Media Plurality Test - Competition Law - Lecture Slides, Slides of Competition Law and Policy

Download Media Plurality Test - Competition Law - Lecture Slides and more Slides Competition Law and Policy in PDF only on Docsity! The development of a media plurality test in the UK: Criteria and competence Docsity.com Communications Act 2003 Deregulatory thrust of the 2003 Act, which removed many of the existing ‘structural’ media ownership restrictions, eg it removed all restrictions on accumulations of TV licences. The Act was influenced by: Technological developments, especially scope for enhanced transmission capacity from move to digital terrestrial TV, Policy goal to create internationally competitive UK firms. Docsity.com Enterprise Act 2002, Section 58 Print merger considerations: accurate presentation of news, and free expression of opinion, the need, to the extent reasonable and practicable, for a sufficient plurality of views in newspapers in each market for newspapers in the UK, or part of the UK. Docsity.com Enterprise Act 2002, Section 58 Broadcast and newspaper/broadcast merger considerations comprise the need:  in relation to every different audience in the UK (or part) for a sufficient plurality of persons with control of the media enterprises serving that audience,  for a wide range of broadcasting which … is both of high quality and calculated to appeal to a wide variety of tastes and interests,  genuine commitment to specific standards in the 2003 Act (standards). Docsity.com Procedure 1 1.Secretary of State has competence to trigger investigation where merger is of a sufficient scale and Secretary believes one of more of the public interest considerations applicable – discretionary, 2.Office of Fair Trading reports on competition issues, OFCOM on media plurality, 3.Sec. of State decides whether or not to refer to Competition Commission – discretionary, 4.Competition Commission report binding on competition issues but Sec. of State free to decide whether merger contrary to public interest and the terms, if any, on which it might proceed. Docsity.com BSkyB/ITV case  Took more than 3 years to resolve, with appeal to the Court of Appeal. BSkyB required to reduce shareholding to below 7.5% on competition grounds.  Case revealed uncertainty over how to interpret ‘a sufficient plurality of persons with control of media enterprises’ in s. 58 of the Enterprise Act 2002.  The Competition Appeal Tribunal adopted a precautionary approach, and emphasised external plurality, that is the number of distinct owners, whereas the Competition Commission considered that Sky’s shareholding would not enable Sky to exert sufficient power internally to influence ITV’s news agenda, a view supported by the Court of Appeal. Docsity.com BSkyB/News Corp Proposed Acquisition • European Commission cleared on competition grounds. • Sec. of State sought OFCOM’s view as to whether there would be ‘a sufficient plurality of persons with control of media enterprises’ under s 58 (2C) EA 2002 after the merger. • Both external and internal plurality concerns relevant. Docsity.com BSkyB/NewsCorp Acquisition: OFCOM Report OFCOM when considering internal plurality held: Impartiality requirements on TV were not enough to keep News Corp’s print/tv content distinct. New online media were primarily aggregators or replicators not additional news sources and did not, therefore, guarantee a sufficient diversity of voices. Docsity.com Outstanding Questions and Concerns 1. Length of proceedings, cost, uncertainty. 2. Focus on news provision. 3. Can divestiture or behavioural modifications adequately address media plurality concerns? 4. Endogenous growth. 5. Regulatory independence and expertise. Docsity.com 1. Length of Proceedings, Costs and Uncertainty Present ‘ex post’ case by case approach takes time, is costly, and uncertain in terms of the ultimate ruling. How can we tell, for example, whether a 22% share of reference (potential influence) identified by OFCOM in the News Corp/BSkyB case as giving rise to concern is too much? This uncertainty is arguably bad for business and citizens. Are there alternatives? US Federal Communications Commission attempts to render issue ‘formulaic’ through a diversity index: Prometheus Radio Project v FCC 373F.3d 372 (2004). Docsity.com An Alternative Objective Test? • Hirschmann-Herfindahl (HHI) Index: sum of the squares of the market shares • 1,800 ‘highly concentrated’ market • Application to Ofcom’s share of reference: Wholesale before: 1,941 after: 2,181 Retail before: 1,812 after: 1,941 • Difference 240 and 129 respectively Docsity.com 3. Endogenous Growth Review only triggered by a merger situation but a company may become the dominant news provider without market consolidation. Is there a need for more continuous monitoring, possibly by OFCOM, and scope for further remedial action? Coalition government propose a new Communications Act during its term of office, which could address this problem. Docsity.com 4. Regulatory Independence and Expertise Who should decide media plurality issues? • Regulatory independence and potential for politicisation. Policy decisions may be appropriately devolved to the executive but questionable role of Secretary of State in this context given potential value of media coverage for politicians and political parties. • Regulatory expertise. Is the Competition Commission a suitable body to evaluate media pluralism cf OFCOM, the specialist media regulator – or scope for a new media tribunal? Docsity.com