IMPRESS’S Response to This Call for Information

Response to the Press Recognition Panel Call for Information on the Annual Report on the Recognition System 2019

Introduction

1. The Press Recognition Panel (PRP) was established under the Royal Charter on Self-Regulation of the Press (‘the Charter’) to ‘carry on activities relating to the recognition of Regulators’.

2. Among other things, the PRP is responsible for ‘reporting on any success or failure of the recognition system’.

3. Accordingly, on 18 September 2019, the PRP issued a call for information ‘to gather views on the extent to which the recognition system has succeeded in its aims.’ This call for information poses the following questions:

• To what extent does the new system of genuinely independent and effective system of self-regulation recommended by Leveson exist today?

• Is the system of self-regulation that exists today more or less independent and effective system than three years ago? What evidence do you have to support your view?

• How much confidence can the public have in the systems that are currently in place to protect it from potential harm caused by the press and news publishers?

• How satisfied are you with the mechanisms and processes that are in place to challenge misinformation and mistruths in the press?

4. This paper constitutes IMPRESS’s response to this call for information.

5. In the paper, we first set out the factual background to our response. We then provide answers to the PRP’s questions.

IMPRESS Response to PRP Call for Information October 2019 Page 1 of 12 6. We hope this response encourages productive dialogue with the PRP and other relevant stakeholders, including representatives of the news publishing industry, regulators, academics, civil society organisations and policymakers.

Part One: Factual background

Government policy towards the news publishing industry

7. The Royal Charter on Self-Regulation of the Press (‘the Charter’) was designed to give effect to recommendations made by Lord Justice Leveson following his Inquiry into the Culture, Practices and Ethics of the Press (‘the Leveson Inquiry’).

8. The recitals to the Charter show that its aims are aligned with the Terms of Reference of the Leveson Inquiry, which was tasked with recommending:

‘a new more effective policy and regulatory regime which supports the integrity and freedom of the press, the plurality of the media, and its independence, including from Government, while encouraging the highest ethical and professional standards’.

9. In this paper we assess ‘the extent to which the recognition system has succeeded in its aims’ by reference to these aims of:

• Supporting the integrity and freedom of the press;

• Supporting the plurality of the media;

• Supporting the independence of the media, including from Government; and

• Encouraging the highest ethical and professional standards.

10. The recognition system was intended to form part of a wider framework for press regulation (‘the post-Leveson framework’) that included the legal incentives set out in sections 34-42 of the Crime and Courts Act 2013. These incentives are designed to protect publishers from awards of exemplary damages and adverse costs orders in libel and privacy actions, so long as they subscribe to a recognised regulator, and to expose publishers to the risk of exemplary damages and adverse costs orders if they do not subscribe to a recognised regulator.

11. The exemplary damages provisions were commenced in the normal way upon enactment of the legislation, but the Government chose not to commence section 40 of the Act (‘s40’), which sets out the costs provisions.

IMPRESS Response to PRP Call for Information October 2019 Page 2 of 12 12. On 1 March 2018, the Government announced its intention to repeal s40 and cancelled Part Two of the Leveson Inquiry. At the same time, the then Secretary of State for Digital, Culture, Media and Sport, Rt. Hon Matt Hancock MP, announced a range of related policy initiatives:

‘Action is needed. Not based on what might have been needed years ago – but action now to address today’s problems. Our new Digital Charter sets out the overarching programme of work to agree norms and rules for the online world and put them into practice. Under the Digital Charter, our Internet Safety Strategy is looking at online behaviour and we will firmly tackle the problems of online abuse. And our review into the sustainability of high-quality journalism will address concerns about the impact of the Internet on our news and media.’1

13. The Secretary of State suggested that the aims of these initiatives were comparable to the aims of the recognition system:

‘At national and local levels, a press that can hold the powerful to account remains an essential component of our democracy. Britain needs high-quality journalism to thrive in the new digital world. We seek a press – a media – that is robust, and independently regulated. That reports without fear or favour. The steps I have set out today will help give Britain a vibrant, independent and free press that holds the powerful to account and rises to the challenges of our times.’

14. A group of claimants brought an unsuccessful challenge to the lawfulness of the government’s decision to cancel Part Two of the Leveson Inquiry. The Government released a statement on judgement on 28 November 2018, stating that:

‘The media landscape has changed significantly in the six years since the Leveson Inquiry was first published and we believe that the steps we have taken mean that continuing with Part 2 is no longer appropriate, proportionate, or in the public interest.’

