Is THIS the end of German media regulation of platforms?

Rather inconspicuously, the Berlin Administrative Court issued a decision shortly before Christmas (see decision of 17 December 2024, ref. 32 L 221/24): Spotify does not have to implement the transparency requirements under Section 93 of the Interstate Media Treaty (MStV) for the time being. So far so unspectacular, you might think, unless you are Spotify or the Medienanstalt Berlin-Brandenburg. However, the decision of the Berlin Administrative Court is actually quite explosive – and explosive for the continued existence of German media regulation of platforms!

What are the proceedings about?

In summer 2024, the Medienanstalt Berlin-Brandenburg issued an administrative act against Spotify in which it

• found that Spotify’s transparency information did not meet the requirements of Section 93 MStV, and
• ordered Spotify to comply with the transparency requirements of Section 93 MStV.

Spotify took rescissory action against this administrative act and requested the Berlin Administrative Court to order the suspensive effect. The Berlin Administrative Court has now ruled on the request for ordering the suspensive effect.

What did the Berlin Administrative Court decide?

The Berlin Administrative Court ruled that Spotify does not have to implement the transparency requirements of Section 93 MStV for the time being. In its reasoning, the Berlin Administrative Court states that it considers the application of the transparency requirements of Section 93 MStV to Spotify to be contrary to EU law and therefore inapplicable. The Berlin Administrative Court will submit the question of whether this is contrary to EU law to the European Court of Justice (ECJ) for a decision.

Why is this decision so spectacular?

To understand the possible implications of the decision Berlin Administrative Court, it is important to bear in mind that key provisions of the MStV are not only applicable to platforms based in Germany. Rather, the relevant provisions of the MStV apply to all so-called media intermediaries, media platforms and user interfaces, provided that the media intermediary, the media platform or the user interface is intended for use in Germany (see Section 1 (8) sentence 1 MStV).

The provision of Section 1 (8) sentence 1 MStV means that a platform based in another EU country, such as Sweden or Ireland, must also comply with key provisions of the MStV. Being based in another EU country therefore does not “protect” against the applicability of German media law. In fact, the provisions of Section 1 (8) sentence 1 MStV extend the requirements of the MStV to all media intermediaries, media platforms and user interfaces that are active respectively usable in Germany.

But precisely THAT could now change!

This is because the Berlin Administrative Court assumes that the extension of the transparency obligations of Section 93 MStV via Section 1 (8) MStV to platform providers based in other EU countries violates the “country of origin”-principle set out in the E-Commerce Directive and is therefore inapplicable. If the ECJ agrees with the opinion of the Berlin Administrative Court, this could mean that provisions of German media law are not applicable to providers of media intermediaries, media platforms and user interfaces based in other EU countries! In fact, this could mean that large parts of German media law would exist only “on paper”, as a large number of platforms are not based in Germany, but in other EU countries.

How will the ECJ decide?

Based on the most recent case law of the ECJ, it is quite possible that the ECJ will agree with the opinion of the Berlin Administrative Court and consider the extension of the transparency obligations of Section 93 MStV to platform providers based in other EU countries to be contrary to EU law.

The ECJ already declared a national regulation to be contrary to EU law with reference to the “country of origin”-principle of the E-Commerce Directive (see ECJ (2nd Chamber) judgment of 9 November 2023, case no. C-376/22 (Google Ireland Limited and others v Kommunikationsbehörde Austria (KommAustria)). The ECJ ruling at the time concerned the Austrian Communications Platforms Act, which was intended to oblige platforms such as Meta, Google and TikTok to set up a notification and review procedure for alleged illegal content. At the time, the ECJ ruled that every platform is fundamentally subject to supervision in the “home Member State” and that two principles arise from this:

1.      it is (only) the responsibility of the “Member State of origin” (i.e. the Member State in which the platform is based) to regulate the platform (see para. 43), and

2.      each “Member State of destination” (i.e. the Member State in which the platform is used) must not restrict the free movement of platforms by imposing additional obligations (with the exception of the exemptions permitted by the E-Commerce Directive) (see para. 44).

These two principles were confirmed by the ECJ in another decision in connection with measures taken by the Italian authority AGCOM against Google (see ECJ (2nd Chamber) judgment of 30.5.2024, Ref. C-664/22, C-666/22 (Google Ireland Ltd/AGCOM), para. 58-61).

What does this mean?

For the German media authorities as well as for foreign providers of media intermediaries, media platforms and of user interfaces, the decision of the Berlin Administrative Court raises the fundamental question of whether and to what extent provisions of German media regulation are applicable to these platforms at all. Specifically, this raises two questions about very controversial topics of German media regulation, namely:

1.      must the requirements on “transparency disclosures” – especially on transparency about the functioning of algorithms – be implemented?

2.      must the requirements on “public value” – especially on sorting of channels according to the “public value” requirements – be implemented?

The ECJ could soon provide more clarity, at least with regard to providers of media intermediaries, media platforms and/or user interfaces based in other EU countries. Until then, there is now a state of uncertainty.