An Inquiry into the Culture, Practices and Ethics of the Press
The Press Council of Ireland and the Press
The Press Council of Ireland and the Press
Ombudsman History and background
¶1.1 The Irish Press Council and Ombudsman system was set up in 2007 as a direct response to
the threat of legislation from the Irish Government. The Chair of the Press Council, Daithí O'Ceallaigh, described the agreement eventually reached between the Government and the industry as:1
"a win-win solution….[where] at least some of the changes in defamation law sought by the industry would be incorporated in a new Act and, in return, the industry would sponsor an independent Press Council and Press Ombudsman along lines broadly acceptable to government."
¶1.2 In the mid 1990s the Irish Government set up a Commission on the newspaper industry; in
1996, that body recommended the establishment of a Press Ombudsman, but no action was taken.2 Then in 2002, the Minister for Justice, Michael McDowell, set up an expert advisory group which reported in 2003 with a recommendation for a statutory system of regulation for the press.3 The industry set up a steering committee to consider its response; this committee included representatives of all the major newspaper groups in Ireland, including some of those based in the UK, namely News International and Trinity Mirror.4 This group ultimately developed a model for the Press Council, which was to be independent of Government and, in its operations, independent of the industry; this was the model that was adopted for the new Council and Ombudsman in the summer of 2007.
¶1.3 Professor John Horgan, the Irish Press Ombudsman, explained to the Inquiry his understanding
that the Press Council had been established with the quid pro quo that that Government would withdraw its proposals for the statutory regulation of the press.5 At the same time, the Government agreed to use the legislative opportunity provided by the Defamation Bill in 2009 to offer some statutory underpinning for the new Council.6
¶1.4 Professor Horgan made it clear that the industry considered there to be a very real threat
that the Government would legislate for press regulation in the absence of an adequate self- regulatory solution:7
1709"LORD JUSTICE LEVESON: But behind it all, do I gather from what you were saying somewhat earlier, was the threat of statutory regulation?
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A. Absolutely. LORD JUSTICE LEVESON: So in other words, it behoved the press interests to come up with a solution that was less than the club that was being held over them? A. That is absolutely the case. And in fact my membership, or our membership of the Alliance of Independent Press Councils of Europe indicates that in quite a few countries this threat has been the engine which has generated or promoted the successful establishment of press councils of the same kind in many European countries. So even though before this threat was made, there had been moves towards the establishment of something like this, the 1996 report of the commission, which wasn't under such a threat, recommended the establishment of an ombudsman. As I said, it was the real and present danger of that that created the situation in which we found ourselves."
¶Legal recognition 1.5 In practice the Defamation Act 2009 set out some fairly detailed requirements for the structure,
coverage and operation of a Press Council before it could be recognised under the legislation; this meant that, whilst the detail of both the code of practice and the complaints mechanism were left to the industry to set, the broad framework was dictated by the legislation if the industry wanted to take advantage of the protection offered by the Act. Professor Horgan told the Inquiry: "without the benefit of knowledge of what went on behind closed doors in the four years leading up to the creation of the Press Council, it might be thought that this legislation represents a framework imposed by the state on the private sector. Whereas in fact – and Professor Thomas Mitchell has briefed me extensively on this – by and large the provisions relating to the Press Council that found their place in the Defamation Act were those proposed by the Press Council itself to the government." There is scope within the Act for the industry collectively to decide not to create a Press Council, and for any individual journal to decide not to participate. However, the Press Council of Ireland, as currently constituted, was established before the Act came into force and all significant publishers of newspapers in Ireland are members of the Council.8
¶Benefits 1.6 The Act provides a defence of 'fair and reasonable publication' to a defamation action.9 In
1710the case of a statement published in a periodical by a person who at the time of publication was a member of the Press Council, a court in considering whether publication was fair and reasonable may take into account the extent to which the person adhered to the code of standards of the Press Council and abided by determinations of both the Press Ombudsman and the Press Council.10 There was, as yet, no case law on this.11 Professor Horgan clarified that this did not mean that the defence was only available to those who had signed up to the system. The defence was also available, in theory, to other publications if they could satisfy
¶PART K | Regulatory Models for the Future
the court that they operated to standards and procedures in no way inferior to those of the Council. Similarly, this had not been tested in court and Professor Horgan said:12 "My honest view it that it would be quite difficult for publications that are not members of the Council to satisfy a court that they operate to such standards."
¶1.7 In order to enact these benefits, the Act makes provision for the Minister, by order, to
recognise a body as "the Press Council" for the purposes of the Act. The requirements for recognition are specific and detailed and it is worth setting them out here to show the extent to which the Defamation Act establishes the objectives and the structural independence of the Press Council, the approach to dealing with complaints and the overarching coverage of the code of standards.
¶1.8 Only one Press Council may be recognised at any one time. Before the Press Council can
be recognised the Minister must satisfy himself that it meets the specifications set out in Schedule 2 to the Act. He can revoke the recognition at any time he considers that the Press Council fails to meet the specifications in the Schedule.13 So far this power has been used once, in April 2010, to recognise the Press Council of Ireland as 'the Press Council'.
¶1.9 Schedule 2 of the Act requires that the Press Council should have the principle objectives of:14
"(a) ensuring the protection of freedom of expression of the press, (b) protecting the public interest by ensuring ethical, accurate and truthful reporting by the press, (c) maintaining certain minimum ethical and professional standards among the press, (d) ensuring that the privacy and dignity of the individual is protected."
1711Interestingly, Professor Horgan told the Inquiry that the primary purpose of the Press Council was:15 "to maintain the rights of the press to freedom of expression, to maintain the independence of the press from the State and State control or regulation and to decide on appeals against decisions or the Press Ombudsman on complaints." with the primary role of the Press Ombudsman being:16 "to receive and adjudicate on complaints, to raise public awareness of the work of his Office and of the Council, and to encourage and promote the highest ethical standards of journalism in Ireland." Meanwhile, the website of the Press Council says that the objectives of the Press Council are:17 • "To provide the public with an independent forum for resolving complaints about the press.
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- To resolve all complaints quickly, fairly and free of charge.
- To defend the freedom of the press and the freedom of the public to be informed."
¶1.10 Specific provision is made in the Act about the structure of the Council, the number of
members and how many of those members should independently represent the public interest, the interests of owners and publishers, and of journalists.18 The Schedule makes requirements about the independence of the appointments procedures; it requires that the Minister should be satisfied by the independence of the appointments procedure but gives him no role in establishing or operating it.19
¶1.11 Professor Horgan told the Inquiry that it was clear to the industry when they were formulating their proposals for the Council that:20
"one critical aspect of what the industry proposed to establish, without which no possible measure of Government acceptance or approval would have been available, was independence."
¶1.12 It is a requirement of the Act that the Press Council should be funded by subscribing journals and should receive no funding from other sources.21
¶1.13 The Act requires that the Press Council should appoint a body (the Press Ombudsman) to
resolve complaints about the conduct of its members. The Press Ombudsman is to have the power to require publication of its own decisions, corrections, retractions and "such other action as the Ombudsman may, in the circumstances, deem appropriate". Decisions of the Ombudsman are to be appealable to the Press Council itself, which is to have similar powers in respect of requiring publication of decisions.22
¶1.14 The Press Council must have adopted a code of practice with which all members are required to comply; this includes:23
"(a) ethical standards and practices, (b) rules and standards intended to ensure the accuracy of reporting where a person's reputation is likely to be affected, and (c) rules and standards intended to ensure that intimidation and harassment of persons does not occur and that the privacy, integrity and dignity of the person is respected."
¶The Press Council 1.15 The Council was created by the Press Industry Steering Committee, comprising the publishing trade associations and the NUJ, in accordance with the provisions set out in the Act.
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¶Appointments
¶1.16 The Act requires the Press Council to comprise 13 members, of whom seven are independent
members representing the public interest, five represent the interest of owners and publishers and one represents the interest of journalists.24 The public interest members are appointed by an independent four-person Appointments Committee, on the basis of public advertisement and interview.25 The Chair of the Council is appointed from within the public interest members, although in practice external applications have also been invited.26 The industry and journalist members are nominated by the various organisations that took part in the steering committee and the Appointments Committee ratifies the nominations. Professor Horgan explained that there was not an automatic guarantee of appointment for those who were nominated, but he could not readily foresee a situation in which such nominations would not be ratified.27
¶1.17 The first Appointments Committee was appointed by the Press Industry Steering Committee.
Subsequent appointments to the Committee are made by the Press Council. The appointments are for three years; that first Committee was subsequently re-appointed for a second three year term by the Council in July 2010.28 As of August 2010, the Chair of the Council was also the Chair of the Appointments Committee.29
¶1.18 The five industry members of the Press Council are current senior editorial executives,
although not usually editors. The only serving editor currently on the Council is the editor of a regional publication; he fills the slot effectively reserved for regional newspaper editors.30 Professor Horgan suggested that the absence of serving editors has worked well for the Press Council, particularly because he thought that there was more change of personnel than might be expected if editors were to hold the seats. The appointments are for a three year term, and can be extended for a second term; however, some four and a half years into the Council's existence, only one of the original industry representatives is still a member of the Council.31
¶1.19 Professor Horgan told the Inquiry that the public interest majority on the Council was essential
to the public acceptance of the independence of the model.32 He also regarded the presence of a journalist member on the Council alongside the industry members as essential.33
¶Structures and Funding
¶1.20 In line with the requirements of the Defamation Act, the Press Council is wholly funded by
1713the press industry. The finances of both the Press Council and the Press Ombudsman are provided by the Administrative Committee of the Press Council; the Committee is chaired by an independent member of the Council but otherwise consists of representatives of the different types of publications covered, together with the NUJ. Each title covered by the Council pays a levy based on circulation.34
¶Chapter 5 | International Comparators
¶1.21 Making a complaint is free to the complainant.35
¶The Code 1.22 The code was originally drawn up in 2007 by the Steering Committee. There is now a Code
Committee, which is chaired by an independent retired journalist and comprises nominees of the industry bodies. Serving editors have the right to be on the Committee but, for the most part, they are represented by deputies or senior executives. The Ombudsman sits on the committee in an ex-officio capacity.36 Any changes to the Code are made in consultation with the Council. The Council can also suggest changes to the Code Committee. There have not, in fact, been any significant changes since the code was originally drafted.37 It may be worth noting that the code would have been available to the Government to see when formulating the terms of the 2009 Defamation Act.