15. The policy initiatives outlined in Matt Hancock’s statement subsequently took shape as the Cairncross Review: A sustainable future for journalism (‘the Cairncross Review’), published in February 2019, and the Online Harms White Paper (‘the White Paper’), published in April 2019.

16. The Cairncross Review found that there has been a market failure in the provision of public interest news and recommended public intervention to address

1 https://www.gov.uk/government/speeches/leveson-consultation-response

IMPRESS Response to PRP Call for Information October 2019 Page 3 of 12 this. In particular, the Review recommended subsidies to support local journalism and digital innovation in news publishing.

17. The White Paper set out proposals for a new regulatory framework for social media platforms that would address harms such as ‘misinformation’ and ‘abuse of public figures’. In response to concerns that this framework would also affect the online services offered by news publishers, the then Secretary of State for Digital, Culture, Media and Sport, Rt. Hon Jeremy Wright MP, wrote to the Society of Editors, copying IMPRESS, on 10 April, stating:

‘where these services are already well regulated, as IPSO and IMPRESS do regarding their members’ moderated comment sections, we will not duplicate those efforts.’

18. The Government did not explain:

• How it assessed whether IMPRESS’s and IPSO’s members’ moderated comment sections were well regulated, or regulated at all;

• What its plans were for comments sections on the websites of news publishers more generally; or

• How it was justified in not including the content of news publishers regulated by IPSO or IMPRESS in the regulation of third-party platforms where that content appeared.

19. The Government has not yet formally responded to either the Cairncross Review or its consultation on the White Paper.

20. Meanwhile, the Government has continued to provide a range of direct and indirect subsidies to parts of the news publishing industry. Printed news publications are zero-rated for Value Added Tax (VAT), whilst local authorities are obliged to advertise with selected local newspapers. Taken together, the annual value of these subsidies has been calculated at £250m.2

21. In the course of reviewing the BBC Charter, the Government encouraged the BBC to enter into partnership with the News Media Association (NMA) to invest £8m of licence fee funds per year into a Local Democracy Reporting Service (LDRS). The lion’s share of LDRS contracts (61 out of 68) were subsequently awarded to newspapers owned by Reach, Newsquest and JPI, three of the

2 https://www.pressgazette.co.uk/why-local-websites-deserve-a-share-of-governments-250m-plus- annual-subsidy-for-local-news/

IMPRESS Response to PRP Call for Information October 2019 Page 4 of 12 largest publishing companies in the UK, all of which are members of IPSO (see below), and which have a combined turnover of more than £1bn.3

22. In 2018, the Government updated data protection law to reflect the requirements of the European Union General Data Protection Regulations (GDPR). The Data Protection Act 2018 includes a qualified exemption for journalists who follow any of a number of listed journalism codes. The listed codes include the Editors’ Code of Practice, which is used by IPSO. Despite multiple requests by IMPRESS and a cross-party group of parliamentarians, the Act does not list the IMPRESS Standards Code, either by name or as the code of a recognised regulator.

The state of the news publishing industry

23. At a conservative estimate, we believe that there are at least 500 news publishing companies in the UK. These companies are responsible for a wide range of publications, including general interest newspapers and magazines as well as specialist titles. They include investigative journalism non-profits, hyperlocals, political media and publications aimed at particular communities of interest.

24. Whilst digital technology has enabled new players to enter the news market, it has also created problems for audiences, who increasingly encounter news via social media platforms and search engines, and who are unsure, as a result, whether to trust a particular news site.

25. Ofcom’s latest research shows that audiences are increasingly looking for trust indicators when they encounter news online:

‘Although close to one in five social media users say they would not tend to check the truthfulness of news articles, this is less likely than in 2017 (23%). Seven in ten said they would make at least one check; the most popular was to assess whether the source of the article was either a known or a trustworthy organisation (46%), followed by using a ‘peer-based’ judgement, either by looking at what others had said about the story, or by assessing whether the person who shared the story was trustworthy (37%).’4

26. The digital revolution has also created problems for news publishers, who struggle to monetise journalism in the face of competition from a seemingly endless selection of other sources of free content. More than 40 local news titles closed in 2018, with the loss of 275 jobs, according to research by Press

3 Trinity Mirror plc (the previous name of Reach) reported income of £623m in 2017; Newsquest reported income of £197m in 2018; and Johnston Press (precursor of JPI Media) reported revenue of £202m in 2017. 4 https://www.ofcom.org.uk/__data/assets/pdf_file/0021/149124/adults-media-use-and-attitudes- report.pdf

IMPRESS Response to PRP Call for Information October 2019 Page 5 of 12 Gazette.5 The vast majority of these were owned by major national news groups. This continues a downward trend that has seen the net loss of 245 local news titles in the UK since 2005.

