Supplementary letter from the Department
for Business Enterprise & Regulatory Reform
During my evidence to the Committee on 2 April,
I promised to write following up more fully on one or two of the
points raised by the Committee. In particular the Committee were
interested in the circumstances under which the Secretary of State
had the power to issue an intervention notice in respect of a
media merger—including whether a public interest intervention
could be made in circumstances where a foreign company with no
presence in the UK media market bought a UK media enterprise or
where a US internet company (such as Google) bought a UK media
asset.
The Secretary of State has the power to intervene
in any media merger if he believes (i) it is or may be the case
that a relevant merger situation has arisen and (ii) that the
relevant merger situation concerned raises particular concerns
relevant to the media public interest considerations specified
in Section 58(2A), (2B) or (2C) of the Enterprise Act 2002. These
considerations relate to the need for accurate reporting and free
expression of opinion in newspapers, plurality of views in newspapers,
plurality of persons with control of media enterprises, a wide
range of high quality broadcasting and commitment to broadcasting
standards.
The question of whether the acquirer involved
is foreign or domestic is not relevant to decisions on whether
or not intervention may be appropriate in a particular case. The
test concerns whether or not a merger is liable to give rise to
public interest concerns. This is considered on the same grounds
irrespective of the nationality of the acquiring party. EC law
prohibits applying merger control powers in a way that discriminates
on the basis of an acquirer's nationality.
Decisions on whether to use the powers to intervene
in any particular case—including the hypothetical cases
indicated by the Committee—can only be taken based on an
assessment of the specific applicable circumstances. However,
as the Committee is no doubt aware, there is published guidance
that aims to set out the Government's policy on the use of the
powers and to indicate when intervention in media mergers may
be likely to be considered. For reference, this can be found on
the BERR website at http://www.berr.gov.uk/bbf/competition/mergers/public-interest/newspaper/index.html.
I hope this is helpful.
19 May 2008
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