¶Coverage 1.23 All national newspapers, including all the UK papers that are published in Ireland, and over
90% of regional newspapers, are members of the Press Council. Around 60%, by number, of periodicals are members of the Council, but this would account for considerably more than 60% of circulation as the larger magazines are members.38 Since the creation of the Council no members have left, or threatened to leave, the system.39 Recently a news website has applied for membership and the Council is considering the appropriate criteria for membership of web media.40
¶Public awareness and satisfaction 1.24 Professor Horgan told the Inquiry that public awareness of the Press Council and Ombudsman
was limited. A public awareness campaign had been launched in an attempt to make the services provided by the Ombudsman more widely known.41
¶Impact of statute on freedom of speech and the public interest 1.25 Professor Horgan did not think that the statutory recognition afforded to the Press Council
by the Defamation Act constituted a limitation on the freedom of expression because the limitations in the Act were, by and large, those proposed and endorsed by the industry itself as a necessary balancing of the right to publish against the rights of individuals.42 The belief of the Council in the importance of the freedom of the press is reasserted in the preamble to the Code.43
¶1.26 In this context it is worth noting that all UK titles that publish in Ireland are members of the
1714Council; they do not appear to allow any principled objections to statutory underpinning of press self-regulation to get in the way of constructive and willing participation in this system.
¶PART K | Regulatory Models for the Future
¶1.27 The public interest is not defined in the code, and it is left up to the Council and the Ombudsman to interpret it on a case by case basis. The code does set out a general principle:44
"that the public interest is invoked in relation to a matter capable of affecting the people at large so that they may legitimately be interested in receiving and the press legitimately interested in providing information about it."
¶The Press Ombudsman
¶1.28 The Press Ombudsman primarily receives and adjudicates on complaints. The Ombudsman
is appointed by the Press Council and reports to the Council on a monthly basis in respect of administrative matters.45 The Ombudsman is independent of the Council in the execution of his functions of investigation and adjudication, but his decisions can be appealed to the Council by either the complainant or the newspaper if they are dissatisfied.46 Professor Horgan stressed that his contract guarantees his independence from the Council and that the Council had recently agreed to amend its articles of association to give him greater independence. In particular the Ombudsman now has discretion to make decisions on whether someone is a person directly affected, and to rule out vexatious and frivolous complaints.47
¶Complaints
¶1.29 Complaints can only be made in respect of publications that are members of the Press Council
of Ireland. A complaint can relate to any article that breaches the Code of Practice or to the behaviour of a journalist that breaches the Code.48
¶1.30 Complainants are expected to go in the first instance to the publisher concerned, and the
Ombudsman will only consider complaints if the complainant has not received a satisfactory reply within two weeks.49 Professor Horgan told the Inquiry that he had:
"got a very severe telling off, which I think in the circumstances was quite justified, from the editor of the newspaper concerned….."
when he had, on one occasion taken a compliant directly at the request of the complainant who had been too fearful to confront the newspaper itself.50
¶1.31 Complainants are free to take their cases to court in advance of, alongside or after a case
1715is considered by the Ombudsman. The Ombudsman will not consider a case while it is before a court, but will suspend consideration of the complaint until legal proceedings have concluded.51 Professor Horgan could only recall one example of a complainant having taken legal action in respect of a matter which had already been adjudicated by him.52
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¶Process 1.32 The Ombudsman will generally carry out conciliation and reach conclusions on the basis
of documentation alone, although there is also provision for face-to-face mediation, which may be used more often in future.53 All decisions, whether by the Press Ombudsman or, on appeal, by the Press Council, are published to the interested parties and on the Press Council/ Ombudsman website.54 An annual report is published setting out the data and the approach taken to key issues.
¶Volume and results 1.33 In the four years of its operation the Irish Press Ombudsman has received on average between
340-350 complaints per year. This is roughly analogous, in proportion to population, to the number received by the PCC. There is, however, one striking difference between the outcomes from the Irish Ombudsman and those from the PCC. The Irish Press Ombudsman has reached a decision on nearly 12% of the complaints brought to it over its four year lifetime, which compares to substantially less then 1% of complaints to reach adjudication with the PCC.55 In 2010 and 2011 around two thirds of the decisions of the Press Ombudsman have included a finding that the code was breached, with sufficient remedial action already having been taken by the publisher in up to half of those cases.56 Comparatively few cases are conciliated, with only 19 (6% and 5.5% respectively) conciliated in each of 2010 and 2011.57
¶Appeals 1.34 Either party to a complaint can appeal the decision of the Press Ombudsman to the Press
Council. Professor Horgan told the Inquiry that there were a substantial number of appeals in the early years but that only very few appeals were upheld by the Press Council.58 The figures provided to the Inquiry show that 53% of the decisions taken by the Press Ombudsman have been appealed to the Council over the four years. There was a substantial dip in the level of appeals in 2009, but otherwise the proportion of decisions appealed has been over 50% in every year of the Press Ombudsman's operation. It is not obvious from the figures whether those appeals were by publishers or claimants and Professor Horgan told the Inquiry:59
"Initially quite a substantial number of my decisions would have been appealed, either by newspapers or by complainants, on the grounds that, well, it was free and, you know, why not have a second bite at the cherry?"
1716Very few of these appeals are upheld, however, with only three appeals having been upheld in four years (although some 12 appeals are described as being still outstanding).60
¶PART K | Regulatory Models for the Future
¶Standards
¶1.35 The Ombudsman deals with individual cases and has no remit to identify or respond to any
systemic issues which might become apparent from cases that he considers. Professor Horgan told us this would be a matter for the Press Council, on the basis of its own assessment of the issues before the Ombudsman and the decisions being reached. However, the Press Council does not have the power to conduct own-initiative investigations, and has no specific remit to tackle serious or systemic problems. Some efforts have been made to address systemic issues by, for example, sponsoring seminars on relevant matters.61
¶Sanctions
¶1.36 The only sanction available to the Press Ombudsman is the requirement for the newspaper
or magazine to publish a decision upholding a complaint.62 Professor Horgan told the Inquiry that all the major newspapers have been the subject of critical adverse findings in one form or another.63 Decisions of the Press Ombudsman also frequently include a correction of inaccurate facts.64 Detailed guidelines have been adopted by the Council in relation to the publication of a decision by the Press Ombudsman. In relation to prominence of publication these guidelines say:65
"(3) Those sections of decisions of the Press Ombudsman upholding a complaint should be published: (a) in full; (b) promptly; (c) on the same page as the original article, or further forward, subject to the exception at (6) below; (d) on the same day of the week as the original publication, (e) with similar prominence; (f) unedited; and (g) without editorial commentary by way of a headline or otherwise. In addition, each should carry, above the headline, a strap-line indicating that it is a decision of the Press Ombudsman. [….] (6) Where a complaint has been upheld in relation to an article published on the front page of a publication, the decision should be published with due prominence on one of the first four editorial pages."
¶UK titles as members
¶1.37 Professor Horgan told the Inquiry that UK titles accounted for 30% of membership of the
Council, but were responsible for around 22% of the complaints. These figures have to be viewed with caution, however, as they make no allowance for circulation figures or other differences between titles.66 In respect of the types of complaint that were received about UK titles and Irish titles, Professor Horgan said:67
1717"There's absolutely no discernable differentiation between the basis of the complaints against indigenous publications and those against UK-based publications."
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Professor Horgan went on to say that he had no complaints at all about the cooperation of any of the publications with the Ombudsman.68
- Other models of press regulation: Europe and beyond 2.1 In this section I consider systems of press regulation operated in Europe and elsewhere;
whether they are comparable to conditions in the UK and whether there are lessons that might be learnt and applied. It is important to start by noting that, while there may be similarities between systems of press regulation, no two systems are the same and there are important differences.
¶2.2 While all of those countries in consideration here operate systems of self-regulation, they
differ from the PCC in many ways. In some cases, notably Denmark, Sweden, Finland and Germany, there is some form of involvement by government, either through statute or because of financial support; in the case of France, the impact of legislation is very different to the model in the UK and has real impacts upon the functioning of the press in that country.
¶2.3 Most of the comparative European countries operate a form of self-regulation through a Press
Council, but also in some cases a Press Ombudsman (notably in Sweden). Unsurprisingly, the majority of the Press Councils operating in Europe and internationally, have been established solely with the printed press in mind. The development of new media, such as online publications and micro-blogging sites, have created opportunities for Press Councils to review existing frameworks, in order to consider options for incorporating new media platforms into their regulatory structure. This has included consideration of how to encourage membership, as well as how to meet the expectations for new media platforms and additional sources of funding for the system of regulation.69 By way of example, Denmark operates a 'polluter pays' policy for online members who have joined the Press Council. However, this is regarded as a temporary measure, as no official funding mechanism has yet been developed.70 Online and the self-regulatory settlement with online publishers is considered as and where appropriate in this section.
