Examination of Witnesses (Questions 1943
- 1959)
WEDNESDAY 6 FEBRUARY 2008
Professor Tony Prosser, Professor Tom Gibbons and
Professor Lorna Woods
Q1943 Chairman:
Good morning. You know that we are looking at concentration of
the media. We are looking at what impact that has and what remedies,
if remedies are necessary, we might propose to protect the public
interest. Public interest is one of the things we may come on
to and how one defines that. I wonder if I could ask a more general
question first and take it up from where we were on our last session.
We had Alastair Campbell and particularly Christopher Meyer with
us. Christopher Meyer was saying then that the system of separate
media regulators—Ofcom, Press Complaints Commission, BBC
Trust, Advertising Standards Authority—was a typical British
fudge. You might add the Secretary of State because the Secretary
of State obviously has a role as well. He was basically saying
that he did not think that was an architecture that can last;
it is going to need some kind of rationalisation. Would that be
your view?
Professor Prosser: It is deceptively easy to
say that we could rationalise everything and have a simpler system.
I think it becomes much more complicated when you think of the
different purposes of regulation; for example, the Competition
Commission has a very clear remit now, since the reforms of competition
law over the last few years, to consider essentially economic
competition based issues. Ofcom has a mixed remit. The press is
very different, given its history, and of course there would be
major political difficulties in bring the press into a more state-dominated
form of regulation. I suspect that what we have to accept is a
certain untidiness, simply because of the complexity.
Professor Gibbons: I agree with that and I think
one has to be aware of the culture that has developed over the
years in these different regulatory bodies and the expectations
of practice that people in different parts of the media operate
under. There is a danger with overarching rationalisation that
you hide various interests behind a major institution and you
end up with a debate about the purposes of regulation and the
refinements that are needed for different parts of the media industry
broadly hidden behind the institution. In some ways, I think we
might have seen that with Ofcom in the way that competition and
content has been hidden behind the façade of Ofcom, rather
than having, as it were, two separate regulators dealing with
the same contents with economic issues. Imagine that rationalisation
taking place across the whole industry. I think it would have
a negative effect overall.
Professor Woods: I agree. I would want to add
a little more detail. When we are talking about the media sector,
I think there is some scope for looking at perhaps non-traditional
forms of media. I was involved in a Commission study looking at
co-regulation and self-regulation in the media sector and it was
very complex. I think there are perhaps some arbitrary divisions
when you are getting organic mechanisms from industry. That may
need to be looked at but I agree especially with the point that
you cannot really just mix up economic issues and diversity and
pluralism issues in one pot. The UN Special Rapporteur on Freedom
of Expression some years ago did a joint declaration and said
that in regulating things people should not lose sight of the
differences. That was with emphasis on the internet and saying
that is very different. Having said that, I do not think you can
just label something "internet" either. I do not think
that is a helpful label. There are different types.
Q1944 Chairman:
We will come on to some of these points in a moment. What about
the Secretary of State? In some of the merger decisions that are
taking place, we are going to find not only does it prolong the
whole process but is the Secretary of State the right person to
be deciding upon something which obviously has very strong political
connotations?
Professor Prosser: There are two things that
need to be distinguished here. It seems to me that the Secretary
of State has no role in the investigation of an issue. That, in
a sense, is the way in which competition law has moved over the
last ten years, to separate out the investigation of issues, which
are based on competition issues, from public interest considerations.
It seems to me that in the end there is an important role for
the Minister because he or she will be able to take an overall
look at the public interest and take into account non-competition
based concerns, but that is distinct from being involved in the
investigation itself. I think those two have to be kept very separate.
Professor Gibbons: I am not so convinced because
I think that, as you say, because the media are so involved in
politics generally, there is a danger that an objective view will
not be taken. I guess that in most cases, with the advice from
the competition authorities and civil servants, one will end up
with an objective result, objective in the sense of taking account
of the evidence in an appropriate way, but I think that increasingly
these days we are seeing more and more the need to distance political
decision-making of this kind from more objective investigation.
I would be inclined to say no and that the Minister, at the very
least, ought to be expected to follow the recommendation of the
relevant regulator, and so in the case of the pluralism test,
follow the recommendations of, say, Ofcom.
Professor Woods: I think I agree with Professor
Gibbons' view. There is an issue of independence. I would have
some qualms about saying that the Competition Commission is the
final voice on the pluralism question though. I think there are
two issues there: one, if we are talking about competition concerns,
then obviously it has the expertise; if we are talking about diversity,
then I am not sure I would not prefer the Secretary of State over
the Competition Commission, but in principle there should be independence.
Q1945 Chairman:
We will come to some of those things. To begin with, could I put
what we are going to talk about under the umbrella or the context
of European Union law. See if I am right in trying to summarise
the position. Subsidiarity applies in the media area. There is
no requirement for a separate media law inside the United Kingdom.
