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Media pluralism: Cable, Murdoch and the BBC



This is how BBC reported Vince Cable’s now famous ‘outburst’.

Vince Cable, like Nick Clegg, appears to have developed a bit of a Messiah syndrome recently, despite being 8% in the polls. Vince appears to have developed curious delusions of grandeur, thinking that he can make or break the coalition, and also that can break the Murdoch empire. This scoop was brought to the BBC by a whistleblower to the BBC Business Editor Robert Peston who to all intents and purposes appears to have practiced responsible journalism. Concerns remain that inside information from time to time leaks into the market, whether accidentally or intentionally, and may be misused: this is a particular issue in relation to inside information about mergers and acquisitions.

On the day the bid was announced in June, most commentators thought it would go ahead without much difficulty, subject to agreement on price. BSkyB was already seen by government and regulators as part of the Murdoch empire, even though News Corp held only 39 per cent of the shares. However, in September, there began a fierce campaign in the press and parliament arguing that the Murdoch empire would have even more power if it owned all the BSkyB shares. The plain facts are that today European Commission has unconditionally approved News Corp’s bid to acquire BSkyB. In a statement, Joaquin Almunia, EU Competition Commissioner, said: “I am confident that this merger will not weaken competition in the United Kingdom. The effects on media plurality are a matter for the UK authorities.”

To any reasonable observer, Vince Cable calling for war on Murdoch’s successful empire is rather extreme to say the least. Presumably, one shouldn’t read too much into his lack of impartiality by dancing with Alesha Dixon on the Christmas Day special of BBC ‘Strictly come dancing’.

The judgment which came back from Europe today had an emphasis on cross-border media pluralism. Traditionally, Europe’s media companies focused their activities on their national markets. However, in the last 10-15 years a number of media companies have grown significant business outside their primary markets. It has given rise to concerns that it will damage the freedom of expression and information in Europe that are vital both from a democratic and a cultural perspective. Cross-border media concentrations include several phenomena such as media conglomerates distributing their products in many countries, including broadcasts, companies operating directly or indirectly in the media market of more than one country and legal entities owning media companies in several countries. This is the issue which was primarily of concern to Europe. Presumably the BBC falls within the definition of a media conglomerate, and is not expected to partake in cartel and abuse of dominant behaviours itself.

News Corp wants to by the 61% of the pay-TV operator that is does not already own for £7.8 billion. However, independent directors at BSkyB, which operates the 24-hour channel Sky News and provides pay-TV, broadband and telephony services, have previously rejected News Corp’s offer as too low. News Corp officially notified the European Commission of its planned takeover bid on 3 November. The commission conducted an initial investigation before responding today. OFCOM will now examine the deal to investigate media plurality issues in the UK, focusing on content types, audiences, media platforms, control of media enterprise and future developments in the media landscape. Business Secretary Vince Cable will stay in cabinet despite “declaring war” on Rupert Murdoch, says Downing Street. However, he will be stripped of his powers to rule on Mr Murdoch’s bid to take control of BSkyB, which will be handed to Culture Secretary Jeremy Hunt. Jeremy Hunt will though the final say over whether the takeover should be allowed to go ahead amid concerns about press freedom and consumer choice. Note – OFCOM will analyse the legal and public interest issues carefully – not Jeremy Hunt on his own. OFCOM is expected to report back to Jeremy Hunt by 31 December 2010.

Jeremy Hunt will then decide whether to refer the issue to the Competition Commission. This is an independent body, which conducts in-depth inquiries into mergers, markets and the regulation of the major regulated industries, ensuring healthy competition between companies in the UK for the benefit of companies, customers and the economy. It is not the case that the Competition Commission can only block it altogether for Rupert Murdoch. Where an inquiry is referred to the CC for in-depth investigation, the CC has wide-ranging powers to remedy any competition concerns, including preventing a merger from going ahead. It can also require a company to sell off part of its business or take other steps to improve competition.

This was never going to be solely an issue for Vince Cable or Jeremy Hunt. However, it could be that Jeremy Hunt feels that this merger does not pose a threat to UK media competition. It has long been argued that the BBC that what the BBC offers is distinctive from commercial media outlets. If Jeremy Hunt then decides to side with the BBC, it could well be that Jeremy Hunt and the Conservatives do not get the media backing from the BBC and the main newspapers including the Sun that they desperately need in 2015 to gain public support and to win the 2015 General Election (assuming that the coalition lasts that long). Therefore, whilst Jeremy Hunt can overrule the decision by the Competition Commission, he will have to have very strong reasons for doing so – Rupert Murdoch may be very happy, or not.

As it happens, I hope sincerely that Rupert Murdoch wins this media battle, as I feel the people who should be taught a lesson they won’t forget are the BBC, not the News Corp. Not as inflammatory as Vince Cable’s message, but meant with the same conviction, I’m afraid.

(c) Dr Shibley Rahman 2010. Dr Shibley Rahman is an academic lawyer and company director who works in London.

Dr Shibley Rahman, PhD FRSA LLB(Hons)

Dr Shibley Rahman is an academic whose specialist interests include the behavioural variant of frontotemporal dementia, dementia generally, commercial law and business. He is a Queen’s Scholar, and obtained the second highest First Class Honours degree in 1996 at the University of Cambridge in neurosciences. He is disabled, having survived six weeks in coma in 2007 due to meningitis.

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