¶2.4 This section will also look at the composition of the Press Council Boards, as well as sources of
funding for the industry; both are important variables. The German Press Council for example is co-funded by the German Government. This system has not led to statutory regulation; neither has it been suggested that the Government exerts a deleterious influence simply because of the public funding. In her extremely well informed evidence to the Inquiry, Lara Fielden, a Visiting Fellow at the Reuters Institute for the Study of Journalism, has suggested that, although many of the European Press Councils profess to focus on the embedding and maintenance of journalistic standards, in practice this role is limited and most Press Councils are reactive and complaints driven instead.71
¶2.5 I will first consider the Scandinavian countries and thereafter Germany, France and the
1718Netherlands. I will then pass on briefly to review the situation in both the United States and China.
¶PART K | Regulatory Models for the Future
¶Denmark, Sweden and Finland
historically prided itself on the publication of information to high standards of accuracy, and within the boundaries set by a clear journalistic code. In each of the Scandinavian countries, the respective Press Council has powers to raise monetary contributions and, if an article is found to breach the code, to mandate the publication of the fact of a breach along with an apology. Furthermore, in Denmark, the Press Council additionally has the ability (rarely used) to fine or imprison an editor-in-chief who fails to comply with a publication of a Council adjudication.72 As to the relevance of rights of individuals, the Swedish Code of Standards includes the clause that journalists should:73
"Refrain from publicity which could violate the privacy of individuals, unless the public interest obviously demands public scrutiny".
Ms Fielden explained that the tabloid press in the Scandinavian countries had become increasingly comfortable with reporting on the private lives of politicians and others.74
¶2.7 Significantly, there are no press laws in place, nor specific legislation relating to the regulation
of the printed press, in Denmark, Sweden or Finland. However, contrary to assertions made in evidence and in public over the course of this Inquiry, there are elements of governmental involvement that can be found in the systems of press self-regulation operated in these Scandinavian countries. For example, and most notably, the Danish Press Council is established in statute, pursuant to the Danish Media Liability Act 1998, albeit that other elements of the system are self-regulatory particularly in terms of handling adjudications, the composition of the Press Council Board and the exercise of Council responsibilities. Under the terms of the Act, all publications which are in printed circulation more than twice a year, as well as holders of broadcast licences, are subject to regulation by the Danish Press Council. The Council also deals with complaints across all media platforms, including online media, provided (in the case of online publishers) that these organisations are registered with the Council.
¶2.8 Ms Fielden has explained that registration in Scandinavia is the expectation and is not perceived
1719as a form of licensing.75 Indeed, it is compulsory for any publisher seeking to participate in the self-regulatory system in Denmark, Sweden and Finland. The procedure of registering an editor-in-chief responsible for the publication is representative of the Scandinavian approach to responsible and accurate journalism.
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¶Denmark 2.9 Any journalist, or individual who imparts news in some way, whether through printed media
or online, is protected under the Danish Press Council's professional umbrella. The benefits of membership of the Council include access to privileges in law such as the protection of journalists' sources. This has been the incentive for many online publishers to join the Council on a voluntary basis.76 They have the ability to differentiate themselves from other online media who are not regulated by the Council. Online publishers are expected to contribute to the industry funding of the Press Council if they are affiliates of existing members (such as the online presence of a broadcaster or a printed newspaper). However, purely online-only outlets are not expected to contribute. This is partly due to the non-existence of a funding mechanism and is compensated by the Danish Press Council operating the 'polluter pays' policy, which is applied if an online member breaches the Code.77
¶2.10 It is noteworthy that, in similar fashion to the PCC, the Danish Press Council does not accept
third party complaints and deals with only those individuals who have been directly affected by press misreporting.
¶2.11 One of the primary roles of the Danish Press Council is the duty to enforce a right of reply
(albeit limited to specific factual inaccuracy). This power is enacted in statute under the Danish Media Liability Act 1998, and is procedurally different to the remedy obtainable from the court,78 and applies to both newspapers and broadcasters.79 Save for this and for the penal consequences visited on the editor-in-chief for failure to publish adjudications by the Press Council, there are no other enforceable rights under the Act. Like the Press Councils in Sweden and Finland, the Danish Press Council does not have the power to award compensation or to impose financial penalties.
¶2.12 Although the Danish Press Council is set up in statute, it is still at a fundamental level self-
regulatory and is regarded as such by its members. The eight members of the Council are appointed for their industry expertise. Historically, a member of the Danish Supreme Court has always been appointed as the Chair of the Council and a lawyer has held the position of Vice- Chair. The remainder of the Council consists of industry members, who are either journalists or editorial management, or independent public members; each is equally represented with two positions on the panel.
¶2.13 Although the system operated in Denmark has its benefits, it has come under parliamentary
scrutiny, in particular for the placement of apologies and corrections.80 According to Ms Fielden, publications are:81
"…still, even within this co-regulatory framework, burying publication of an adjudication on sort of page 54".
1720In her evidence she highlighted the different approach of publications towards 'regulation' and noted the distinction between two media camps: those who are found in breach and are
¶PART K | Regulatory Models for the Future
ordered to comply with adjudications by the Danish Press Council; and those who voluntarily choose to comply with regulation in order to benefit from the protections that membership of the Press Council offers.
¶Sweden
¶2.14 In Sweden, the press and press freedom are specifically protected by two of Sweden's four
constitutional laws. These function to protect the freedom of speech (Freedom of the Press Act 1991) and the freedom of the Swedish press (Freedom of the Press Act 1949). These freedoms apply to any individual who has registered for authorisation to publish and can include private individuals such as online bloggers. Both Acts guarantee a ban on censorship, the protection for anonymous sources and the right of public access to documents held by Swedish authorities.82
¶2.15 Press standards in Sweden are upheld through the Swedish Press Council. Membership is
voluntary and not backed by legislation, unlike in Denmark. Newspapers and print publications are authorised to publish as members of either the Swedish Newspaper Publishers' Association, the Magazine Publishers' Association, the Swedish Union of Journalists, or the National Press Club. There are no restrictions on who can apply for a licence through the Swedish Press Council. These organisations collectively finance the system of self-regulation, and also set the Code of Ethics for the printed media (and broadcasting) in Sweden.
¶2.16 In Sweden, the editor-in-chief of a print publication is legally responsible for all content
published by that title and is answerable to the Press Council Board. There are a total of 18 members of the Press Council Board. In similar fashion to Denmark, the Chair and three Vice-Chairs are members of the Swedish Supreme Court. The remaining members are representatives from the four associations responsible for funding the Press Council, as well as three representatives of the general public who are without affiliation to the press. This composition of the Board is seen as a way of underpinning the independence of the system of self-regulation in a country that has historically esteemed the freedom of the press and sought to protect it in law.83
¶2.17 Sweden also operates a Press Ombudsman whose role is to investigate complaints, provide
information and advice to the public and contribute to the development of press standards. Both the Press Council and the Ombudsman deal with the online versions of printed newspapers and magazines. The Press Ombudsman is the first point of contact for any complainant who has a personal interest in press misreporting or who has been directly affected by it. As such, third party complaints are not accepted by the Swedish Ombudsman. The Press Ombudsman does not act as a mediator but rather makes decisions on whether a complaint can be accepted and passed to the Council for adjudication. If the Press Ombudsman decides a complaint does not warrant formal criticism of the title in question, the complainant can appeal directly to the Press Council. There are also no restrictions to prevent a complainant from taking the grievance to court after it has been considered by the Press Ombudsman and the Press Council.
¶2.18 The Press Ombudsman is appointed by a special committee which consists of the Chief
Parliamentary Ombudsman, the Chair of the Swedish Bar Association and the Chair of the National Press Club. The length of time taken for an adjudication by the Press Council can be a further six or seven months after the Ombudsman has considered a submitted complaint
-
¶
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¶Advisory note provided by the British Embassy in Sweden
1721¶Chapter 5 | International Comparators
(which can last itself three to four months). The remedy for such complaints is the right to reply or the publication of a correction.
¶2.19 In contrast to the UK and Denmark, however, the Swedish Press Council operates a system
whereby titles are expected to contribute towards costs after a breach of the code. Whereas only online operators in Denmark are ordered to pay a levy towards the funding of the Council if they are in breach of the code, in Sweden, anyone who breaches the code is required to pay a 'penalty' towards the fund. It is estimated that this form of 'polluter pays' policy contributes approximately 20% of the Press Council's funding.84
¶Finland 2.20 Finland's printed press is regulated by The Council for Mass Media (CMM), established by
publishers and journalists in 1968. It is the main body responsible for the self-regulation of Finland's printed press and broadcasters. It is also the only self-regulatory system in the Scandinavian countries that encompasses all media platforms, including online journalism. Under Finnish Law, the freedom of speech is protected through the Exercise of Freedom of Expression in Mass Media Act 2003.85 Through this Act, publications are obliged to provide a public right of reply as well as the duty to correct factual inaccuracies. In similar requirements to Sweden, each publication must nominate an editor who holds the responsibility for all the published content of that publication.
