Memorandum on Pluralism and Media Concentration addressed to the members of the European Parliament’s Intergroup on the Press,Communication and Freedom
1st March 2005
Introduction to the European Publishers Council
The European Publishers Council (EPC) is a group of 29 Chairmen and Chief Executives of European mediacorporations actively involved in multimedia markets spanning newspaper, magazine, internet and on-line database publishing (a list of members is attached at Annex 1).Many members of the EPC also have interests in private commercial television and radio.
The EPC welcomes the opportunity to contribute to the discussions of the Intergroup. In this paper we focus on technological advances in the media field as we feel that the main influence on patterns of media ownership in recent years is the development of an internet content market. We hope that your discussions on media concentration take place within this broader context. In particular we ask you to take into account the impact of the internet on traditional mass media markets and to acknowledge the benefits that this has already brought to citizens in terms of media diversity, freedom of expression and access to information in Europe.
This very media diversity brings new challenges. As both the technologies and markets converge, publishers face new forms of competition from players not traditionally associated with the publishing market. These new competitors include state-funded broadcasters, computer software and telecommunications companies as well as the many internet service providers which offer a wide range of news, information and entertainment services.
The internet is not, of course, a traditional mass medium like radio and television, distributing expensively produced or acquired programme assets to very large audiences. Unlike the traditional broadcasting industries, which were entirely fashioned by legislation, the internet has grown organically and freely, albeit within a framework of general law(e.g. on defamation, obscenity, advertising, etc).
For over half a century the growth (or rather restriction) of competition was solely under Government control. Rooted in an era of spectrum scarcity Governments sought artificially to promote pluralism through public funding of state controlled broadcasters and statutory restrictions on ownership of private television and print media. The present situation with the internet is substantially different. It is a market largely outside the control of national governments, where citizens benefit substantially from this new architecture:a wide diversity of suppliers, unrestrained by unfair competition from any dominant player.
Ensuring fair competition
The internet, broadband, mobile and wireless technologies have all contributed to the development of a highly competitive and dynamic mass media market. It is axiomatic that, in an era of burgeoning diversity, it is no longer appropriate to single out traditional media companies in the private sector – print, radio and television, and subject them to specific types of restriction at national or European level which would hamper their ability to compete in the broader mass media market. Any new regulatory framework must therefore be proportionate and limited to what is strictly necessary to achieve clearly identified objectives.
It is essential that Governments and competition authorities (national and European) ensure fair competition in this highly complex market and act to prevent new forms of unfair competition emerging. In particular we would like to highlight the growing dominance of state funded broadcasters currently under investigation by the European Commission in several countries.
State aid has a considerable distorting effect on competition in the media market
- State Aid to publicly funded broadcasters is growing more than 20% ahead of forecast EU GDP growth. This amounts to more State Aid than to agriculture, making publicly funded broadcasters the third most subsidised " industry " in Europe. This adversely affects the whole media industry in Europe including the press and internet publishing, not only private TV and radio broadcasters.
- Publicly funded broadcasters who collect advertising revenues in addition to State Aid distort markets in excess of what is acceptable.
- Massive amounts of State Aid combined with inappropriate regulation affect trading conditions and competition within Member States in a way that is contrary to the common interest.
- Lack of political will, unimaginable in other sectors, has and continues to undermine the European media market, giving the US competitive advantage.
Attached at Annex 2 you will find our own assessment of unfair competition from state funded media (produced in association with ACT and AER).
Media concentration and pluralism
The European Publishers Council fully supports the measures taken by the Member States to ensure that media pluralism is guaranteed, and agrees that the full rigours of competition policy should be applied at both national and European level. However the EPC is opposed to any new legislation at the European level to regulate media concentration and pluralism for three main reasons.
- We feel that it is no longer appropriate to single out traditional media companies for sector-specificrestriction when the media market is now much broader and complex.
- An internal market directive will not meet its stated objectives of removing barriers to cross-border investment or stimulating growth in the media sector. On the contrary, we believe media specific legislation to regulate media concentration will discriminate disproportionately against traditional media companies such as publishers.
- The question of pluralism must be judged and dealt with at the local, i.e. national level against carefully measured public interest objectives.
Our comments are made against the following background:
We recognise that both the telecommunications and media sectors are prone to concentration as successful companies attract more customers and profitable companies attract offers of take-over, merger or joint venture.In such a competitive business environment we welcome vigilant antitrust regulation. Many concentrative joint ventures involving media companies already fall within the Commission’s competence and the EPC has always supported the Commission’s moves to reduce the thresholds and simplify procedures under the EU Merger Regulation.
Why a directive would not meet its stated objectives of either removing barriers to cross-border investment or improving media diversity:
- There is no case for an internal market directive because the barriers that exist are commercial (often connected with acquisition and exploitation of rights), cultural and linguistic, not legal.No amount of harmonising legislation would remove these barriers.
- Publishers feel a directive that deals only with newspapers, TV and radio unfairly discriminates against these traditional media.Telecommunications companies, software conglomerates, Internet access and service providers and increasingly publicly funded broadcasters all compete with publishers online, none of which would be caught by a media ownership directive, even though their media market share will be increasing year on year.
- With the advent of digital technologies, particularly the introduction of digital television, European consumers will be able to receive hundreds of different information and entertainment services from all over the world. Many of these new services are interactive,changing the face of media as we know it today. The convergence of traditional media companies with new players, new types of electronic services and new forms of delivery will lead to lowered barriers to entry and increased consumer choice without the need for media-specific restrictions on ownership or audience share to promote diversity.
- A converged multimedia market, with a glut of choice, reduces the need for regulators artificially to promote plurality through media-specific legislation.
- With dramatic increases in Internet use and the start of digital television the regulatory framework must recognise the natural shift away from centralised regulatory controls which were necessary in days of spectrum scarcity. Plurality will be guaranteed by the unprecedented increases in media sources and content.
- Self-regulation by content providers will play a major part in content control in the future as global networks proliferate. Voluntary rating systems, together with technical means of protecting and filtering content, will be important contributions to content control without endangering freedom of expression.
Angela Mills Wade
European Publishers Council