READ: The MRC’s submission to the DCMS consultation on updating the media mergers regime

The UK is facing a severe crisis of concentrated media ownership. As detailed in our flagship ‘Who Owns The UK Media?’ report, the UK’s national newspapers, TV and radio broadcasters and online platforms are dominated by a small handful of companies. Media plurality is essential to a healthy democracy, but decades of unchecked market consolidation have led to giant corporations and unaccountable millionaire moguls exerting undue influence over public debate.

Over the same period, media mergers and corporate takeovers have exposed the weaknesses of the UK’s light touch media mergers regime, which has too often failed to account for how proposed deals have threatened journalists’ freedom of expression or reduced the diversity of viewpoints represented in our media. Recent deals, such as the 21st Century Fox/Sky takeover or the attempted purchase of the Daily and Sunday Telegraph newspapers by a UAE-backed consortium, demonstrate how the current laws are not equipped to meaningfully protect the public interest.

The DCMS consultation: a small step in the right direction

The Department for Culture, Media and Sport’s consultation on updating the media mergers regime is therefore a welcome move to reform an ineffective and outdated legal framework. Building on Ofcom’s recommendations from its own 2021 review, the government recognises that significant changes in the media landscape require reforms that reflect “the way in which news news is consumed in the modern day”.

The core proposals from DCMS involve revising the 2002 Enterprise Act – which defines the Secretary of State’s powers to intervene in media mergers – to expand the definition of ‘newspaper’ to account for online publications and magazines, in addition to traditional print newspapers. As we argue in our submission, this is an essential change for strengthening the mergers regime when online titles (especially those controlled by dominant media companies) are now central to how the UK public accesses and consumes news.

The urgent need for a proactive, progressive and accountable mergers regime

However, these changes on their own will do little to restore media plurality and protect the public from excessive concentrations of media ownership. Unless the regime is also empowered to intervene in media concentrations outside of merger situations, and unless the government and regulators have the means to impose public interest remedies on dominant media owners, then the legislation will continue to fail in its purpose to uphold essential democratic principles of plurality and viewpoint diversity.

The government has given itself a valuable opportunity to create a much more proactive and accountable media plurality regime, one that accounts for the pervasive role of online platforms and applies universal standards of independence, high editorial standards and regulatory compliance across all media mergers.

Our submission and analysis outlines the wider reforms DCMS should explore in its move to update the mergers regime:

Ofcom should be required to conduct regular plurality reviews to account for and respond to ‘organic’ changes in media markets that are not captured by the current post facto mergers regime. It has been over 10 years since Ofcom recommended (and the government endorsed) introducing regular reviews, and in that time concentration across UK media markets has intensified. The share of national newspaper circulation controlled by the three largest publishers has grown from 70% to 90%, and the print market control of DMG Media – the largest publisher – has risen from one-third to two-fifths. Creating a new statutory duty on Ofcom to conduct regular plurality reviews would allow the regulator to determine whether there is a sufficient range of news providers that is (a) consistent with the principles of an informed populace and (b) resistant to undue influence by media proprietors.

Neither the current regime, nor the government’s proposed changes, are equipped to tackle the pivotal role of online intermediaries and digital platforms in shaping how news is distributed, curated, discovered and monetised online. 64% of the UK public regularly uses an online intermediary (such as a search engine or social media network) to access news, and many of the most popular online sources are controlled by a handful of global ‘Big Tech’ corporations. There is an urgent need to expand the current range of tools and metrics used to track changes in media plurality, and this should feature as a central part of the regular plurality reviews conducted by Ofcom.

The updated mergers regime should introduce a universal ‘fit and proper person’ test on any media merger or takeover. The current legislation includes a provision for ensuring that media owners demonstrate a commitment to upholding high standards in media content, however this only applies to businesses seeking to control broadcast media outlets. Given that the government recognises the need to apply democratic principles of plurality to a much wider range of news media, it should also apply the spirit of this ‘fit and proper persons’ test to anyone seeking to control any UK news media outlet. This would empower interventions in media mergers where there are reasonable grounds to consider that an acting media entity would not uphold high standards of journalism, would not adhere to UK regulatory standards or has demonstrated patterns of corporate governance incompatible with controlling a UK news media outlet.

The legislation needs to include ‘clear bright line’ thresholds that automatically trigger regulatory interventions on media market ownership. Much of the current regime rests on the phrase ‘sufficient plurality’, leaving the system open to subjective interpretation by Ofcom’s ad hoc measurements and exposed to political interference. The lack of market caps to quantify excessive controlling shares of media markets has allowed already-dominant players to continue consolidating their market position without legal avenues for public interest intervention. Introducing a 15% threshold for both single market share and cross-market share would allow for proportionate interventions that remedy threats to plurality while removing the unnecessary and undemocratic role of discretionary powers.

The plurality regime should also include a suite of public interest remedies that scale with the extent of harm posed to media plurality and viewpoint diversity. This might include, but need not be limited to: structural remedies to insulate news operations from managerial and proprietorial influence, such as legal separation or journalist representation on company boards; public interest obligations that help to restore and sustain news provision in the wider media landscape, such as requiring dominant media businesses to invest in public media enterprises or to fund public interest reporting in local communities; and in extreme cases divestment, where a media owner has acquired excessive levels of ownership and influence over a news media market in a way that other remedies are unlikely to reduce the overall harm of that company’s market position.