Supreme Court allows Bauskas Dzīve to continue litigation against Iecava Regional Council and opens the door for other private media to combat unfair competition by municipalities

17.02.2017

The Latvian Supreme Court (SC/Court) has decided to partially satisfy a complaint by SIA Bauskas Dzīve (Bauskas Dzīve), publisher of the newspaper Bauskas Dzīve, against a decision of the Administrative District Court, which had refused to initiate a case on the basis of Bauskas Dzīve’s application against the conduct of the Council of Iecava Region, publisher of the newspaper Iecavas Ziņas. The application sought a prohibition on publishing articles in Iecavas Ziņas that do not relate to the municipality's functions, to exclude Iecavas Ziņas from the mass media register, to prohibit Iecavas Ziņas’ operations in the advertising market and to compensate losses of more than 33,000 EUR.

Although the SC did not provide a comprehensive assessment as to what extent the conduct of the Council of Iecava Region should be considered to be legal by issuing the specific newspaper, the Court set strict rules that the newspaper (and any newspaper, in fact, issued by any municipality as a means of mass media) must observe, namely:

  1. the mass media must be used for the benefit of the entire public;
  2. publication must promote the principles and basis of the Latvian Constitution;
  3. unilateral emphasis on certain interests, some group or political grouping is banned;
  4. publication must reflect diversity of opinions, including the political opposition.

Likewise the SC stressed that “use of state funds for such mass media is justified only if the editorial part of the mass media meets the highest standards of journalistic quality (the truthfulness of published information has been carefully checked, diversity of opinions is appropriately reflected, and the principles of journalistic ethics have been observed).”

With this decision, the SC has partially bridged the legal gap that ruled over the so-called “municipal press”, which in fact simply imitated the free press and in essence should be recognised as advertising brochures for the municipality concerned.

The SC admitted that a top-level institution [Ministry of Environmental Protection and Regional Development] must ensure observance of these criteria, such as keeping to the main values of the Latvian Constitution and maintaining journalistic quality. Taking into account that presently almost none of the publications issued by municipalities in Latvia as a means of mass media meet these criteria, the ministry is expected to assess the conduct of municipalities when funding them.

In turn, with regard to operations by municipalities in the advertising market, the SC acknowledged that private mass media are entitled to go to court if these operations threaten their existence. In these cases the private mass media can claim:

  1. a stop on unequal conditions and eliminating the threat;
  2. a stop on or at least a decrease in the scope of activities by mass media funded by a local authority in the advertising market;
  3. a stop on subsidies from state funds or introduction of a suitable funding mechanism.

On the one hand, the SC decision builds a strong foundation for Bauskas Dzīve to continue protecting its rights in court against the Iecava Regional Council; on the other hand, the decision opens the door for other regional mass media to go to court against municipalities when their informative publications unfairly compete in the advertising market. In addition, the means of protection indicated by the SC are sufficiently wide to enable each of the private mass media to claim a satisfactory solution to the situation.

In this case, Bauskas Dzīve has been pro bono assisted by Sorainen partner Agris Repšs, senior associate Andris Tauriņš and associate Jorens Jaunozols

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