SIM Report: New law poses risks for foreign media firms in Poland
On 11 August, a media reform bill supported by the ruling Law and Justice party (PiS) passed through parliament. PiS succeeded in passing the legislation despite the collapse of the United Right governing coalition by relying on smaller parties for votes. Under the legislation, only firms that are majority-owned by entities from the European Economic Area (EEA) can hold broadcast licenses in Poland. The law effectively prevents non-EU citizens and firms from owning a controlling stake in Polish media firms. The US warned Poland against adopting the legislation, which critics say will weaken independent media and reduce criticism of the government. The PiS narrowly passed the law, with 228 votes in favour compared to 216 against, and 10 abstentions.
A day earlier, one of the three ruling parties announced it would be withdrawing support after its leader Jarosław Gowin was dismissed by Prime Minister Mateusz Morawiecki. Gowin, the leader of the Accord party, was serving as deputy prime minister. Morawiecki and Gowin disagreed over a key tax bill, which the former deputy prime minister said would lead to ‘a drastic tax increase’ despite a government pledge that taxes would not be raised. Accord also opposed the media law.
The withdrawal of the Accord party was a significant blow to the right-leaning ruling coalition. Early elections remain a likely outcome as the loss of Accord’s 10 lawmakers cost the government its majority in parliament. Before Accord’s withdrawal, the coalition held 232 out of 460 seats. The implications of Gowin’s dismissal and the media bill are manifold. For example, without a majority in parliament, PiS’ legislative agenda will be stymied. Political debate around the media law also led to street protests against the legislation, with the opposition becoming emboldened by international criticism over the measure. US Secretary of State Antony Blinken said the new law ‘threatens media freedom and could undermine Poland’s strong investment climate’.
Some have argued the bill specifically targets US-based Discovery Inc, which owns TVN, one of Poland’s most popular television stations, and news channel TVN24. The license for TVN24 expires on 26 September. TVN said the bill was ‘an unprecedented attack on freedom of speech and the independence of the media’ that risks weakening Poland-US relations. Discovery will be obliged to sell its majority stake in TVN, and opposition parties have expressed concern that the station could fall into government hands. Discovery’s stake in TVN is one of the largest US investments in Poland, and the US-based media group threatened legal action against the Polish government on the basis that it violated a 1990 bilateral investment treaty between the US and Poland. The treaty binds the two countries to ‘fair and equitable treatment’ as well as ‘non-impairment by arbitrary and discriminatory measures’.
The media law represents a rare instance of increased US-Poland tensions despite traditionally very close relations. For non-EEA companies operating in Poland, it may signal an emerging trend of more political intrusion in the media industry, presenting operational and regulatory challenges to overseas commercial interests. Foreign media organisations operating in Poland, particularly those incorporated in non-EEA countries, should anticipate more scrutiny following the law’s adoption and an overall less amenable political environment.