¶2.21 The CMM is responsible for issuing Guidelines for Journalists, which establishes professional
conduct guidelines across cross-media platforms. Membership to the CMM is voluntary, although it is perhaps noteworthy that journalists who have affiliated membership to the Council commit themselves to advancing and upholding the principles set out in the Guidelines for Journalists. Dr Riitta Ollila, a member of the CMM has argued that the Council:86 "…does not act as a mediator between editors and audience but as a master of the code making remarks on the press of their errors." Although the CMM has no legal jurisdiction over the regulation of the press, its position overseeing journalistic standards is generally accepted. The CMM receives state funding from the Finnish Government equivalent to 30% of the Council's budget.
¶2.22 In contrast to Denmark, Sweden and indeed effective practice in the UK, the CMM is open
to third party complainants. Complaints can be received from any member of public who considers that there has been a breach of good practice or violation of the Guidelines for Journalists. Any title or broadcaster found in breach of good practice is compelled by the CMM to publish a notice issued by the Council within a certain timeframe. Similarly to the PCC, the CMM will not rule on an issue or consider a complaint where legal action is being taken concurrently. The Council can only rule on complaints brought to the Council's attention within three months of publication.
¶2.23 The CMM is comprised of eight representatives of the industry and (including the Chair)
1722four public members. Up until 2007, only a current or serving media professional could be appointed to Chair of the CMM. Changes have since been made which now allow a former
¶PART K | Regulatory Models for the Future
editor to assume the post of Chair of the CMM. These adjustments might have been to improve the operation of the Council, given the rate at which respective Chairs of the CMM have resigned.87
¶2.24 The membership of Press Councils in Scandinavia has historically been high; it appears that
this is largely due to the reputational benefits of membership and the accountability that is perceived to be afforded by membership of the relevant Council. This is also shown through the increasingly high rate of membership by online media outlets, and the online platforms of traditional media. In addition, it appears to be the case that, in the Scandinavian countries, there is a culture of commitment to (and indeed pride in) high journalistic standards. Therefore the question of membership, irrespective of the cost of that membership to an individual publication, is not an issue for consideration by media bodies in Scandinavia. As has been noted, the only exception is Denmark, where any publication that meets the criteria defined by the Media Liability Act, is subjected to compulsory regulation by the Danish Press Council.
¶Germany
¶2.25 It has been argued by some commentators that the German Press Council operates the
purest form of press self-regulation in Europe. In Germany, the press are regulated only by the press and are only subject to restrictions within the German Basic Law (Grundgesetz). The Press Council was established in 1956 and consists of members from industry organisations and the press trade unions. The Council has 28 industry members and the Chairmanship of the Council rotates between the representatives of the different industry organisations. Press behaviour and standards are set out in the German Press Code, first developed by the Press Council in 1973, which provides guidelines under which journalists should operate. In 2009, the Press Council expanded their remit to include online newspapers. The Press Council relies on Government funding for its operations (although there is a stipulation that the funding should not exceed 49% of the Press Council's total revenue).88 Other than providing monetary support to the Council, the Government has no powers or influence over the day-to-day operations of the Council.
¶2.26 Any member of the general public may make a complaint directly to the Council. Complainants
do not have to waive their rights to initiate legal proceedings if they submit a complaint to the Press Council. If the Press Council Board supports a public complaint, then the newspaper in question is expected to publish the Press Council's ruling. This public reprimand is a voluntary undertaking by the title in breach, rather than an order dictated by law or mandated as a condition of membership of the Council. Ms Fielden has noted that some 90% of German publishers have signed up to the voluntary undertaking, although one major publisher, the Bauer Media Group,89 has not renewed its declaration.90 Whilst the Press Council can request that these reprimands are published, as with the PCC, it cannot determine the prominence given to the publication of the decision.
1723to the publication of public reprimands. The newspaper Bild, the best-selling German tabloid, has questioned decisions made by the Press Council. By way of example, a published Press Council ruling on 29 November 2007 was printed by the paper in question not as an
¶Chapter 5 | International Comparators
adjudication but, rather, as a criticism of that adjudication.91 The problem of compliance is ongoing and has led to delays in the publication of apologies. This has led to the reputation of the German Press Council being discredited and has damaged the public perception of its general credibility as a self-regulating body.
¶2.28 The approach of the German press is perhaps more aggressive than that in Scandinavia,
although it may appear tame in comparison to standards in the UK. Its behaviour has been described best as a "balancing act".92 Significantly, there is a culture in the German press (notably absent from the UK press) of titles publicly holding each other to account. In this respect, Bildblog is an example of an online media watchdog, which was originally established to examine the coverage by the Bild newspaper.93 Bild has also been criticised by its readers, notably for its coverage in 2010 of a number of deaths at a music festival in Duisburg.94 The title was accused of exaggerating reports of the deaths and came under intense scrutiny from the public and industry members alike. The German Press Council received a large number of complaints from readers, via traditional methods such as letters to the editor, as well as micro-blogging through channels such as Twitter. It has been argued that this event, and the resultant response, has led journalists to reflect on their standards of reporting for the future.
¶France 2.29 The system of press regulation in France is different to the countries so far outlined. In place
of a Press Council, the press in France are regulated by the existing body of French law. Trade unions and professional associations, such as the Syndicat National des Journalistes and the Association des Journalistes Républicains Francais, are responsible for maintaining standards of journalism across the printed press. As a consequence, the development of a code of standards applicable to the industry has been problematic. Instead, both the Unions and professional associations have encouraged the appointment of ombudsmen at some newspaper titles. The first appeared in 1994 at Le Monde, although this has not been popular across the majority of the printed press.
¶2.30 The Direction du Départment des Médias et des Industries Culturelles,95 is responsible for the
development of Government policy in relation to the media and plurality. It is also responsible for providing financial support to parts of the media, most of which is directed towards the printed press.
¶2.31 Efforts at creating a Press Council in France have been unsuccessful. The most recent attempt
1724in 2006 led to the establishment of the Association de prefiguration d'un Conseil de press,96 led by a group of French journalists, although it is unclear how far their efforts have led.97 It is likely that this is a consequence of lack of industry support.
¶PART K | Regulatory Models for the Future
¶2.32 The corollary to the informal systems of self-regulation in France is the application of civil
and criminal law. Although the freedom of the press and the freedom of speech are both constitutional principles, uniquely in Europe, privacy laws, in particular Article 9 of the Civil Code,98 are also applicable to the press. Intrusions into privacy, including the taking of photographs of individuals in a public place, are prohibited. Article 9 guarantees the protection of the citizen's private life, from which the right to one's image emanates. The Civil Code, however, is fluid in definition in relation to individuals who have a public profile and, in particular, those who hold public office. Under the constitutional guarantees of freedom of speech, French law allows for the publication of information on individuals in public office, as a consequence of their occupation or status. They are presumed to waive rights over the publication of their image, on condition that it is used to inform and not for commercial gain. In French civil law, an individual who feels that their image has been misused can request court action to prevent the attack (through detention, seizure of property, banning the publication, or public denunciation) or seek damages in compensation. In criminal law, invasion of one's privacy is punishable by a prison term of up to 12 months and a fine of up to €45,000.
¶2.33 Historically, the French press has been reluctant to publish stories on the private lives of
individuals. Perhaps the most famous example of this phenomenon was the refusal of the French press to publish stories about the extramarital affairs of the former President, François Mitterrand. Suffice to say that nothing was printed about President Mitterrand's second family, and it was only shortly before his death that the press revealed the facts. There has been a historical willingness to interpret privacy law broadly (and some may argue too broadly) and it has been argued that French privacy law is used to suppress information. However, increasingly French newspapers and, particularly, celebrity gossip magazines are challenging this traditional reluctance to publish content that may be regarded as private and such stories are increasingly the norm in France. The recent publication of the photographs of the Duchess of Cambridge may be part of this trend.99
¶Netherlands
¶2.34 Freedom of speech is set out in Article 7 of the Constitution of the Netherlands. The
Constitution also states that the Government has a duty to enable the media to freely exercise their profession without any form of undue influence or interference. This is realised through the Dutch Media Act 2008. Although the Act regulates only public broadcasters and cable operators in the Netherlands, it also ensures that newspapers and internet publications have rights to operate independently and free from Government interference.100 101
¶2.35 The Netherlands has operated a system of self-regulation for the last 50 years. The Netherlands
1725Union of Journalists founded the prototype of a Dutch Press Council in 1948; this functioned originally as a disciplinary body, before being reconstituted as the Raad van Tucht, the
¶Chapter 5 | International Comparators
Netherlands Press Council (NPC), in 1960.102 This Council describes journalism in the country as a completely free profession, where any individual can be considered a journalist and is not required to be professionally registered as such.
¶2.36 The NPC does not accept third party complaints. Complaints are only accepted from those
who have a direct interest and are affected by the issue and must also be related to a specific breach of the Code. It must concern the journalistic practice of either a professional journalist or someone who, on a regular basis and for remuneration, collaborates on the editorial content of a mass medium. The Council can only pass judgment and is unable to impose sanctions on titles in breach of appropriate journalistic practice. In the Netherlands, and much like the UK, a complainant's route to seeking compensation is through civil litigation.
¶2.37 The fundamental difference between the system of press self-regulation operated in the
Netherlands through the NPC and the PCC lies in the prominence accorded to publication of adjudications against titles in breach of the Netherlands guidelines for journalism. The adjudication summaries published by the NPC name and shame journalists who have breached terms on accuracy, or have been found to have crossed the limits of what it is acceptable to publish. These adjudications are published in full on the Press Council's website, as well as in the Dutch union of journalists' newspaper, which is widely read by people working in the industry. The decisions are also widely circulated through national news agencies and to other media organisations. This very public naming of titles in breach of the code is seen as a deterrent for poor journalistic behaviour.
