Regulation of Press Ownership in the UK

2974 words (12 pages) Essay in Communications Law

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Critically analyse the regulation concentration of press ownership in the UK

Press ownership in United Kingdom is largely governed by Communications Act 2003, Enterprise Act 2002, The Broadcast Act 1996 and Competition Act 1998.

Following the Leveson Inquiry in 2011, United Kingdom has been examining the state of its media.[1] Media concentration raises specific concerns regarding ownership in terms of political, cultural as well economic areas.[2] Economically it affects the productive growth economically in form of competition  and the market reality points out increasing number of media companies owned by the same parent company. [3]  This essay will first show that we need stricter press regulation laws against powerful corporations such as News UK and Trinity Mirror to strengthen plurality of sources and diversity of content. The essay will then discuss how print readership is on the decline because of convergence. Then it will explain then showed that since United Kingdom does not have legal boundaries on foreigners owning print media, we are now experiencing deterioration of media pluralism

Plurality of sources and diversity of content

The primary aim of establishing ownership rules for newspapers are to to safeguard plurality of owners and to give consumers various sources of news and information.[4] A very concerning fact is that three companies such as (News UK, DMGT, Trinity Mirror) own 70% of the national newspaper circulation.[5] Five companies control 70% of the regional daily newspaper circulation.[6] This shows that ownership concentration has reached endemic levels.

There have been evidences from former editors of newspapers like Daily Mirror and Sunday Telegraph that the newspaper owners openly meddled with the contents of the newspaper.[7] In 2007 Council of Europe highlighted that ‘media pluralism and diversity of media content are essential for the functioning of a democratic society and are the corollaries of the fundamental right to freedom of expression and information’.[8] While media pluralism serves the public interest, it is not in itself the public interest.[9] The main UK media plurality rules are set out in section 58 of the Enterprise Act 2002 which permits certain media mergers within the print industry on the basis of plurality grounds.[10] One of the main issues with this provision is that a plurality review can only be started in the context of a media merger.[11] Structural and behavioural interventions in relation to editorial freedom can often assert ineffectiveness given the enduring power relations as well as subtle means of pressure that has no legal ways as evidenced by Sir Harold Evans (former editor of the Times and the Sunday Times).[12] Even the European Parliament has time and again supported legislative mediation to safeguard media plurality and has continued to push for action.[13] Leveson Inquiry has revealed that avoiding significant merger has led powerful media personalities to seek unethical media activities to influence their power against political leaders with an agenda.[14] This shows that we need stricter press regulation laws against powerful corporations such as News UK and Trinity Mirror to strengthen plurality of sources and diversity of content. This essay will then discuss stricter regulation for cross media ownership may eventually help in protecting media pluralism and diversity of content. This essay will then discuss the ineffectiveness of EU law to properly address the problem of press ownership regulation.

Effects of Cross Media Ownership

Protecting media plurality may be affectively done if there is strong regulation of cross media ownership. It is also a way for local media companies to consolidate its radio, television and printing press and produce similar content across all media.[15] In the Measuring Media Plurality report, Ofcom has suggested that a diversity in viewpoints can effectively prevent any one media from influencing public opinion or serving a particular political agenda.[16] Schedule 14 of The Communications Act 2003 states the cross media ownership rules and it includes consideration of company groups and also familial relationships. As specified in Part 1 of Schedule14, no person may acquire a Channel 3 licence if he or she runs one or more national newspapers with an aggregate market share of 20% or more.[17] The national cross-media ownership rule prohibits a newspaper owner with a market share of 20% or more of newspaper circulation from holding a Channel 3 licence or a stake in a Channel 3 licensee that is greater than 20%. This helps protect plurality of sources and diversity of content in UK media ownership and prevents the biggest newspaper operators from acquiring one of the biggest commercial broadcasters in the UK.[18] This provision helps prevent undue influence that media conglomerates can use for self-serving agendas.[19] 

An Ofcom study conducted in 2009 explains local media pluralism is not amongst the priorities for the public. Respondents were more concerned with single ownership amongst the local media and were not concerned about cross media ownership.

An Ofcom study conducted in 2009 explains local media pluralism is not amongst the priorities for the public. Respondents were more concerned with single ownership amongst the local media and were not concerned about cross media ownership.[20] Some academics believe that urgent reform is required to redress the endemic concentration in the press markets.[21] However Ofcom disagrees and asserts that cross media merger laws should be retained.[22] Recently Rupert Murdoch has been on the spotlight as he is being investigated by the UK competition regulator for the £11.7bn bid which has consistently been called a deal against the public interest because it would give the Murdoch family “too much control over news providers in the UK, and too much influence over public opinion and the political agenda”. By buying 61% of Sky Murdoch would own what it does not already making him the sole owner of Sky News. A three week consultation examining has been launched by The Competition and Markets Authority referring to Sky News that could allow the deal to go through. The three options include to stop the deal, a potential spin-off or sale of Sky News or to keep Sky News as part of Sky but to question its independence to address concerns about Murdoch’s influence, such as an independent board and funding guarantee.[23] Hence, stricter regulation for cross media ownership may eventually help in protecting media pluralism and diversity of content.

