"MEDIA PLURALITY PUBLIC INTEREST CONSIDERATION

(1) Section 58 of the Enterprise Act 2002 (c.40) (specific considerations) shall be amended as follows. (2) After subsection (2B) (which is inserted by section 368 of this Act) there shall be inserted – "2(C) The public interest in the promotion and maintenance-" (a) of a plurality of media owners committed to a balanced and impartial I presentation of news and to a balanced presentation of comment, and (b) of a wide range of voices such as to satisfy a variety of tastes and interests is specified in this section.

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(3) In subsection (3), after the words "any consideration", there shall be inserted "(other than the consideration specified in subsection (2C))"."

¶5.58 Lord Puttnam explained that the Joint Scrutiny Committee's proposed plurality test lay at

the heart of its conclusions and recommendations about media ownership. The committee regarded it as one of three non-negotiables and the test needed to be: "...sufficient to look across all media and make determinations in the best interests of the citizen..."237 On the question of the underlying rationale of the amendment he said:238

"Much has been made in the past few weeks of the underlying rationale of the amendment. I have heard it referred to as "the Murdoch clause"; it has even been described as something that attempts to demonise sections of the media. That is not and never has been the case. The Secretary of State was entirely right in insisting that the Bill and the amendment were entirely "proprietor neutral". It is more to do, as I see it, with attempting to make our democracy proprietor neutral."

¶5.59 He later summarised the aim of his amendment as "...a move towards making the "Berlusconi-

isation" of British democracy an impossibility.239 Lord McIntosh, for the Government, supported the principle behind the amendments but expressed concerned about the details:240

"Taken to one possible logical conclusion, the text of the amendment could have the effect of stopping broadcasters from being impartial and allowing them to have "views and opinions" ... The amendments would also seem to encourage the introduction of content regulation into newspapers ..."

¶5.60 Lord McIntosh summarised the main points in favour of a plurality test: it would allow for the

gradual dismantling of media ownership rules over time; it would be flexible enough to cope with changed circumstances (in this regard he posited the growth of Channel 5 to approach that of Channel 3 in size and reach); and it would allow judgments on media mergers, based on the particular circumstances of the case (in contrast to the cliff edge effect of the 20:20 Rule).241

¶5.61 Turning to the test to be applied, Lord McIntosh promised that a plurality floor would be maintained:242

"It will be for Ministers to determine whether the merger causes sufficient plurality concerns for it to be blocked, or for conditions to be attached. Similarly, the test must also recognise that there is a minimum level of plurality which must be maintained."

¶I

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¶5.62 Significant limitations on the circumstances in which the Secretary of State would, in practice, intervene were signalled:243

"We propose that the power be wide enough to capture all media mergers, including cross-media mergers. We would intend as a matter of policy normally to apply the test in practice only to those areas where the current rules are being removed completely. This means that, usually, the Secretary of State would consider intervening on plurality grounds only in the following areas: national newspapers with more than 20 per cent of the market/Channel 5; national newspapers with more than 20 per cent of the market/national radio service, Channel 3; Channel 3/national radio; Channel 5/ national radio; and national radio/national radio." (emphasis added).

¶5.63 On the delicate question as to the practical effect of the Government's intended test, Lord

¶McIntosh would give no specific guarantee:244

"The noble Lord, Lord Puttnam, asked whether this test would "effectively rule out" a major national newspaper owning Channel 5. The answer is that the test will ensure that the Secretary of State can investigate any merger which threatens plurality. It will clearly prevent unacceptable levels of cross-media dominance. But it is inherent in the nature of a test that one cannot predict the outcome in advance of any individual case. It will be necessary to analyse and consider all the relevant circumstances at the time on a case-by-case basis."

¶5.64 Guidance was intimated in order to afford industry some degree of certainty and, in particular,

to set out in more detail those areas whether the test would generally be applied and the factors that would be considered. Wider application of the test in "extreme and rare" cases was, understandably, not ruled out.245

¶5.65 These assurances proved sufficient for Lord Puttnam who withdrew his amendment.246

Subsequently, the amendment to the Enterprise Act 2002, effected by the Communications Act 2003, inserting the media plurality test, was in these terms:247

"Media public interest considerations "After subsection (2) of section 58 of the Enterprise Act 2002 (considerations specified as public interest considerations for the purpose of the main merger regime) there shall be inserted – "(2A) The need for- accurate presentation of news; and free expression of opinion; I in newspapers is specific in this section.

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(2B) The need for, to the extent that it is reasonable and practicable, a sufficient plurality of views in newspapers in each market for newspapers in the United Kingdom or a part of the United Kingdom is specified in this section. (2C) The following are specified in this section – (a) the need, in relation to every different audience in the United Kingdom or in a particular area or locality of the United Kingdom, for there to be a sufficient plurality of persons with control of the media enterprises serving that audience; (b) the need for the availability throughout the United Kingdom of a wide range of broadcasting which (taken as a whole) is both of high quality and calculated to appeal to a wide variety of tastes and interests; and (c) the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine commitment to the attainment in relation to broadcasting of the standards objectives set out in section 319 of the Communications Act 2003."

¶5.66 Had it not been for Lord Puttnam's amendment, the deregulatory effect of the 2003 Act

would have been even more extensive than it was. In particular, there would have been no restriction, other than ordinary competition law, to prevent News Corp from acquiring and then investing heavily in Channel 5 and thereby becoming an even more powerful media presence in the United Kingdom.248

¶Reflections

¶5.67 The evidence does not support an inference of an agreement between Mr Murdoch and Mr

Blair. Not only did Mr Blair flatly deny any such deal but the contemporary papers, discussed in detail above, reveal very considerable thought, genuine debate and reasoned decision making during the development of the policy underpinning the 2003 Act.

¶5.68 Mr Blair's approach to the 2003 Act was driven by the views which he expressed in his

evidence (as held at that time – they changed later) including his desire to deregulate and to encourage foreign investment in what was a rapidly changing and globalising market. The approach was congruent with, but not necessarily a product of, his strategy to foster better relations with some sections of the media than his predecessors had enjoyed.

¶5.69 The amount of consultation and dialogue involved during the development of the policy was noteworthy. There was considerable industry lobbying. Some of this was not transparent. I I make no criticism of those involved; standards of transparency were in keeping with the

times. Both on its own and when collected with other examples, the significance and value of transparency is increasingly obvious.

¶5.70 The views of large media companies were undoubtedly taken into account but so were those

of others with contrary views. The evidence has not demonstrated bias or unfair advantage resulting from media lobbying. Insofar as media representations were preferred over competing representations the documents show that it was the result of a proper weighing of the opposing arguments, and consistent with the deregulatory policies of the decision makers.

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