¶2.38 Although the NPC cannot force a title to publish a correction, the majority of the media will
respect such a request from the Council and will comply. Some titles have decided not to publish the verdicts of complaints against them, such as De Telegraaf (the largest newspaper in the country) and NOVA, a current affairs programme on television, who announced that they would no longer cooperate with the NPC. Despite this, 80% of the NPC members have indicated that they would publish adjudications involving their titles.
¶2.39 The Chair of the Dutch Press Council has historically been appointed from the Dutch Judiciary.
The Chair is assisted by three Vice-Chairs, who are also drawn from the law. The remaining members of the Council comprise 13 industry members (including journalists) and 13 lay members.103 In recent years, steps have been taken to improve the effectiveness of the Council, including an internal review of systems and functions. Changes have included the appointment of five 'public members' drawn from the Dutch public at large.104 In order to implement improvements, the NPC has applied for additional financial support from the Dutch Government and has pushed for the adoption of a similar funding mechanism to that used in Germany. The review of systems and functions conducted by the NPC also considered other self regulatory models, including the PCC.
¶2.40 Before concluding this summary of the approach of other European countries, it is worth
1726adding that, in her evidence, Ms Fielden observed that Press Councils in Europe are now making concerted efforts to prove to readers that they are concerned with maintaining standards. She gave the example of a judgment by the Swedish Press Council, which ordered
¶PART K | Regulatory Models for the Future
the publication of a decision, which the newspaper title ran on the front page of its publication, as a way of setting the bar:105 "…a Swedish paper that had got something very wrong had been censured by the Press Council and ordered to publish the Press Council decision, off its own bat published it on the front page, and the reason it did that was to say, 'This is our compact with you, the reader. We are different. We aspire to very high standards. When we get it wrong, we will tell you that we've got it wrong, very visibly so.'"
¶The United States
¶2.41 In some countries there are no systems of press regulation. The prime and only statutory
structure of the United States print newspaper industry is the First Amendment to the American Constitution, adopted in 1791.106 The First Amendment to the Constitution reads:107 "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." The First Amendment protects both the freedom of speech and the freedom of the press, although there remain certain statutory limitations relating to defamation and privacy,108 as well as certain forms of state censorship, which exempt some areas of free speech from the protections of the First Amendment.109
¶2.42 By way of example, there are restrictions in both Federal and State law in relation to obscene
images (which may be defined to cover material which would not be considered to offend obscenity laws in the UK); there is no equivalent to Page 3. Many US states seek to build on the existing Federal law and place restrictions on the possession, dissemination and sale of obscene material in public places, in particular those where minors may be present such as schools and libraries.
¶2.43 The Federal Communications Commission (FCC) is responsible for the regulation of
broadcasting across the fifty states and on an international scale.110 The remit of the FCC does not, however, include the regulation of the print media.
¶China
¶2.44 Some witnesses have suggested that any introduction of statute in relation to press standards
1727is tantamount to placing the press under state control. It may be of some benefit to turn very briefly to look at China and the regulation of print media in that country, if only to provide an example of the sort of statutory control of the press that gives rise to these concerns and identify the key features of that regulation to demonstrate how widely and dramatically it
¶Chapter 5 | International Comparators
differs from the type of underpinning statute that has been proposed by witnesses to the Inquiry.
¶2.45 Chinese publications are required under law to abide by a strict registration criteria as
well as to undergo a process of continual government approval, exercised by the General Administration of Press and Publications (GAPP). Individual publications are held accountable to the government by official sponsors, defined as a 'managing institution', which must be an institution recognised by the Chinese Communist Party or the government.111 The managing institution is responsible for the exercise of control over the publication and content published by it. Specifically, the managing institution should limit any negative coverage of the Chinese Government and the Chinese Communist Party. There are, by definition and in fact, no free or independent media outlets in China.
¶2.46 The regulation of the Chinese media by the government is not limited only to the domestic
market. Indeed, the Chinese Government seeks to control the content of Chinese language newspapers published abroad. The Epoch Times is a Chinese newspaper founded in 2000 operated from the UK; it provides an interesting perspective on the reach of Chinese press regulation.112 Their submission to the Inquiry suggests that the influence of the Chinese Communist Party extends to the Chinese language print media in the UK and that this influence is exercised through the Chinese Embassy. They have said that the Embassy seeks to influence media outlets targeted at the Chinese community and has sought to discourage its circulation. The Director of the English edition, Sek Halu, has suggested that a number of retailers and supermarkets have refused to stock the Epoch Times because of its critical view of the CCP.113
- Reviews of press regulation: Australia and New
¶Zealand 3.1 The development of new media and, in particular, the convergence of delivery platforms
for content, has challenged existing models of press regulation, causing some regulators to review the extant regulatory frameworks to consider how best to respond to this changing environment and how new forms of content delivery might be incorporated into existing regulatory structures.
¶3.2 In Australia, the structures and functions of the existing Australian Press Council have recently
been considered as part of a wider review of press standards, in the context of the Independent Media Inquiry, otherwise known as the Finkelstein Inquiry. The Finkelstein Inquiry has fed into the wider Convergence Review, being conducted by the Australian Government, of regulation across media platforms in Australia and broader media policy. In New Zealand, the Law Commission has looked specifically at the privileges and benefits accorded to traditional media and have considered how these might be applied to new media.
¶K
1728¶PART K | Regulatory Models for the Future
¶Australian Independent Media Inquiry: the Finkelstein Report
¶3.3 The Independent Media Inquiry was established by the Australian Government on 14
September 2011. A former Justice of the Federal Court of Australia, Mr Ray Finkelstein QC, was appointed to conduct the Inquiry. The Independent Media Inquiry invited submissions from any person with an interest in the issue and held public hearings in Melbourne, Sydney and Perth during November and December 2011. In parallel to these hearings, the Chair of the Inquiry also invited selected individuals, organisations, trade associations and other interested parties to make formal submissions. Responses were received from a range of parties, including serving editors of Australia's major media outlets, former editors with experience of the news media industry, the current Chair of the Australian Press Council (as well as former Chairs), and academics specialising in media and regulation.
¶3.4 The timing of the Independent Media Inquiry has overlapped with the establishment of this
Inquiry. Although the former was not set up in response to any allegations of wrongdoing at News Limited (the Australian subsidiary of News Corp), or to investigate any press misconduct, it was nevertheless indirectly provoked by the allegations of phone hacking and corrupt payments at News International that led to this Inquiry.114
¶3.5 The Terms of Reference for the Independent Media Inquiry focussed on the efficacy of existing
codes of conduct governing media practice in Australia, particularly the likely impact on these of the growing convergence of print media and digital and online platforms. Mr Finkelstein was also required to investigate:115
"The impact of this technological change on the business model that has supported the investment by traditional media organisations in quality journalism and the production of news, and how such activities can be supported, and diversity enhanced, in the changed media environment; ways of substantially strengthening the independence and effectiveness of the Australian Press Council, including in relation to online publications, and with particular reference to the handling of complaints; and any related issues pertaining to the ability of the media to operate according to regulations and codes of practice, and in the public interest."
¶3.6 The Independent Media Inquiry concluded its review and reported to the Australian
1729Government on 28 February 2012. Mr Finkelstein recommended that the current Australian Press Council (APC) should be replaced by an independent body, the News Media Council (NMC).116 The role of the NMC would be to ensure that Australian news media operated in a more accountable manner to those who were the subject of press reporting, as well as to the general public at large. To enable the NMC to exercise this function, Mr Finkelstein argued that the NMC should have strengthened remedial powers to deal with complaints about the press. These proposed powers would be significantly greater than those available to the existing APC. Mr Finkelstein also proposed that the NMC should have powers to enforce a right of reply, the withdrawal of an article from further circulation, and the publication of apologies and Council adjudications (including the ability to control the size and prominence of these publications). These remedial powers are, according to Mr Finkelstein, necessary to preserve the integrity of the press.
¶Chapter 5 | International Comparators
¶3.7 The NMC would also be responsible for setting journalistic standards, in consultation with the
industry, and to handle complaints across all media platforms (specifically print, online, radio and television). Mr Finkelstein proposed a greater level of funding from the Government for the body which would replace the current levy system. He argued that this would remove a current burden on the print industry but would also address the issue of the independence of the NMC from the industry.
¶3.8 Perhaps more significantly, and indeed a change of greater significance, Mr Finkelstein also
proposed that a legal requirement should be established to grant powers to the NMC to take legal action against any media outlet that refused to comply with the requirements set by the NMC. By way of example, if a publication refused to publish an adjudication issued by the NMC, the Council or the complainant would have the right to apply for a court order compelling compliance from the publication. Any failure by the publication to comply with the court order would be subject to existing legal processes. It is this particular aspect of Mr Finkelstein's proposals that has been the subject of considerable and heated media criticism.
¶3.9 In his concluding remarks, Mr Finkelstein drew comparisons between his review and this
Inquiry. He acknowledged that, although the Independent Media Inquiry was not established in response to phone hacking in Australia, they shared the historical experience of a Press Council that had limited powers as a self-regulatory body and was unable to fully bring the press to account in the public eye. Mr Finkelstein has also speculated, in relation to this Inquiry, that:117
"Looking at the matter from afar, it would not be surprising if statutory regulation were top of the list."
