Corporate news 21.7.2021 16:48

Court stays govt regulation on STA

Ljubljana, 21 July - The Administrative Court has granted the STA's request to stay the implementation of the regulation adopted by the government in June that introduces detailed rules governing the public service provided by the STA and its financing, which the STA is challenging on the grounds of its being unlawful.

The STA logo.
Photo: Tamino Petelinšek/STA
File photo

While the court is yet to decide substantively on the suit brought by the Slovenian Press Agency (STA), it decided to suspend its implementation pending a final decision arguing the arguments and documents presented by the STA indicate the likelihood of the agency sustaining damage that would be hard to repair if the challenged regulation was enforced.

The court notes that in arguing its case the STA has proved it has not received any payment for the public service this year from the government as defendant, where the Government Communication Office (UKOM) argues the reason for non-payment is that it has not signed any agreement with the plaintiff and has thus assumed no liability for payment.

The court also accepted as valid the agency's argument that the government or UKOM on its behalf is trying to force the agency into singing an agreement based on the regulation it is challenging with the threat of continued non-financing.

Since appropriate financing of the public service is essential for the agency to continue as a going concern, the court upheld the STA's argument that with the enforcement of the regulation the agency would sustain hard to repair damage.

The court established that with revenue from commercial services alone, the STA cannot cover even labour expenses, let alone other expenses, which could lead to its insolvency and ultimately to bankruptcy.

The court notes that STA financing is regulated in Article 20 of the STA act, thus the government as the defendant cannot invoke the challenged regulation as a means by which it would authorize UKOM to provide financing to the STA or that potential suspension of the regulation would stay all procedures as UKOM's powers would cease.

In response to the government's argument that the STA's existence is no longer jeopardised after the STA sold its claims against the founder, the court says only one monthly claim from May 2021 has been sold, which given the agency's dire financial state does not yet mean it is not facing the threat of hard to repair damage.

STA director Bojan Veselinovič hailed the court's decision as "yet another confirmation by the judicial branch of power that the government should have financed us long ago, an obligation imposed on it by 7th Covid relief act".

The act stipulates that the government provide financing to the STA this year in accordance with the agency's business plan regardless of whether an agreement has been signed or not.

"Nevertheless, the STA has been negotiating on its content, but not in ill faith like UKOM, which has drawn up a wording of the agreement without taking into consideration any of our key remarks. It was sent to us on Tuesday afternoon with an ultimatum for us to sign it by today, which suggests that the plaintiff may have been notified of the court's decision by then," said Veselinovič.

Since the proposed agreement was based on a regulation that was now stayed, the STA management will in a formal response to UKOM today call for financing to be provided immediately in line with the law.

Veselinovič said that the STA will also demand of UKOM to pay the promised advance even before the resumption of new talks, without setting any conditions, saying the agency's future is at stake.

The STA has notified the European Commission and international public on the latest developments.

Responding to the court's decision, UKOM rejected Veselinovič's claim that the STA's remarks had not been taken into account, arguing that several remarks had been included in the agreement.

It also said the STA continued to flaunt its public service obligation by refusing to let any media use content published as part of the public service, which is "a clear violation of the law".

The STA has argued in the negotiations that its public service license does not amount to other media being able to simply republish content without payment, it merely meant certain content was not paywalled.

According to UKOM, the proposed agreement would have released funding, but this is not possible now, which is why it has had to reject the request for payment of the public service fee for June.

A new agreement can be signed once it is "adjusted to the new circumstances" and assuming the STA recognises UKOM as the representative of the founder, it said.

Before the government regulation was adopted, UKOM was not explicitly named as the government entity responsible for the STA, a point invoked by the STA in its refusal to hand over the documentation UKOM had requested. Once the regulation named UKOM as the entity responsible, it received the requested documentation.