The state of press regulation

27. IMPRESS: The Independent Monitor for the Press (‘IMPRESS’) was developed to meet the criteria for independent and effective press regulation set out in the Charter. On 25 October 2016, the PRP confirmed that IMPRESS meets these criteria. As a result, IMPRESS operates as an approved or ‘recognised’ regulator.

28. The PRP’s decision to recognise IMPRESS was subject to Judicial Review proceedings brought by the News Media Association (NMA). This claim was rejected, on all grounds, by the High Court. The NMA subsequently withdrew an appeal against this judgement.

29. In March 2019, the PRP completed its first cyclical review of IMPRESS’s compliance with the recognition criteria and confirmed its ongoing status as a recognised regulator. This decision took into account IMPRESS’s track record of regulatory activities over the previous three years.

30. 75 companies (approximately 15% of all news publishing companies by our conservative estimate of the size of the industry) have joined IMPRESS’s regulatory scheme. These publishers are collectively responsible for 132 publications, which reach an estimated 11 million readers each month.

31. The Independent Press Standards Organisation (IPSO) was established by a group of newspaper publishers who rejected the findings of the Leveson Inquiry. 81 companies (approximately 16% of all news publishing companies) have joined IPSO’s regulatory scheme. These publishers are collectively responsible for 2,400 publications. They fund IPSO, and oversee its constitution, regulatory scheme and procedures, through the publisher-only Regulatory Funding Company (RFC), a body that shares premises and staff with the NMA.

32. IPSO has not sought recognition by the PRP, which has stated that:

‘From even the limited amount of information available publicly, it is clear that IPSO’s member publishers have a significant amount of influence over IPSO, meaning the organisation is not independent of the press.’6

5 https://www.pressgazette.co.uk/more-than-40-local-news-titles-closed-in-2018-with-loss-of-some- editorial-275-jobs-new-figures-show/ 6 https://pressrecognitionpanel.org.uk/wp-content/uploads/2019/02/Press-Recognition-Panel-PRP- Report-on-the-Recognition-System-February-2019.pdf

IMPRESS Response to PRP Call for Information October 2019 Page 6 of 12 Indeed, a recent analysis by the Media Standards Trust (MST) found that IPSO meets only 13 of the 38 criteria for independent and effective regulation set out in the Leveson Report.7 Dr Gordon Ramsay, author of the MST study, said:

‘While IPSO has secured some concessions from the newspaper industry over the past five years it is clear that the continued influence of the Regulatory Funding Company fundamentally undermines the independence of the system, while restrictions on recording code breaches and barriers to launching standards investigations compromise the effectiveness of IPSO to regulate the industry that set it up.’

33. At least 69% of news publishing companies in the UK have not joined either IMPRESS or IPSO. These companies are responsible for household name publications including The Guardian, the Financial Times, The Independent, the Evening Standard, Buzzfeed and the Huffington Post, as well as many other less well-known publications.

34. Although IMPRESS does not regulate the larger news publishing companies, which remain outside the recognition system, the PRP has imposed the full cost of the recognition system on IMPRESS. This amounts to an annual fee of £220,000, which represents 23% of IMPRESS’s annual budget.

35. The Charter was drafted on the assumption that there would be at least one regulator funded by the largest news publishers, for which an annual recognition fee of £220,000 or an application fee of £300,000 would not be unreasonable.

36. However, that is not how things have panned out. A £300,000 application fee, combined with an annual recognition fee of £220,000, would be unaffordable for any new sectoral regulator and imposes a disproportionate and unreasonable cost burden on a small regulator such as IMPRESS.

Part Two: The state of the recognition system

To what extent does the new system of genuinely independent and effective system of self-regulation recommended by Leveson exist today?

37. Lord Justice Leveson was unequivocal in his finding that the press had failed to regulate itself and that the Press Complaints Commission (PCC) was neither a regulator nor capable of acting as a regulator.

7 http://mediastandardstrust.org/mst-news/the-independent-press-standards-organisation-ipso-five- years-on/

IMPRESS Response to PRP Call for Information October 2019 Page 7 of 12 38. He found that the proposed system of self-regulation proposed by Lords Black and Hunt on behalf of the press (and on which IPSO is based), whilst an improvement on the PCC, fell significantly short of what was required in terms of independence from the press, protection of the public and the guaranteeing of high professional standards.

39. Leveson made it clear that a new system of regulation needed to cover all significant news publishers for it to be considered sufficiently effective. This is why he proposed a package of incentives to dissuade publishers from remaining outside the system and to reward publishers for joining the system.