¶Public and Industry Response to the Finkelstein Report 3.10 It would be an understatement to observe that Mr Finkelstein's recommendations have not
gone unchallenged by the Australian press. Rather, the Report has led to a wide-ranging and, at times, heated debate as to the nature of press freedom in Australia.118 News Limited's Chief Executive, Kim Williams, called the Independent Media Inquiry's report "too draconian" and argued that there was little value in replacing the existing Australian Press Council (APC) with the NMC as proposed by Mr Finkelstein.119 Mr Williams went further and, speaking at the Pacific Area Newspaper Publishers' Association forum in Sydney, suggested that the Independent Media Inquiry was established by the minority Australian Labor Party Government primarily to attack News Limited, as a direct response to the coverage the Government was receiving in his company's newspapers.120
¶3.11 Bob Cronin, group editor-in-chief of West Australian Newspapers, also expressed his opposition
1730to Mr Finkelstein's proposals. He heavily criticised the element of increased oversight of the new Council, as well as the powers of a Government-appointed regulator to control what the media was able to publish. He argued that the proposals were:121
¶PART K | Regulatory Models for the Future
¶"…the most outrageous assault on our democracy in the history of the media."
¶3.12 A different perspective was provided by the Chair of the current APC, Professor Julian Disney,
who has continued to argue for the improvement of resources available to the APC to ensure that it was able to fulfil its complaints-handling responsibilities. He stated that:122
"…resources are hopelessly inadequate and they were even before our number of complaints doubled so it is really just to carry out the responsibilities that we are meant to have and that people expect us to do."
¶3.13 In this respect, Professor Disney agreed with many of the central recommendations of Mr
Finkelstein's report which, he suggested, clearly identified the fundamental flaws in the current system of complaints handling through the APC. However, Professor Disney has strongly disagreed with the two particular elements of Mr Finkelstein's proposals.123 He also drew attention to the absence of any coverage by local newspapers of the APC's opinions of Mr Finkelstein's report.124 He stated that no Sydney or Melbourne paper had reported the views of the APC, despite the body being the main focus of the report, or their response to the proposals. He argued that this was a striking example of the lack of balanced coverage that existed in the Australian press.
¶3.14 Some commentators have chosen not to focus on the detail of the proposals but have instead
considered how the recommendations might be applied in practice, particularly as that Mr Finkelstein concluded the NMC should not be established by statute. Echoing the views of a number of Australian commentators, the former financial journalist Jim Parker, who currently writes for the respected Australian media blog, The Failed Estate,125 argued that, without a statutory backdrop, the powers of the proposed NMC would be without effect.126
¶Australian Convergence Review
¶3.15 The Convergence Review was established in early 2011 by the Australian Government to
examine the current system of media regulation in the light of the challenges posed by the conversion of services and the proliferation of media platforms. Specifically, the Convergence Review sought to establish whether a single model could be applied across the media.
¶3.16 This review was led by the Convergence Review Committee, chaired by Glen Boreham, former
Managing Director of IBM Australia and New Zealand.127 The Committee was also tasked with looking at how the recommendations of Mr Finkelstein's Independent Media Inquiry might be incorporated into media regulation.128 The Committee reported to the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, on 30 March 2012.
¶3.17 The Convergence Review Committee recommended that any media title, regardless of the platform on which their content was delivered, should be subjected to certain restrictions by a
1731¶Chapter 5 | International Comparators
single regulator.129 In this respect, the Committee proposed that the licensing of broadcasting services should cease, and the regulation of the media should be undertaken by a single statutory body which would replace the existing Australian Communications and Media Authority (ACMA). The new regulator would be responsible for any media enterprise, across all platforms, defined as 'content service enterprises'; this means organisations that:130
"…have control over the professional content they deliver; have a large number of Australian users of that content; and have a high level of revenue derived from supply that professional content to Australians."
¶3.18 In this regard, the Convergence Review recommended that thresholds should be defined in
relation to the annual revenue of a concern, as well as the number of readers (or 'hits') any media title attracts within the Australian market.131 By setting these thresholds, Australia's 15 largest media companies would be subject to regulation by the new body. Ms Fielden noted in her evidence to the Inquiry that online operator, Google, would be exempt from this definition, despite the company's reach within the Australian media market. This was due to the stipulation that saw Google's revenue understood in terms of professionally produced material, rather than as a content service enterprise.132
¶3.19 The Committee's proposals did not, however, take forward the recommendation of the
Independent Media Inquiry to establish the new News Media Council. Rather, it proposed an industry-led body for maintaining news standards across all media and communications, in the stead of the Government-appointed regulator proposed by Mr Finkelstein. This was in addition to the recommendation for a statutory regulator to replace the ACMA.
¶3.20 At the time of writing, the Australian Government was still considering the recommendations
of both Committees. However, whatever the eventual Government response, it will no doubt alter the regulatory landscape of Australia in relation to the convergence of print, broadcast and online media.
¶Public and Industry Response to the Convergence Review 3.21 There has been a mixed response from the industry to the recommendations of the
1732Convergence Review. Although these recommendations have not generated the same levels of controversy and debate as those put forward by Mr Finkelstein, a number of commentators saw the proposals as part of a continued, and in some cases deliberate, erosion of the freedom of the press.133 In her evidence, Ms Fielden drew the attention of the Inquiry to the response of some parts of the Australian press, which have argued that the Convergence Review was purposefully established in order to regulate the fifteen companies which would fall under the definition of 'content service enterprises', and has been otherwise unconcerned with other areas of media regulation that ought to have been considered more fully by the review. Ms Fielden disputed the validity of this assessment of the Convergence Review.134
¶PART K | Regulatory Models for the Future
¶3.22 Ms Fielden also told the Inquiry of the recent changes implemented to improve the function
and practice of the Australian Press Council (APC), introduced in response both to the Convergence Review and the allegations of wrongdoing, in particular the allegations of phone hacking that led to the establishment of this Inquiry. She said that the Council had actively responded to the calls for reform of press regulation, and had proactively sought to consult the Australian public in order to determine how best to hold the press to account. This had led the APC consciously to shift its focus of activity to the maintenance and improvement of press standards, ensuring the fair balance of the Journalists' Code and the mediation of complaints. The APC had appointed an advisory board tasked with monitoring the coverage by news media of issues which were likely to give rise to a substantial number of complaints.135
¶New Zealand Law Commission Review
¶3.23 The New Zealand Law Commission Review examined the legal and regulatory environment
in which the media operated in New Zealand and, specifically, the privileges that existed for print media and whether these should be extended to their online equivalents. Such privileges included legal rights to the protection of sources and others relating to court proceedings. The Review tried to set a framework which defined who should benefit from these privileges and how. The Terms of Reference were to examine the following questions:136
"how to define 'news media' for the purposes of the law; whether, and to what extent, the jurisdiction of the Broadcasting Standards Authority and/or the Press Council should be extended to cover currently unregulated news media and, if so, what legislative changes would be required to achieve this end, and; whether the existing criminal and civil remedies for wrongs such as defamation, harassment, breach of confidence and privacy are effective in the new media environment and, if not, whether alternative remedies may be available."
¶3.24 The New Zealand Law Commission provided a list of preliminary proposals, published in
December 2011, and has since invited submissions in relation to these proposals. The proposals included the suggestion for a statutory definition of 'news media' (to include new media), specifically for the purposes of defining which publications should be entitled to the rights of the legal privileges and exemptions. The Review also proposed the establishment of a new independent regulator, responsible for all news media, regardless of the format or delivery platform. In relation to the existing civil remedies for victims of mistreatment by the press or other media, the Review proposed the creation of a Communications Tribunal, which would handle complaints in the context of the changing publishing environment.
¶3.25 The Law Commission's preliminary Report was published to encourage wider public debate,
1733as well as to generate feedback on the scale and scope of initial solutions. By way of example, the Law Commission produced two options, for consideration by the public and stakeholders, as to whether membership of the new body should be enforced by statute or remain voluntary. The consultation period ran from December 2011 to March 2012.137 The paper and accompanying proposals are currently being considered by the New Zealand Government which, similarly to the Australian Convergence Review, is due to report in Autumn 2012.138
¶Chapter 5 | International Comparators
¶Concluding remarks 3.26 The alternative models of press regulation, as well as the other recent international reviews,
have provided helpful examples of the different possible solutions for this Inquiry to consider. It is possible, however, to argue that there has been no compelling evidence to demonstrate that any of these models, or combinations of them, would function better than any others.
¶3.27 It is clear, however, that all the structures considered in this Chapter are embedded in the
social, cultural and historical functions of the media in each country, and are not necessarily ideal structures to apply to the UK. It is also worth noting how many countries are currently considering the impact of the evolution of digital platforms, as we have seen in Scandinavia and further afield in Australia and New Zealand. This development of online media content, as well as methods of delivery, has brought the regulation of print media into a whole new context. Although some of the practices revealed by the Inquiry may not be faced by other countries, the overarching questions being addressed are not unique; but neither is it possible to pretend that any other system, inquiry or review has successfully developed an ideal solution to the problems being faced.
¶K
1734Chapter 6 Techniques of Regulation
- Introduction
¶1.1 Part K, Chapter 1 sets out the criteria that I consider need to be met by any 'new more
effective regulatory regime'. Chapters 2-4 look at specific proposals that have been made for a new approach to regulation of press standards, and Chapter 5 looks at the way that other countries deal with press standards. This Chapter starts from a rather different position and looks at the theoretical framework for regulation. This does not purport to be a definitive text on the theory of regulation; rather it is a brief look at the different ways in which regulation can be achieved and the circumstances that are conducive to different approaches to regulation being effective.
