Freedom of the press and dissemination of financial data: what limits on the journalist's activity?

In light of the recent ruling of the European Court of Justice on the subject, it is interesting to understand which limits the EU places on the activity of journalists, with particular reference to the freedom to share information (in this case, of a financial nature) recognised to this professional figure.  

By its very nature, the journalists' activity is subject to several limitations that must be considered whenever they possess sensitive information, the dissemination of which must be evaluated on a case-by-case basis.

Recently, the European Court of Justice (ECJ) was called upon to render its opinion in the context of what was envisaged as an actual abuse of privileged information by the journalist, with the consequent possibility that its dissemination could be seen as a possible mean of manipulation of the relevant financial environment.

In the case at hand, the Paris Court of Appeal referred the decision back to the ECJ for a ruling on the preliminary question concerning the misuse of insider information that affected the performance of financial markets. In the case at issue, the journalist was exercising his profession when he became aware of certain sensitive information that he had communicated before publishing it in the newspaper for which he worked to a source of his own: this event (which concerned market rumours relating to the launch of takeover bids on listed companies) occurred twice and involving two separate, albeit similar, cases; in both of these circumstances, the value of the shares that the journalist would later mention in his articles had risen by several percentage points.

Considering this effect to be an unlawful consequence of the professional activity thus carried out, the competent French financial markets supervisory Authority decided to sanction the journalist with an administrative fine (equal to approximately EUR 40,000).

In this judgment, the ECJ recalled the content of Regulation 2014/596/EU, which (by repealing Directives 2003/6/EC and 2003/124/EC) defines “market abuse”, which is also identified as the abuse of inside information, its unlawful disclosure and consequent market manipulation) all those conducts "prevent full and effective market transparency, which is a fundamental requirement for economic actors to be able to operate in integrated financial markets."

In particular, this provision (Section 8) also stipulates that the abuse of information, thus defined, applies to any person who possesses inside information merely by having access to it "in the exercise of an occupation, profession or function". Regarding the latter specification, the subsequent Section 21 of the current Regulation no. 596 of 2014 clarifies that the dissemination of such information, where it occurs "for a journalistic activity or other forms of expression in the media [...] shall be evaluated taking into account the rules governing freedom of the press and freedom of expression in other media, as well as the rules or codes governing the profession of journalism"; these provisions find two essential limits that keep the sharing of such data lawful: no advantage or gain must result from it for the disseminator, nor must it be carried out to mislead the market about the supply, demand or price of financial instruments.

The ECJ, at the outcome of its examination of this case, held that, although the information in question was privileged and capable of entailing significant variations in the financial markets, its dissemination had been carried out in the context of the professional activity of the journalist who, therefore, could not be sanctioned for the mere fact of having acted under the services he was usually called upon to render and from the dissemination of which (as there was clear evidence) he had not obtained any advantage for himself or for individuals connected to him in any way.   

In conclusion, it must be held that the communication made by a journalist to one of his usual sources of information regarding the imminent publication of a press article under his signature reporting a market rumour takes place "for a journalistic activity" if it reveals to be necessary to enable the performance of a journalistic activity, which includes investigative work preparatory to publication, and if it complies with the principle of proportionality.

It should be added that the ECJ has recently ruled again on the liability of journalists through Judgment no. 245-2020. However, in this context, the professional liability of this figure was only marginally dealt with. In fact, in the judgment mentioned above, the European Judges focused on the lawfulness of the sharing of certain sensitive (better, “particular”) information by competent judges contained in the court files of an individual and his representative, according to the provisions of EU Regulation No. 679/2016 (GDPR); however, the judges also took the opportunity to establish the legitimacy of work carried out by a journalist, who had shared information related to an administrative proceeding and of which he had become aware thanks to the judges hearing the proceedings in question, who had disseminated his particular data.

Although, as mentioned, the ECJ focused mainly focused on the decision of whether or not, by such sharing, the involved Judges had violated the provisions outlined in the GDPR, they nonetheless referred to the - marginal - liability of the journalist who had taken advantage of such dissemination in order, in turn, to report the news, complete with the sensitive data of the individuals involved, to a broader audience. Again, given the interest in the disclosure of publicly relevant information and the fact that its transmission is part of the more general context of the journalist's professional activity, he was deemed to have acted within the scope of his duties and, therefore, his actions legitimate.