As far as EU members are concerned, there should be a free market
in the media as everywhere else, but it is up to the individual
nation what restrictions they place on non-European Union ownership,
and quite a lot do place restrictions. Notably countries like
France do that. We used to do that ourselves but, as I remember
from the 2003 Communications Act, I think that was then changed
then with the effect that for example, even though there were
no reciprocal arrangements, a United States company can now take
over, for example, ITV, whereas if we went to the United States,
as we did, there is no chance at all of taking over any of those
companies. Is that roughly right as a description?
Professor Woods: The EU has certainly taken
a view that issues like media pluralism, control of media ownership,
are currently matters for the Member States. There is a rumbling
issue as to whether there should be an ownership directive. It
comes up sporadically. The European Parliament in particular is
very concerned about the concentration of media ownership in Europe
and says that something should be done. It is questionable whether
the European Union has competence to act. Having said that, media
ownership is not entirely outside European Union law as the Media
Regulation can cover media mergers, providing it meets the threshold
test or it is significant enough for European law, although there
is a safeguard clause to allow Member States to act in the interests
of media pluralism. There was a case in the Nineties where the
European Commission cleared a newspaper merger, but then the UK
authorities said: no, with the interests of media pluralism in
the UK, it is not acceptable.
Q1946 Chairman:
Does the system or the aim of a free market—in other words
if I was a chairman of a British company I could go out and buy
a television company in Germany or a newspaper in France—actually
work?
Professor Woods: There has been some consolidation
across Europe. In fact, the European Commission seems quite favourable
to pan-European giants, if I can call them that; for instance,
the idea of competing on a global marketplace. For example, Kirch
went into the pay TV market in Italy and that seemed to be quite
acceptable. The Commission seems much less keen on consolidation
within a particular Member State.
Q1947 Chairman:
I suppose the point I am getting at is: although the principle
and the aims may be clear, in practice are there barriers to actually
taking over a media company even in another European Union state?
Professor Woods: There probably still are in
terms of remnants of the old media regulation system. There was
a case just before Christmas involving Italy and it actually just
involved Italian companies, but the concern was that it could
equally affect a company from another Member State. That was to
do with a failure to award spectra actually to broadcast. The
Court in the late Eighties and Nineties has stuck down national
monopolies so as to allow other competitors in. In practice it
seems to be that the buying of licences or newspapers has been
within the same Member State. You are getting mergers at a pan-European
level but the actual franchising seems to be taking place as a
national ecology.
Q1948 Chairman:
I was reading a piece by David Montgomery who is going to give
evidence to us later. He is obviously trying to create some sort
of European group. One of the journalists of the paper which was
taken over was quoted as saying, "You cannot read our newspaper;
you do not speak German; you speak business talk. We might as
well be writing in Chinese for all you can understand". I
just wondered whether it was that sort of reaction that defeated
all the best intent of an open market.
Professor Woods: I am guessing here because
I tend to look at the cases and the decisions that the Commission
actually make. In a way, you see the ones that triumph and the
ones that do not but I would suspect that there probably are strong
national cultures.
Q1949 Lord Inglewood:
This is probably for you, Professor Woods. You said in your previous
remarks that you were unsure about whether or not there was a
competence at European level for some sort of non-competition
media regulation to be introduced if that was what was wished.
Could you elaborate a bit further, please?
Professor Woods: The basic principle is that
if the European Union is to act, it has to peg it on to a particular
provision, and quite often that is the internal market. I am not
sure that a media merger regulation would get in the way of cross-border
flows of television services or whatever. You could argue that
they have competition competence, but the problem there is that
presumably, if you look at what the European Parliament is saying,
what they actually want is a media pluralism directive. That is
where it is questionable whether the EU has competence because
it only has franking policy in issues such as culture, so it cannot
harmonise.
Q1950 Lord Inglewood:
So probably, if anything were attempted and a serious debate raised,
it would end up at the European Court of Justice?
Professor Woods: Probably.
Q1951 Lord Inglewood:
Would Article 235 have any bearing on this, do you think? Could
you argue that, do you think?
Professor Woods: I have not thought about 235.
It is arguable but to get that through you would need all the
consent of the Member States in the first place.
Lord Inglewood: I think we have gone
slightly off-piste on this one!
Q1952 Chairman:
Professor Gibbons, did you want to add anything to the questions
on Europe?
Professor Gibbons: No. I agree with Professor
Woods both on the competence point and also on the point about
culture that she made. I think that is where you have not seen
a movement of cross-owning in Europe and the idea that the pan-European
market, which was one of the original objectives behind the Television
without Frontiers Directive, has not really materialised and it
is because of language and culture, I think. You also have to
bear in mind that there are domestic regulatory regimes, often
reflected in licensing, so that when you are buying into a company,
you are buying into a regulatory regime as well. As Professor
Woods said, it often reflects different cultural requirements.
