Good News for Cash?

Good News for Cash?

They were a hot topic last autumn: the house searches that were ordered by the Public Prosecutor’s Office for Economic Affairs and Corruption (the Wirtschafts- und Korruptionsstaatsanwaltschaft or WKStA) against former Austrian Federal Chancellor Sebastian Kurz and employees close to him. What is the political, moral and, above all, legal relevance of this accusation of “systematically bought opinion”? 

The accusations made by the public prosecutor’s office are serious indeed: Sebastian Kurz and his closest associates allegedly bought surveys, designed them in line with their ideas and then had them published and allegedly used advertisements to garner favourable coverage of Sebastian Kurz. In short, the team who worked closely with the former chancellor allegedly influenced editorial reports in Österreich and OE24 by booking advertisements via the Ministry of Finance. 

Specifically, this concerns the labelling of paid publications, which is standardised in Section 26 of the Media Act (MedienG). This states that announcements, recommendations and other contributions and reports for the publication of which payment is made must be marked as an “advertisement”, “paid inclusion” or “advertising” in periodical media (i.e. in publications that are released on a regular basis) unless doubts about the remuneration can be excluded by design or arrangement. 

According to legislators, it is to be assumed that money has changed hands if the media owner receives a pecuniary advantage for the very publication of the article or similar. As a result, what matters is the inseparable link between publication and the pecuniary advantage obtained by the owner of the media in question. Violations of Section 26 of the Media Act are, on the one hand, subject to sanctions under administrative criminal law while, on the other hand, they may also constitute an unfair act within the meaning of Section 1 of the Act against Unfair Competition (UWG). 

The provision of Section 26 of the Media Act was introduced on the grounds that the public readership places greater trust in editorial contributions than in paid advertisements because the latter obviously serve the interests of those who pay for them. As a result, advertisers sometimes seek to give advertisements the appearance of editorial communications in order to give them more journalistic weight. The purpose of this provision is not to prevent people from reading paid advertisements, but rather to avoid deception as to the interests of the authors. In this respect, section 26 of the Media Act is a consumer protection provision. 

As a result, the Supreme Court is of the opinion that, today, the average attentive and critical reader assumes that even editorial contributions in periodical media are not neutral and have no claim to absolute objectivity, because they come from journalists, who are usually named, expressing their personal opinions, be it on political, scientific or economic matters. Insofar as the articles are recognisable upon even cursory inspection as being advertising messages in the interests of a particular company (or a political party), the public can no longer be deceived about the underlying interests at play. This rules out a violation of the principle of obviousness and the principle of truth – because the average reader might believe that they are not looking at an advertisement but at an editorial contribution. 

A business advertisement camouflaged as an editorial violates the provision of section 1 of the Act against Unfair Competition for the same reasons that are responsible for the introduction of section 26 of the Media Act: deceiving the public about the true interests of the author behind the article thus also violates the principle of obviousness that characterises competition law and the principle of truthfulness that is closely interwoven with it. It is therefore anti-competitive to disguise an advertising measure in such a way that it is not recognisable as such to the person being advertised to. 

If there is no information provided about the paid-for nature of the article in the form of the expressions listed in section 26 of the Media Act (such as “paid advertisement”), the design or arrangement of the text must leave the reader in no doubt as to the fact that money has changed hands. The yardstick here is the reader, whose attention, experience and expertise are assumed to be at an average level. 

The topic of transparency in the media sector is extremely multifaceted and has occupied the worlds of politics and jurisprudence for many years. In this context, it is particularly worth recalling the “advertising affair” associated with former SPÖ Chancellor Werner Faymann, which revolved around the transparency of the media towards the public. The idea that media must be transparent towards the public is inextricably linked to the weight of the media in the process of shaping public opinion. The importance of the (mass) media as the “fourth estate” in a democratic state governed by the rule of law and their role as a factor in the formation of public opinion is guaranteed by the general freedom of expression as defined in Article 10 of the ECHR. 

Thus, over the past few years or decades, numerous obligations placed on media owners have been enshrined in law, for example, the obligation to publish an imprint or to disclose information according to sections 24 or 25 of the Media Act. In a Western democracy in the 21st century, the independence of the media must be preserved at all costs: this is a prerequisite for the media to be able to exercise its role as the “fourth estate”. If money is sneakily changing hands in the form of (advertising) contracts or media subsidies that are not identified as such, it is hard for the media to exercise this role, and its position can no longer be ensured. 

The system of paid-for reporting is questionable in many respects besides the legal assessment. In addition to the accusation of a power grab in the ÖVP, and subsequently in the Federal Chancellery of the Republic, as well, the involvement of a major Austrian media group is also worrying from the point of view of transparency in the media sector. This affair puts this transparency at risk, while also demonstrating a concerning amount of political influence on media reporting. 

It therefore remains to be seen how the current investigations will proceed. As usual, we must assume that all involved are innocent until proven guilty.


Dr. Julia Andras, Attorney-at-Law and Managing Partner at LGP
Mag. Daniel Söllner, Associate at LGP

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