Select Committee on Communications Minutes of Evidence

Examination of Witnesses (Questions 1943 - 1959)


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.

previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2008