Threats to Media Freedom Can Hurt Investment Prospects in Poland

08.23.2021 | Anna Kompanek
Palace of Culture and Science, Warsaw, Poland.

Media freedom is the cornerstone of democracy, yet in many countries around the world independent media outlets are under threat. The latest example comes from Poland where – despite widespread public protests – the Parliament advanced a new law restricting foreign ownership of local broadcasters. The law limits foreign ownership of majority shares in Polish media to European entities. Ostensibly the rationale has been to strengthen national security by inhibiting corrosive Russian or Chinese influence, but Poland already has legislation in place for screening foreign investment and there is no significant presence of capital from authoritarian states in the country’s media landscape. Instead, the law de facto targets one broadcaster: TVN, an independent TV channel majority-owned by Discovery, a U.S. media group.

The government’s stated policy of “repolonization” of privately-owned media is aimed at influencing editorial content and from that perspective this new law is just the next logical step.

Dubbed “lex TVN” by critics, the law – if implemented – would force Discovery to sell its assets in Poland to a bidder more willing to toe the government’s line. Earlier this year, Polish state-owned oil company PKN Orlen completed a controversial purchase of Polska Press, the biggest player in Poland’s local media market that owns hundreds of local newspapers and websites, from its German owner, Verlagsgruppe Passau. The government’s stated policy of “repolonization” of privately-owned media is aimed at influencing editorial content and from that perspective this new law is just the next logical step.

This troubling development does not come as a surprise to those who have been following illiberal tendencies in Poland, clearly inspired by similar policies introduced earlier in Hungary to undermine independent media. Poland fell to its lowest-ever position – 64th out of 180 countries – in the 2021 edition of World Press Freedom Index compiled annually by Reporters Without Borders. In Hungary, which scored 92nd, the government and aligned oligarchs now control the vast majority of the media after seizing the public media and a concerted campaign of takeovers Fidesz took power in 2010.

The implications would go beyond media freedom and negatively impact foreign investment climate in Poland more broadly.

The situation in Poland is not as dire as in Hungary – yet. The controversial new law so far only passed the lower house of Parliament (Sejm) and would still need to be approved by the upper house (Senate) and the President. Discovery is also considering legal action under a U.S.-Poland investment pact if negotiations with the government fail. Should this law come into effect, it will have a chilling effect on media freedom in the country, removing an important independent media source trusted by millions of Poles. Importantly, the implications would go beyond media freedom and negatively impact foreign investment climate in Poland more broadly.

Closing space for the media, wherever it occurs, is a warning sign for investors since it indicates larger threats to democratic and economic freedoms. With economic growth everywhere significantly weakened by COVID-19, declining rule of law is not a strong selling point to attract much-needed investments, create jobs, and get the economy back on track.