- Regulatory options
¶2.1 The Terms of Reference talk about making recommendations for a new and more effective
policy and regulatory regime and that it precisely what this Report aims to do. There has been a lot of talk in the media and elsewhere about the regulation of the press versus self- regulation of the press as though that were a binary choice. That is not an interpretation that I accept. It seems to me that there is a wide spectrum of action that can be undertaken, and that, far from a binary option there is a continuum from no regulation at all, through to full statutory regulation: a solution can be accessed at any one of a number of points on that range. This chapter considers, from a theoretical perspective, the various policy and regulatory tools that are available for use and looks at the pros and cons of each, though I must reiterate that this is a partial review of the options, not a thorough analysis.
¶2.2 At the opening of the Inquiry a number of briefing sessions were held that dealt with the
factual background against which the issues under consideration by the Inquiry should be seen. At one of those briefings Donald McCrae, an expert in regulatory theory, introduced a model for thinking about regulatory propositions.1 Specifically, he categorised the potential approaches to changing behaviour under four headings: engage, enable, encourage and exemplify. At the same time the Inquiry heard from a number of regulators about different regulatory regimes and about the different regulatory regimes for the press and the media in other countries.
¶2.3 This Chapter starts by considering different ways of securing behavioural outcomes, drawing
on examples where that is helpful. This is a technical consideration of potential models and how they might operate.
¶2.4 The Department for Business Innovation and Skills (BIS) sets out general principles of regulation,
which requires that any regulation and enforcement framework should be capable of being implemented in a fashion which is demonstrably proportionate, accountable, consistent, transparent, and targeted.2
¶2.5 There are various ways of categorising regulatory models. One way of doing so is to look at the level of external intervention. This can be cut at almost any level of specificity but we K
¶Donald McCrae presentation, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Donald-Macrae1.ppt
¶BIS, Principles of Regulation, http://www.bis.gov.uk/policies/bre/principles-of-regulation
1735¶Chapter 6 | Techniques of Regulation
have identified four levels which we go on to consider in more detail, namely no regulation, self-regulation, co-regulation and, finally, statutory regulation.
¶No regulation 2.6 This concept needs some clarification. For most people 'no regulation' would mean no
specific regulation or laws relating to the press. However at present the media are bound by the law as it applies to the rest of us. This includes many laws that could impact on the sorts of behaviour in the press that have been complained of in evidence to the Inquiry, such as Regulation of Investigatory Powers Act 2000 (RIPA), under which the prosecutions for phone hacking have been made, the Bribery Act 2010, the Fraud Act 2006, the Protection from Harassment Act 1997 etc. Critically, the Human Rights Act 1998 provides rights both to a private life and to freedom of expression. There are additional laws relating to press reporting on criminal cases. The media are also subject to the Data Protection Act 1998, although there is a specific public interest protection under section 32 for processing data with a view to publication for journalistic purposes.
¶2.7 So the concept of 'no regulation' should not necessarily be considered to mean that journalists would be able to operate unfettered by legal constraints.
¶Pros and cons 2.8 The principles of better regulation dictate that regulation should be 'proportionate' – i.e. no
more than is required to achieve the policy objective. Clearly if it is possible to deliver the desired outcome in the absence of any regulation then no regulation should be introduced. In practice this means that 'no regulation' is an appropriate response when the market is capable of delivering the required outcome without intervention. The very fact that this Inquiry had to be established, in the wake of discoveries of serious wrongdoing and criminality, in at least one national newspaper, is sufficient demonstration that the market alone will not provide public protection from criminal acts which Parliament and the public have regarded with abhorrence, and which even those responsible for committing them have not sought to justify in this Inquiry.
¶2.9 Furthermore, the law has to be accessible for if there is limited prospect of detecting criminal
behaviour or being able to afford civil proceedings, to that extent, there is no sanction (or, in the absence of ethical standards) disincentive to comply with the law when to do otherwise has potential advantages. Thus, if there is a good prospect of being able, say, to intercept mobile phone communications without being caught (because of the care taken to avoid alerting the victim and, in the absence of a victim, law enforcement will not be engaged) and the advantages to be obtained from listening to intercepted messages are sufficiently beneficial, the fact that others in the market do not engage in that behaviour will not necessarily prevent it.
¶Self regulation 2.10 There are many different self-regulatory tools. This section considers self regulation in the
1736purest sense, where activity is entirely voluntary, where there is no constraint or oversight from outside of those self-regulating as to the standards that are set or monitoring or enforcement of compliance with them. There are a number of tools that could potentially fall K within the definition of self-regulation.
¶PART K | Regulatory Models for the Future
¶Internal governance
¶2.11 The first is referred to as 'internal governance'; these are the methods that organisations use
to establish their own cultures and control behaviour within their own organisations. What happens inside a company is a matter of culture, example, practice and control, and these internal governance practices and procedures are likely to have the most significant impact on the ethical standards applied by their employees and contractors.
¶2.12 The Inquiry has been provided with extensive evidence from newspapers about systems that
they have in place to ensure compliance with ethical standards. Internal governance is likely to be very effective in circumstances where it is genuinely in the interest of the organisation to secure compliance with the standards. It is less likely to be effective if there are competing incentives (for example if the financial benefits of breaching the standards are significant). To be effective, internal governance systems must be consistent, must be seen to be enforced and must be seen to be exemplified throughout the organisation.
¶2.13 The Inquiry has also seen evidence3 of many excellent systems of internal governance in
place in both national and regional newspapers. It is noticeable that the formal governance arrangements in the News of the World, prior to its closure, were effectively the same as those for other titles in the News International Group, which are themselves similar to the best examples of internal governance arrangements that we have seen. I draw two lessons from this. First, internal governance can have an important role to play but, second, formal internal governance procedures are not in themselves sufficient. It should also be noted that, whereas the detail of day to day governance processes are very much a matter for companies individually, governance is not itself a purely self-regulatory matter as some elements of corporate governance are dictated by company law, or stock market listing requirements. The extent to which these rules impact on companies running newspapers is, of course, affected by the different ownership structures which they enjoy.
¶Industry standards
¶2.14 The second purely self-regulatory tool is industry standards. With a purely self-regulatory
industry standards model there is no compulsion for anyone to be a member, no oversight from outside the membership of the standards set or enforcement procedures, and no fallback either where relevant bodies are not members or where the self regulatory standards are not enforced. This is the model currently in place with the Press Complaints Commission.
¶2.15 It is worth noting that many professional bodies often regarded as 'self-regulatory' (such as
the General Medical Council, the Solicitors' Regulatory Authority etc) are not self-regulatory at all. Their powers spring from legislation that restricts the practice of the profession and gives the bodies the right to prevent those who fall sufficiently short of professional standards from practising the profession. Similarly, whilst the Royal Institute of British Architects (RIBA), which was suggested as a model of self-regulation4 at one of the seminars held by the Inquiry, is a self regulatory body and architects do not have to belong to it, they do have to be registered with the Architects Registration Board (ARB) in order to use the term architect and the ARB issues a code of professional practice and can take action against those who fail to comply. For that reason, these models of professional regulation are not considered here.
¶2.16 There are many examples of industry groups who have come together to agree codes of K practice that all are willing to adhere to. These codes are likely to require members to follow
¶Part C, Chapter 2 http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Presentation-by-Eve-Salomon-PDF-23.4KB1.pdf
1737¶Chapter 6 | Techniques of Regulation
particular courses of action; in the context of this report this is most relevant where the action is aimed at consumer protection. Such bodies may produce a kitemark or similar badge which is intended to represent to the public that the members who are able to display the kitemark adhere to an appropriately high standard of behaviour in the course of their work, whatever that may be.
¶2.17 It is generally accepted that industry self-regulation is often more flexible and less costly for
both business and consumers than direct government involvement. There are two principal reasons for this. Industry experts can be expected better to understand their own processes and capabilities and also have better insight into consumer needs and responses to their particular products or services than an outside or external regulator would. Self-regulation also allows industry to adapt and react to technological and market change, and consumer behaviour, at a speed that formal regulation can rarely match. If effective, this should result in better outcomes for both consumers and the industry.
¶2.18 However, for self-regulation to be effective there needs to be an appropriate alignment of
incentives to make it so. In practice these incentives tend to be the existence of a market need, and the absence of legal rules or regulation to address that need, coupled with a fear that the imposition of such rules would have a damaging effect on industry players. Ofcom research has found that most self-regulatory schemes have been established, at least in part, in response to a perceived threat of state intervention.5 The PCC, established in the wake of the Calcutt Report in 1990, as the now notorious 'last drink in the last chance saloon' is no exception.
