New Ofcom Guidelines Could Tie-Up Major Media Mergers
Communications regulator Ofcom has set out proposals for new guidelines that could hamper Government plans to make media mergers easier in the newly deregulated marketplace.
The cross-media watchdog, which assumed its full responsibilities last week, plans to investigate companies hoping to complete deals that could fall foul of the plurality test amendment to the Communications Act.
The new proposals will see Ofcom scrutinise bids from broadcasting groups and established newspaper owners in a move that will increase its regulatory burden and bring it in-line with the Office of Fair Trading.
The regulator will offer informal advice and confidential guidance, but analysts claim the sheer scope of the review process could stifle efforts by Express Newspapers, Daily Mail & General Trust or any other potential bidders, to buy The Daily Telegraph.
The new Communications Act gives Trade and Industry Secretary, Patricia Hewitt, the power to intervene in major media mergers that she believes raise competition concerns. She will pass her concerns onto Ofcom, which will investigate the public interest implications of the deals in question (see Ofcom Chairman Welcomes Puttnam’s Plurality Test).
Newspaper groups looking to merge will be requested to give details about the number of column inches devoted to advertising, news, sport and features. Ofcom will also examine the acquiring company’s track record on editorial interference, as well as its political allegiance.
Meanwhile, broadcasting groups will have to detail the proportion, range and cost of programmes made outside the M25. Ofcom will also want information on how the company will ensure the accurate presentation of news following the merger.
The Government was forced to accept the eleventh hour plurality test amendment after a group of rebel peers threatened to vote down the Communications Bill unless plans to allow large newspaper groups to buy Channel Five were amended (see Government Ends Media Ownership Deadlock).
The amendment, put forward by Lord Puttnam, arose out of the concern that the relaxation of media ownership regulations would give Rupert Murdoch too much power in the newly deregulated landscape.
Ofcom: 020 7981 3000 www.ofcom.gov.uk
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