European Union Law

After a long gap of inaction, European Union started to engage with the question of media pluralism after both internal and external pressures. Article 11.4 was introduced to increase support amongst the public for legislative intervention.[24] European Laws function on the open market for the most part and hence the aim is multilateralism and as is the way of globalisation to be at an equilibrium state.[25]  Media pluralism is being addressed by the European Commission in its Green Paper focusing on the controlling of public access to information  as well as distribution platforms.[26] However, European laws too affect Competition laws which can be a duplication of the national laws as there is ineffective coordination between the two legal systems which are resulting in repetition. At EU level, Mergers may be subject to competition law and more specifically the Merger Regulation.[27] There is of course the question of Brexit and the friction which will cause difficulties in the practice of the existing laws but that is not yet known.

Convergence

Convergence is not just about development in technology. It corresponds to creating innovative idea to create services and about different ways of doing business and of interacting with society.[28] Where local newspapers do exist, their audience reach has traditionally been high although it has dropped in recent years.[29] It has been observed that the decline in quality local journalism is strongly associated with convergence and ownership concentration. Even though there is an increase in citizen media, however major news organisations still overpower the growing citizen media. Ever since convergence, the multinational corporations and organisations have responded to the current climate by investing heavily in online platforms with a strong market strategy and extensively established news production infrastructures.[30] Nowadays, UK citizens are predominantly using online news sites that are run by existing news providers further asserting the already significant dominant in the major players.[31] Ever since the growing age of smartphones, print readership has been steady and big organisations are taking part in it equally.

Foreign Ownership

There are no formal restrictions on the foreign ownership in UK print media industry.[32] Holding reservations of overseas firms is not profitable since international competitiveness is the aim for deregulating.[33]  However, the argument of News International dominating the print industry still remains prevalent in the ownership debate.[34] Ever since the Communications Act ended the ban on foreign ownership of TV licences, this paved the way for News Corporation to attempt to buy the 60% of BskyB it did not own.[35] In a surprising news, Brian Roberts who owns NBC lanched a £22 billion takeover bid for Sky and this just confirms that no matter who wins the bid, Sky will be moving into a complete foreign ownership after being UK’s biggest media company for three decades.[36] News UK, an American company owned by Rupert Murdoch which is part of News Corporation commands a significant share in print media.[37] Since United Kingdom does not have legal boundaries on foreigners owning print media, we are now experiencing deterioration of media pluralism.

Conclusion

In conclusion, there needs to be more defined regulation in the press ownership as it is largely being run by corporations like News UK who are trying buy the press. This shows that we need stricter press regulation laws against powerful corporations such as News UK and Trinity Mirror to strengthen plurality of sources and diversity of content. This essay then explained why stricter regulation is needed for cross media ownership which may eventually help in protecting media pluralism and diversity of content. This essay then discussed the ineffectiveness of EU law to properly address the problem of press ownership regulation. The essay then discussed how print readership is on the decline because of convergence. The essay then showed that since United Kingdom does not have legal boundaries on foreigners owning print media, we are now experiencing deterioration of media pluralism. Moreover, Brexit has left print ownership on a very unpredictable path. Hence, we need concrete regulations on many issues regarding press ownership.

Bibliography

Collins, R. (2003). Enter the Grecian Horse? Regulation of Foreign

Ownership of the Media in the UK. Policy Studies. 24:1, 17-31

Cox, B. (2000), Media Ownership and the Communications Reform White Paper. The Political Quarterly, 71(4): 469 – 471

Doyle, G. (2000). The Economics of Monomedia and Cross-Media Expansion: A Study of the Case Favouring Deregulation of TV and Newspaper Ownership in the U.K. The Journal of Cultural Economics. 24, 1- 26.

European Commission, Green Paper On the Convergence Of the Telecommunications, 3 December 1997

Goldsmiths Leverhulme Media Research Centre. (2010). Meeting the news needs of local communities. Commissioned by Media Trust.

Grahamn, C. (2004). The Enterprise Act 2002 and Competition Law. Modern Law Review, 67(2), p.273-288

Krumsvik, A. H. (2015) Newspaper Ownership And The Prioritization Of

Digital Competences, Digital Journalism, 3:5, 777-790

Lord Justice Leveson’s Inquiry into the Culture, Ethics and Practices of the Press (2012)

Letter from National Union of Journalists to Secretary of State for Culture Media and Sport. (2017)

Media Reform Coalition, the elephant in the room: a survey of media ownership and plurality in the UK. Published on April 24, 2014.

