telenor agreement would be a serious regrouping of forces in the field of cable operators, and the media that are the primary producers of content, as well as questionable quality of public information.

In addition, Maksić concluded, if such a situation arises, this will be a clear indicator of the consequences that large capital can have on the media system and completely reshape it to the detriment of citizens and their rights.

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