Advisory Group on Media Mergers Report 2008
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ADVISORY GROUP ON MEDIA MERGERS Report to the Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan T.D. June 2008 1 1. Chapter 1- Introduction INTRODUCTION TO REPORT 1.1 In March of 2008, the then Minister for Enterprise, Trade and Employment, Micheál Martin T.D., announced the establishment of an advisory group (the Group) to review the current legislative framework regarding the public interest aspects of media mergers in Ireland. This review was undertaken in the context of a wider review taking place on the operation and implementation of the Competition Act 2002. 1.2 The Group was asked to examine the provisions of the Competition Act 2002 in relation to media mergers and in particular the “relevant criteria” specified in the Act, by reference to which the Minister currently considers media mergers. 1.3 The Terms of Reference of the Group were:- To review and to consider the current levels of plurality and diversity in the media sector in Ireland. To examine and review the “relevant criteria” as currently defined in the Act. To examine and consider how the application of the “relevant criteria” should be given effect and by whom. To examine the role of the Minister in assessing the “relevant criteria” from a public interest perspective and the best mechanism to do so. To examine international best practice, including the applicability of models from other countries. To make recommendations, as appropriate, on the above. 2 1.4 The membership of the Group comprised:- Paul Sreenan S.C. (Chairman) Dr. Olive Braiden. Peter Cassells Marc Coleman John Herlihy Prof. Colum Kenny Michael O’Keeffe 1.5 Freda Nolan and Cathal O’Gorman from the Competition and Consumer Policy Section of the Department of Enterprise, Trade and Employment, provided the secretariat. 1.6 The Group conducted a wide-ranging consultation. It published an advertisement (Appendix F) seeking submissions in a large number of newspapers (Appendix G). 1.7 In addition, a number of persons and bodies were invited to make submissions. A list of these appears at Appendix H. 1.8 As a result of the consultative process, the Group received fourteen submissions. A list of the persons and bodies making submissions is to be found in Appendix I. While taking no position on claims for confidentiality, the Group has avoided quoting or referring to parts of a submission designated as confidential. 1.9 The Group held meetings with the Competition Authority, the Joint Oireachtas Committee on Enterprise, Trade and Employment and the Joint Oireachtas Committee on Communications, Energy and Natural Resources, with a view to enhancing the understanding of the members of the Group of the issues concerned. Following the latter two meetings, a number of separate comments were received from public representatives. 3 1.10 The Group commissioned PricewaterhouseCoopers (PWC) to prepare a statistical study of data relevant to plurality and diversity in the media sector in Ireland. A copy of this is to be found at Appendix C. 1.11 The Group also commissioned Emily Gibson B.L. to prepare a comparative study on the practice relating to media mergers in selected jurisdictions, thereby enabling the Group to consider and take into account international best practice in accordance with its Terms of Reference. A copy of Emily Gibson B.L.s comparative law survey is to be found at Appendix D. 1.12 In formulating its recommendations, the Group has aimed to balance the needs of business for transparency, certainty and efficiency with the public interest in the protection of media plurality in the State. 1.13 When appointed in April 2008, the Minister requested that the Group report by the end of June 2008. The Group is happy to be able to meet this target. 4 2. Chapter 2 - Executive Summary Executive Summary 2.1 Media Mergers raise strong public interest concerns, relating to plurality (both of ownership and content) in the media. 2.2 The Group has examined how the existing mechanism for the approval of media mergers under Section 23 of the Competition Act 2002 might be amended to reflect the relationship between media and the public interest in media plurality in the State. 2.3 The Minister’s role in the consideration of relevant criteria for assessing media mergers is also examined. The Group has identified difficulties with the present system including concerns about the role of the Competition Authority, lack of clarity in the relevant criteria as currently defined and the absence of clear statutory mechanisms to enable the Minister to protect the public interest in media plurality. The Group has suggested a reduced role for the Competition Authority in the assessment of plurality aspects of media mergers, redefined the relevant criteria and has suggested a statutory test to guide the Minister in the discharge of his/her function in considering the relevant criteria. The Group has also recommended concrete indicators of diversity of content and spread of ownership. 2.4 The Group recognises the contribution of the internet to plurality in the Irish media sector noting that the capabilities of new media are forecast to increase significantly in the future. The Group has called for greater clarity and transparency for parties contemplating a merger. 2.5 The Group has considered international best practice and a research paper was commissioned by the Group to provide a comparative analysis of the legal framework for media mergers in a number of jurisdictions. The Group has 5 considered current levels of plurality in the media in the State and commissioned PWC to collate data from publicly available sources on this topic. The Group has taken all of this material into account in the consideration of its recommendations. 2.6 The Group has made eleven recommendations, which in summary are as follows:- 1. There should be a statutory definition of media plurality (referring both to ownership and content). 2. The Competition Act should be amended to incorporate a statutory test to be applied by the Minister in the discharge of his or her function in relation to media mergers. 3. The definition of the “relevant criteria” in Section 23 (10) of the Competition Act should be replaced. 4. There should be an on-going collection and periodic publication of information and employment of concrete indicators in relation to media plurality in the State. 5. The Competition Authority should neither be required to form nor to furnish an opinion on the application of the relevant criteria. 6. There should be a separate system of notification of media mergers to the Minister for clearance. The Group has proposed an outline of such a system. 7. There should be an obligation imposed by Statute on parties to a media merger to provide full information to the Minister on all circumstances that might impair media plurality in the State, and to notify any changes in information provided to the Minister, with appropriate penalties for non-compliance. 6 8. The Minister should publish Guidelines to assist undertakings involved in media mergers in knowing how the Minister would in general apply the relevant criteria. 9. In the event of the Minister deciding to proceed to a detailed investigation of a proposed merger (other than a broadcaster to broadcaster merger), a three to five person Consultative Panel should be established on a statutory basis to provide advice to the Minister on the media merger. 10. The definition of “media business” should be amended to include publication of newspapers and periodicals over the Internet and broadcast of certain audio- visual material over the Internet. 11. The important role of the media in a democracy should be recognised by Statute, ideally in the Long Title of the Act containing the relevant provisions on media mergers. 7 3. Chapter 3 - Media Diversity and Plurality in the State Discussion 3.1 Current objective indicators of an aspect of media plurality, namely the spread of ownership and control of media businesses in the State, consist largely of publicly available data on ownership, agreed industry data on circulation, audience/readership and distribution. Some of that data appears in a report commissioned from PWC in Appendix C to this report. The data reveal a media market within the Republic of Ireland that is larger and more complex than could have been imagined even twenty-five years ago. There are some indications of a trend towards the concentration of ownership and this may accelerate, especially in the event of a sustained economic downturn or recession. Global trends also reveal a tendency by large media corporations to acquire other media organisations on a continuing basis. In the case of holders of broadcasting licences, licence conditions imposed by the Broadcasting Commission of Ireland (the B.C.I.) sometimes operate to restrict the spread of ownership and control. In the case of the print media, merger control often offers the sole opportunity of reviewing the consequences of a merger from the perspective of its effect on the spread of ownership and control of media businesses generally. 3.2 Current objective indicators of diversity of media content are generally implicit, being discerned principally through an examination of data relating to audience or readership that disclose to some extent which particular geographically or socially specific group is accessing which media. While the Minister and other citizens may have a sense of the editorial leanings of particular media outlets, their ‘sense’ is ultimately subjective and liable to possible bias. Thus, editors will frequently disagree with critics who complain that a certain phenomenon, be it a specific sport or cultural activity or political perspective (for example), is not adequately or fairly represented in the media.