Media Trust and Goldsmiths Leverhulme Media Research Centre, ‘Meeting the news needs of local communities’, 2010

Murdoch’s Sky bid: what next for the media heavyweight? The Guardian Published on 23rd January 2018

https://www.theguardian.com/media/2018/jan/23/rupert-murdoch-sky-bid-what-next-for-the-media-mogul

Ofcom, Report to the Secretary of State on the operation of the media ownership rules listed

under Section 391 of the Communications Act 2003. Published on 26 November 2015

Smith, R.C. (2013). Reviewing Media Ownership Rules in the UK and Europe: Competing or Complementary Investigations? Journal of Media Law, 5(2), 332-344

Smith, R. C. & Tambini, D. (2012) Measuring Media Plurality in the United Kingdom: Policy Choices and Regulatory Challenges, Journal of Media Law, 4(1), 35-63 

Winseck, D. (2008). The State of Media Ownership and Media Markets: Competition or Concentration and Why Should We Care?. Sociology Compass, 2(1), p.34-47.

Why US media giants are eyeing Sky – and what any deal might mean? The Guardian. Published on 3rd March 2018.

https://www.theguardian.com/business/2018/mar/03/why-us-media-giants-are-eyeing-sky-and-what-any-deal-might-mean

Legislations:

Communications Act 2003

Enterprise Act 2002

Competition Act 1998

Treaty on European Union


[1] Media Reform Coalition, the elephant in the room: a survey of media ownership and plurality in the UK. Published on April 24, 2014.

[2] Gillian Doyle. (2006). Media ownership. London: SAGE and Barry Cox. (2000). Media ownership and the Communications Reform White Paper. pp. 469-471

[3] Petros Iosifidis, n. d. and Barry Cox. (2000)

[4] Petros Iosifidis.  Media Ownership and Concentration in the United Kingdom. In: E. Noam (Ed.), International Media Concentration. OUP. This is a draft of a chapter that has been accepted for publication by Oxford University Press in the forthcoming book International Media Concentration edited by Noam, E.

[5] Media Reform Coalition [2014]

[6] ibid.

[7] ibid

[8] Recommendation CM/Rec(2007)2 on Media Pluralism and Diversity of Media Content, 31 January 2007

[9] Media reform. The Media and The Public Interest – preliminary briefing paper. Published November 4 2011.

[10] The Enterprise Act 2002 s.58

[11] Smith, R.C. (2013). Reviewing Media Ownership Rules in the UK and Europe: Competing or Complementary Investigations? Journal of Media Law, 5(2), 332-344

[12] HLSCC, Evidence Session 11 (n 31) 54–55 cited in Smith (2013)

[13] European Parliament Civil Liberties Committee, Motion for an EP Resolution on the EU Charter: Standard Settings for Media Freedom Across the EU (23 March 2013), P7_TA(2013)0203, particularly at para 15 cited in Smith (2013)

[14] Leveson Inquiry (2012)

[15] Media Reform Coalition (April 24, 2014) p. 16

[16] Ofcom (2014)

[17] Schedule 14 of Communications Act 2003

[18] Ofcom, Report to the Secretary of State on the operation of the media ownership rules listed under Section 391 of the Communications Act 2003. Published on 26 November 2014

[19] Ofcom (2014)

[20] Ofcom, ‘Review of Local Media: Qualitative Findings’ (2009), p. 6 cited in Media Reform Coalition (April 24, 2014)

[21] Enders Analysis, ‘Media Ownership Rules’ (2012) cited in Media Reform Coalition (April 24, 2014) p.24

[22] Ofcom, Report to the Secretary of State on the operation of the media ownership rules listed under Section 391 of the Communications Act 2003. Published on 26 November 2014

[23] Murdoch’s Sky bid: what next for the media heavyweight? The Guardian Published on 23rd January 2018

[24] Treaty of European Union

[25] Doyle, G. (2006)

[26] Green Paper on Preparing for a Fully Con- verged Audiovisual World: Growth, Creation and Values cited in Smith (2013)

[27] ibid

[28] European Commission, Green Paper On the Convergence Of the Telecommunications, 3 December 1997

[29] Media Trust and Goldsmiths Leverhulme Media Research Centre, ‘Meeting the news needs of local communities’, 2010

[30] ibid.

[31] Ofcom (2007)

[32] Richard Collins (2003) Enter the Grecian Horse? Regulation of Foreign

Ownership of the Media in the UK, 24:1, 17-31

[33] Ibid.

[34] https://www.theguardian.com/media/2017/mar/05/uk-news-plurality-and-fox-sky-merger

[35] Ibid.

[36] Why US media giants are eyeing Sky – and what any deal might mean? The Guardian. Published on 3rd March 2018.

[37] Media Reform Coalition (April 24, 2014) p. 16

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