40. However, this package has not been fully implemented. In addition to undermining the recognition system, the failure to commence s40 has also denied ordinary citizens access to low-cost legal redress if they are harmed by the press, and has denied costs protections to news publishers who have chosen to operate to higher standards of public accountability.

41. Clearly, the present situation – where 15% of publishers are regulated by a recognised regulator; 16% are regulated by an unrecognised (and unrecognisable) regulator; and 69% are unregulated – does not satisfy the Leveson recommendations.

Is the system of self-regulation that exists today more or less independent and effective than three years ago? What evidence do you have to support your view?

42. The system of self-regulation operated by IMPRESS has become more effective to the extent that IMPRESS has developed its experience and expertise and increased its reach.

43. At the point of being recognised in October 2016, IMPRESS had received 34 applications from news publishing companies, and 16 publishers were in the process of becoming regulated. Collectively, these publishers reached 1 million monthly readers. Since recognition, that number has grown significantly. Today, having received 141 applications, IMPRESS regulates 75 publishing companies that are collectively responsible for 132 publications. Collectively, these publishers reach over 11 million readers each month.

44. IMPRESS has autonomy over its standards code and regulatory scheme. This has allowed it to address public concerns about standards of news publishing. For example, IMPRESS has addressed concerns about discrimination by including a hate speech clause in its Standards Code and a mechanism for representative groups to make complaints.

IMPRESS Response to PRP Call for Information October 2019 Page 8 of 12 45. By contrast, IPSO has refused to address similar concerns. In March 2018, the Home Affairs Select Committee investigated the treatment of minority groups in the print media, the adequacy of the Editors’ Code in protecting minority groups from discrimination, and the responsibilities of the print media. IPSO defended its position on hate speech and discrimination to the Select Committee and has not subsequently changed any aspect of its policies or procedures.8 Following a consultation on the Editors’ Code of Practice, IPSO accepted a single change to the code, which appears to give publishers slightly greater scope to intrude upon people’s privacy.

46. During the past three years IMPRESS has received six requests for arbitration from members of the public, of which three were accepted and compensation has been paid to members of the public in two cases so far.

47. By contrast, there is no evidence on the IPSO website that IPSO’s arbitration scheme have been used whatsoever.

48. IMPRESS routinely directs its members to publish corrections of equal prominence when breaches of its Standards Code have occurred. So far, 47% of complaints investigated by IMPRESS have resulted in the finding of a code breach. In all cases where a breach was found, IMPRESS required a front page or home page notice or correction to be published with a link to the full adjudication.

49. IPSO has not required the publication of a front page notice or correction or that an adjudication appear in a national newspaper, though it has introduced a policy of requiring front-page links to corrections. Corrections on IPSO’s members’ websites are only required to be ‘on the home-page’ but that can be many screens down and is not required to be of the same prominence as the original story. IPSO recently adapted its scheme to exempt its members, when they publish articles about another country or the resident of another country, from any regulation at all.9

50. When IMPRESS was launched, it was hoped that regulatory competition between IMPRESS and IPSO would drive up IPSO’s standards of regulation. Unfortunately, this does not appear to have happened.

51. IPSO continues to lack independent control over its standards and regulatory scheme. Concerns persist about IPSO’s failure to protect the public. It has failed to publish an arbitration award in five years. It has not commenced a thematic standards investigation. IPSO fails to provide adequate redress to the public through a system of prominent corrections. It fails to protect minority groups and

8 https://www.ipso.co.uk/media/1522/letter-to-rt-hon-yvette-cooper-mp.pdf 9 https://www.pressgazette.co.uk/ipso-exempts-overseas-content-published-by-uk-news-websites-from-code- guidelines/

IMPRESS Response to PRP Call for Information October 2019 Page 9 of 12 has not address public concerns about discrimination and hate speech in the press.

52. The contrast between IPSO and IMPRESS show that IMPRESS’s compliance with the Leveson recommendations, as distilled in the Charter, represents a meaningful commitment to public accountability, whereas IPSO’s failure to comply with either the Leveson recommendations or the Charter (as demonstrated by the latest MST analysis) epitomises its failure to operate as an independent or an effective regulator.

How much confidence can the public have in the systems that are currently in place to protect it from potential harm caused by the press and news publishers?

53. The public can have considerable confidence that there are systems currently in place to protect it from potential harm caused by publishers who are members of IMPRESS.

54. However, given that the majority of news publishers are not members of a recognised regulator and IPSO is not an effective or independent regulator, public confidence is understandably low.

How satisfied are you with the mechanisms and processes that are in place to challenge misinformation and mistruths in the press?

