Can legislation match the pace of media mergers?
Opinion
A modernisation of the merger rules is long overdue, but change in the public interest is afoot, explains Ray Snoddy.
Sometimes the water boils so gradually that not just frogs but media professionals can miss profound changes happening before our eyes.
We can now say without a doubt that we are in an era of media mergers and consolidation, and if anything, the process is likely to intensify.
Naturally, things come bigger in the US with the likes of Paramount, Sundance, Netflix and Comcast sharpening their bids for the likely more than $60bn takeover of Warner Bros Discovery following the $8.4bn merger of Skydance Media and Paramount Global.
On a more modest scale in the UK, Sky’s owner Comcast is also involved in trying to take over ITV, and then, in the ancient world of print, Lord Rothermere’s DMGT hopes to be able to buy The Daily Telegraph, rudderless in ownership terms for the past two years, for £500m.
The underlying reason for all this activity is equally apparent – the startled reaction of media groups to being increasingly squeezed by the online technology groups, which have been allowed to assemble monopolies that the steel and railroad barons of the 19th century could only dream about.
So far, as the US is concerned, nothing will happen while President Trump is in office, which is why most of the multi-billionaires are happy to abase themselves by kneeling and kissing his ring.
Unfortunately, within the media conglomerates, television news organisations seeking regulatory approval from the Trump regime are trapped, having to apologise and pay up for doing their job of criticising the US President.
Accompanying the accelerating moves towards greater consolidation is the equal truth that technology and human greed have outstripped regulators’ and lawmakers’ ability to keep up.
Few have managed to get to grips with the impact, not just on the media but on society as a whole, of trends such as international streaming, which were barely conceived when many of today’s M&A rules were drawn up.
In a small but perfectly formed example in the UK, no one imagined that a broadcaster, such as GB News, would seek to push impartiality obligations to the limit by paying large sums of money to a sitting MP – and a party leader to boot – to present a programme on a television news channel.
At least in a modest way, culture secretary Lisa Nandy is currently trying to update a media merger regime set out in the Enterprise Act of 2002.
The consultation period ends in good time for Christmas, and the hope is that modernisation will then allow “greater scrutiny in the public interest” of deals involving UK online news publications and news magazines.
You will be glad to know that news publications include those published weekly or monthly, such as The Economist and Prospect magazines.
Perhaps more immediately relevant, the plan is to bring online versions of newspaper publishers under the scope of updated media merger rules.
Some of the changes can be made by secondary legislation, and the online efforts of the Daily Mail and the Telegraph should be part of any consideration of their planned merger.
According to Ofcom, nearly a quarter of all adults in the UK access news via print newspapers, though this rises to 34% when online platforms are included. Their overall reach is obviously greater still when international impact is included.
If this all seems rather parochial, that is because it is.
The law seems terribly incomplete in tackling the tech giants on three almost existential issues: the age at which children can access online content, proper compensation for the originators of news and other editorial content, and ensuring that the tech giants from California and China pay their fair share of taxes.
On the first, there was the “alarming” news yesterday that in the UK, more than 800,000 children between three and five could be using social media.
It came from an analysis of Ofcom data by the Centre for Social Justice.
A former schools minister, Lord Nash, expressed concern that children who have not yet learned to read are being fed “algorithms designed to hook adults.”
While parents must clearly accept some responsibility, Lord Nash called for urgent legislation in the UK to raise the age limit for use of social media to 16, while holding tech giants to account.”
Australia has already led the way by passing just such legislation. From 10 December, social media platforms will have to take “reasonable steps” to prevent under 16’s having social media accounts.
Clearly, there are definitional problems there, but it is at least an essential first step – the importance of which has been underlined by recent research that suggests the human brain does not fully transition from its adolescent to adult stage until the age of 32.
On compensation…
Several other countries are taking more robust action than that of the UK, and that could be the start of something big.
Swedish publishers have filed a criminal complaint against Meta Platforms, owner of Facebook and Instagram, alleging copyright violations and misuse of data.
Much more importantly, a Spanish Court has ordered Meta to pay 87 Spanish publishers €542m (£476m) in compensation – a sum just about large enough for Meta to notice.
The allegation was that Meta used personal data to gain an unfair advantage over its competitors by using personal data to deliver targeted ads without proper consent.
If the case survives, the inevitable appeal has considerable implications, because isn’t that what Meta does everywhere?
Perhaps hoping that the tech giants, and more traditional media owners such as DMGT, can be persuaded to pay a fair share of tax is a matter for another day.
As the wave of media mergers continues, let’s focus on modernising merger rules in the public interest and persuading, or forcing, the tech giants to contribute more to the publishers who create much of the content that makes them rich.
Raymond Snoddy is a media consultant, national newspaper columnist and former presenter of NewsWatch on BBC News. He writes for The Media Leader on Wednesdays — bookmark his column here.