EC Watchdogs to Investigate Channel 4 Handout

04 April 2008

LONDON: The UK government's decision to grant £14 million ($27.7m; €17.8m) to state-owned but commercially funded broadcaster Channel 4, to offset digital switchover costs, has attracted the regulatory attention of the European Commission.

The EC says it has "serious doubts" that the proposed aid falls in line with its guidelines and it will probe whether it is likely to distort competition.

EC officials have received a formal complaint from an unnamed UK commercial broadcaster, arguing that Channel 4 "has ample and sufficient cash reserves" to fund the switch on its own.

The broadcaster, however, claims its role as a public service broadcasting rival to the BBC will be at risk unless it gets extra help.

It says: "This is a step we always recognised the Commission might decide to include in the process.

"As their statement makes clear, this is a specific proposal to examine the government's plan to fund Channel 4's switchover costs and they do not oppose state funding for broadcasters in principle."

Data sourced from Brand Republic (UK); additional content by WARC staff