55. Both the IMPRESS Standards Code and the IPSO Editors’ Code of Practice require publishers to take steps in relation to accuracy. However, as noted above, at least 69% of news publishers have not joined either regulator and those that have joined IPSO are not subjected to independent or effective regulation, and any remedy obtained is undermined by its lack of prominence.

56. At the same time, the post-Leveson framework does not address emerging challenges in relation to social media. Social media platforms have been shown to enable and incentivise misinformation and falsehoods, whether these originate from relevant publishers or other information providers.

57. We do not agree with the PRP that social media platforms are amenable to regulation by a recognised regulator. Most platforms do not meet the definition of ‘relevant publisher’ set out in the Crime and Courts Act 2013, and therefore would not be obliged to join a recognised regulator. In any case, the incentives in the Crime and Courts Act may not bite on platforms (and, arguably, should not bite on platforms), insofar as platforms do not exercise editorial responsibility for the

IMPRESS Response to PRP Call for Information October 2019 Page 10 of 12 content they host. Moreover, the regulatory scheme set out in the Charter is not designed with platforms in mind.

58. The distinction between platforms and publishers is changing and it is likely that new hybrid forms of platform-publisher will emerge in the years ahead.

59. For these reasons, the post-Leveson framework, in isolation, may be insufficient to address new forms of misinformation and mistrust that are functions of the social media economy and its intersection with news publishing.

Conclusion

60. The recognition system has enjoyed limited success in its aims of:

• Supporting the integrity and freedom of the press;

• Supporting the plurality of the media;

• Supporting the independence of the media, including from Government; and

• Encouraging the highest ethical and professional standards.

61. The PRP operates entirely independently of Government and has thereby supported the integrity and freedom of news publishers regulated by IMPRESS.

62. IMPRESS, in turn, has supported the plurality of the media by enabling a wide range of news publishers to join its regulatory scheme on fair, reasonable and non-discriminatory terms. IMPRESS continues to encourage the highest ethical and professional standards among these publishers. This has contributed to the emergence of a new sector of independent public interest news publications.

63. However, the recognition system has failed to achieve its aims in relation to the news publishing industry as a whole.

64. The system has been seriously undermined by the Government’s failure to commence s40 of the Crime and Courts Act 2013. In the absence of any meaningful incentives to join a recognised regulator (statutory or otherwise), a majority of significant publishers have chosen neither to join IMPRESS nor to reform IPSO into a demonstrably independent and effective regulator.

65. Moreover, the ongoing presence of s40 on the statute book has led to a situation whereby the Government has interfered in the system of independent regulation

IMPRESS Response to PRP Call for Information October 2019 Page 11 of 12 and wielded political influence over the press through its power to withhold or commence s40 at any time.

66. Instead of supporting the recognition system, the Government has instead supported publishers who have consistently opposed the recognition system. The Government has continued to oversee policies whereby those publishers who chose to sit outside of approved regulation benefit disproportionately from the zero-rating of VAT on printed publications; the placing of local authority advertising; the awarding of BBC Local Democracy Reporting Service contracts; and exemptions from data protection law.

67. Rather than supporting the plurality of the media, the Government’s backing for the BBC Local Democracy Reporting Service has contributed to the concentration of the local newspaper industry in a small number of companies.

68. The Government’s actions have effectively undermined attempts to encourage the highest ethical and professional standards in journalism and news publishing.

69. Publishers that reject independent regulation are subject only to the law, where the inequities and risks of costs in civil litigation continue to discourage most potential claimants from bringing civil claims. This situation has been made worse for both ordinary claimants and small publishers because the Government has ended the recoverability of success fees, making Conditional Fee Agreements harder to find for those facing deep-pocketed publishers or claimants.

70. Meanwhile, the PRP continues to impose the full cost of the recognition system on IMPRESS, which must either raise the funds to meet this disproportionate financial burden or withdraw from the recognition system, leading to its collapse.

71. Thus, the outcome of a series of decisions by the Government is a system of perverse incentives, whereby:

• News publishers are not encouraged to join a recognised regulator;

• News publishers that reject recognised regulation benefit disproportionately from a range of direct and indirect government subsidies and legal protections; and

• The sole recognised regulator is responsible for the full cost of acting as a recognised regulator and supporting the recognition system as a whole.

72. This situation militates against the aims of the recognition system and indeed the Government’s other policy objectives in relation to the media, as represented by the Cairncross Review and the Online Harms White Paper. It is manifestly unjust and unsustainable.

IMPRESS Response to PRP Call for Information October 2019 Page 12 of 12