That may be the reason why we do not have interest from, say,
the United States in buying ITV because they would be buying an
ITV licence with all the understanding of public service obligations
and our culture that that requires.
Q1953 Chairman:
Culture is a lovely phrase. What does it mean? It can mean nationalism
or simply a reluctance to change.
Professor Gibbons: I was thinking more in terms
of media values, audience expectations, the sorts of things that
viewers are likely to have, the kinds of programming that they
find attractive. I was not trying to elevate it into something
else.
Professor Prosser: I am in complete agreement
very much with my colleagues. On the final point, of course, linguistic
concerns outside the UK are a particularly strong point of culture
and are absolutely central to the World Trade Organization negotiations
that produced the cultural exception in relation to broadcasting.
So culture does cover a multitude of different things.
Q1954 Lord King of Bridgwater:
Can I turn to one point Professor Gibbons made? In the earlier
comments you said that you thought that the recommendation of
the investigations should be binding on the Secretary of State.
Is that right?
Professor Gibbons: Yes, the recommendation of
Ofcom with respect to pluralism.
Q1955 Lord King of Bridgwater:
That should be binding on the Secretary of State so that he has
no discretion over that at all and this is your way to get politics
out of it?
Professor Gibbons: I think we might put in "normally"
somewhere to allow for the possibility that there could be a major
public interest at stake with a major political dimension. I think
that to create a distance between the politics and the investigation
into the practice of pluralism one would want to go with the expert.
Q1956 Lord King of Bridgwater:
I was wondering which Secretary of State is going to carry that
legislation through, recommending he would be voted out on it,
but that is by the way. In this issue about the public interest
tests with newspaper mergers, do you think the arrangement and
the considerations that apply are sufficient to protect the diversity
and quality of news?
Professor Gibbons: Not entirely; the provisions
are I think broadly defensive and broadly precautionary. What
they do is seek to ensure that the status quo is not damaged by
the merger or the proposed merger, but if you were to say whether
that was adequate or ask me that I would say: no, because it does
not deal with the quality of news, the setting of the agenda,
the breadth of issues that are covered in the news. It does not
provide for any positive way of improving news quality. I do not
think we should perhaps expect it to do that. Maybe for that reason
then the notion of sufficiency is misleading because it implies
that what it does is adequate.
Professor Prosser: I do not have anything to
add. Again, we are very much in the difficulties of politics here,
are we not, because the sort of proposals that Professor Gibbons
mentioned I suspect would face very formidable political difficulties
in implementation. That is the problem.
Q1957 Lord King of Bridgwater:
How do you assess the way you measure the sufficiently of plurality?
Professor Gibbons: I do not think you can do
it other than by doing something like what the Competition Commission
did recently with the BSkyB ITV case, which was to talk to the
people on the ground and talk to the journalists and get a sense
of the extent to which they feel that they are being interfered
with. This kind of regulation does not tackle the real issue at
stake, which is the diversity of content. It circles around finding
surrogates for testing the diversity of content. One way it does
that is to ask: are journalists being interfered with by proprietors
or by the structure of the industry, the finances and the resources
and so on? In some ways that leaves the question at one stage
removed because you have to ask yourself: are journalists the
kinds of people who can take on this responsibility? In large
part, I think they are, with some perhaps modifications that we
might discuss later on. For that reason also I do not think you
can create a statutory test that goes much further than identify
a number of issues, which then have to be investigated in discussion
with the people who are doing the job, the journalists.
Q1958 Lord King of Bridgwater:
It is not just whether proprietors are interfering with journalists
but it is whether the proprietors are all concentrated in one
particular mindset or approach and that you can get plurality
by a plurality of proprietors who may interfere like mad with
the journalists but that might not matter so much.
Professor Gibbons: Indeed, yes.
Q1959 Lord King of Bridgwater:
There is an interesting thought, reflecting on this. We have had
evidence from people sitting where you are sitting now, the Chairman
and the Director-General of the BBC, being concerned that there
was what they called a soft left bias among the journalists who
worked at the BBC. In that case, you can see, and obviously Gavyn
Davies is on record, that if he had stayed on as Chairman, he
would probably have tried to alter that balance in some way, which
he obviously thought was necessary for plurality of view coming
out of the BBC. Would you like to comment on that?
Professor Gibbons: In an ideal world I think
we would want to have proprietors who were willing to have a debate
within their organisation about the purposes of journalism and
offer the journalists considerable scope to do what they think
is journalistically appropriate. Some proprietors perhaps do that
more than others.
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