¶2.19 For incentives to align, more is needed than simply the existence of a problem and a threat of state intervention. Self-regulation is more likely to be effective in those markets where:6 Engagement with the public: the website 37 Chapter 3: Further issues of law 38 The protection of sources and other legal privileges of the press 68 Chapter 3: Competing public interests 69 http://www.levesoninquiry.org.uk/people/assessors/lord-david-currie/ This obligation of confidence is owed by the Inquiry team to any recipient of the letter and by that recipient to me, as Chairman of the Inquiry: see para. 14(1) of the Inquiry Rules 2006 Great Britain, Royal Commission on the Press: 1961-1962: Report (Cmnd 1811) p1, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Witness-Statement-of-Dr-Rowan-Cruft.pdf p32, lines 16-21, Professor John Tasioulas, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Transcript-of-Morning-Hearing-16-July-2012.pdf Claire Enders, Competitive Pressures on the Press, Seminar 6 October 2011, http://www.levesoninquiry.org.uk/wp- content/uploads/2012/07/Claire-Enders-Competitive-pressures-on-the-press.pdf ibid http://downloads.bbc.co.uk/bbctrust/assets/files/pdf/about/how_we_govern/charter.pdf p3, lines 4-10, Robin Foster http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Afternoon-Hearing-17-July-2012.pdf Political and Economic Planning, Report on the British Press http://www.pcc.org.uk/index.html p9, para 8, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/05/Witness-Statement-of-T-ACC-Russell- Middleton.pdf Information Commissioner's Office, What Price Privacy?, p15, para 5.1 p33, para 89, ibid p2, para 6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Fourth-Witness-Statement-of-DAC-Sue- Akers.pdf http://www.levesoninquiry.org.uk/hearing/2011-11-14am/ http://www.levesoninquiry.org.uk/hearing/2011-11- p53, lines 23-24, Michael Gove, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/05/Transcript-of- Afternoon-Hearing-29-May-2012.pdf p28, lines 22-25, Rupert Murdoch, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/04/Transcript-of- Morning-Hearing-25-April-2012.pdf p3, para 10, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Witness-Statement-of-Sally-Bob- Dowler.pdf pp14-17, lines 17-3, Charlotte Church http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Transcript-of- Afternoon-Hearing-28-November-20111.pdf p5, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/02/Witness-Statement-of-Michelle-Stanistreet.pdf http://www.levesoninquiry.org.uk/wp-content/uploads/2012/03/Report-by-Elizabeth-Filkin.pdf pp4-5, paras 11-13, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/03/Witness-Statement-of-Lord- Condon.pdf p35, lines 10-12, Brian Paddick, ibid pp25-26, lines 12-11, Neil Wallis, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/04/Transcript-of- Afternoon-Hearing-2-April-2012.pdf p75, line 13, Richard Thomas, ibid, emphasis added. Mr Thomas suggested, however, that s55 of the DPA which founded the prosecution powers was most likely to be the most relevant provision of the regime to the terms of reference: p3, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/12/First-Witness-Statement-of-Richard- Thomas-CBE.pdf pp41-42, lines 25-3, Francis Aldhouse, ibid pp11-12, paras 4.18-4.19, Alexander Owens, ibid pp6-16, para 3.3-3.26, ibid p2, para 7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/02/Second-Witness-Statement-of-John- Witherow.pdf Part H, Chapter 5, para 2.64 p36, lines 4-24, Rupert Murdoch, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/04/Transcript-of- Morning-Hearing-25-April-2012.pdf p53, lines 18-19, Rupert Murdoch, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/04/Transcript-of- Morning-Hearing-25-April-2012.pdf pp4-5, lines 16-2, David Cameron, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Transcript-of- Morning-Hearing-14-June-2012.pdf pp7-8, ibid pp58-59, Lord Justice Leveson, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/05/Transcript-of- Morning-Hearing-10-May-2012.pdf; p5, lines 5-11, Lord Justice Leveson, http://www.levesoninquiry.org.uk/wp- content/uploads/2012/05/Transcript-of-Afternoon-Hearing-15-May-2012.pdf pp87-88, lines 6-2, ibid p52, lines 14-21, ibid pp3-4, lines 19-3, Robin Foster, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Afternoon-Hearing-17-July-2012.pdf Home Office Large Major Enquiry System p46, lines 20-21, Lionel Barber, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/01/Transcript-of- J Morning-Hearing-10-January-2012.pdf pp8-9, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy-Greenslade-of- City-University.pdf p14, lines 13-14, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/02/Transcript-of-Morning- Hearing-1-February-2012.pdf p10, lines 10-22, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of-Morning- K Hearing-9-July-2012.pdf p3, para 6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf p53, lines 9-22, Professor John Horgan, ibid Part K, Chapter 2 Part K, Chapter 3, para 5.14 Part K, Chapter 7, para 4.16 See for example: Application 22954/93, Ahmed v United Kingdom (1998) 29 EHRR1 at para 70, and Application 11800/85, Ezelin v France (1991) 14 EHRR 362 at paras 37 and 51
(a) "companies recognise that their future viability depends not only on their relationship with their current customers and shareholders, but also they operate in a environment where they have to act responsibly within the societies in which they operate; and; (b) companies recognise and acknowledge the identified problems which may cause harm or market failure that impede citizens or consumers; and; (c) companies, individually and collectively, acknowledge the need to reduce the identified harm or market failure, since this will improve the ability of those companies to determine the interests of citizens or consumers and, potentially, society as a whole." A fourth criterion could be added:
(d) addressing the perceived harm is not in direct conflict with providing the desired service to the companies' consumers."
¶2.20 It is worth exploring this concept a little further. Most self regulatory regimes are aimed at
dealing with the impact that the relevant organisations have on those who use their services, or at least where the consumers of their services would be expected to disapprove of the impact concerned. Examples include Association of British Travel Agents (ABTA) or other kite mark institutions, whose aim is to provide a guarantee of quality to consumers. It is in the interests of all members of a kitemark group to ensure that the standards promised by the
¶K 5 http://stakeholders.ofcom.org.uk/binaries/consultations/coregulation/summary/condoc.pdf 6 para 2.24, http://stakeholders.ofcom.org.uk/binaries/consultations/coregulation/summary/condoc.pdf
1738¶PART K | Regulatory Models for the Future
mark are upheld consistently because failure to do so will damage consumer trust in their own product.
¶2.21 A different example is the Internet Watch Foundation (IWF) where Internet Service Providers
(ISPs) co-operate not only because the majority of their customers do not themselves want to be exposed to images of child abuse, but also because it is very much in their interests not to be seen to be providing access to such images to those who do want to see them.
¶2.22 The potential for successful self regulation is reduced where the harm complained of is to a
third party and does not obviously damage the interests of the companies concerned or their consumers. Obvious examples of this would be the use of child labour, or casual dumping of waste leading to environmental damage. Such activities might lead to higher profits and cheaper products, so pleasing both producers and consumers. The fact that they have a wider social cost that is not generally considered acceptable may be sufficient to prevent this type of behaviour but, equally, it may not be if the relevant company believes that it can achieve its ends (albeit causing the harm) in secret and without being detected.
¶2.23 It might be argued that public concern over the wider social costs would be enough to lead
to a successful self regulatory outcome, but the continued sale in the UK of products that are made by child labour, or the production of which leads to environmental degradation in its country of production, whilst strict laws in the UK prevent such things from happening here, is testament to the difficulty of achieving pure self-regulatory outcomes that might be in the wider public interest, when direct consumer interests do not align with the wider public interest.
¶2.24 A less extreme example might be online copyright infringement. The growth of the internet
has led to widespread habits of sharing music and film (and increasingly books and magazines) online through informal, unlawful, channels rather than buying them from legitimate sites. This is breach of copyright and deprives the creators and the creative industries of the legitimate revenue that they need to reinvest in the production of new content. The Government looked for self-regulation among ISPs to find ways of preventing internet users from engaging in these unlawful activities. However, the harm does not affect ISPs, and providing a solution was likely to be unpopular with their consumers who are precisely the people engaging in, and (in their eyes) benefiting from, the unlawful behaviour. In the absence of a self regulatory solution, Parliament passed legislation requiring action from ISPs because they believed the wider public interest required a solution to be put in place even though neither the service providers nor their consumers had any incentive to co-operate.
¶2.25 The relevance of this final point to the situation with the press is obvious. The Inquiry has
heard evidence that the PCC is good at some things, such as mediation, and not at all effective in relation to others.7 Similarly we have heard evidence from editors8 that the continued purchase of newspapers by the public is proof that the public is satisfied with the standards that obtain. We have also heard substantial evidence of the harm that newspaper behaviour has done to many individuals: these include some who have put themselves in the public eye deliberately, some who are there incidentally because of a famous friend or relative, some who find themselves well known because of terrible things that happen to them and yet others who become the subject of media interest purely by freakish chance. None of this is about harm done to readers, that is to say the people whose purchasing decisions apparently tell the editors that they are making the right call; it is all about harm to third parties who
¶K have no voice in that transaction.
¶Part J, Chapter 4
¶Part F, Chapter 6
1739¶Chapter 6 | Techniques of Regulation
¶2.26 The Inquiry has had representations from members of the public complaining more generally
about the content of newspapers; the complaints include a diverse range of press activities such as the sexual objectification of women, the vilification of migrants and the abuse of the disabled.9 These cases also raise questions of a wider public interest than purely what any given portion of the public might like to read about and therefore whether consumers are getting fair treatment. Harm of this sort is less susceptible to effective self-regulation than harm as part of the producer/consumer contract.
¶2.27 Ofcom also argues that self regulation is more likely to be effective where citizens or consumers
and all other individuals share common views as to the merits of regulating the activities of companies to achieve a particular social objective. The vigorous debate that has raged over these issues as the Inquiry has gone about its business suggests that this criterion is not met in relation to press regulation, in particular as it applies to privacy.
¶2.28 Finally, self-regulation will be more able to succeed in a market environment with active
participation by the industry. In those circumstances, cohesiveness is most likely to administer effective self-regulation as industry participants are more likely to commit financial resources, consult with stakeholders and monitor the effectiveness of self-regulation. This, at least in part, does appear to be the case in relation to the press, with the market having been able to sustain the existing funding mechanism for the PCC (through PressBoF) since its creation in 1990.
¶2.29 Self-regulatory industry bodies tend to have few sanctions other than expulsion from the
body. Levels of monitoring of compliance and enforcement vary. There are various options as to how compliance could be monitored. One option is simply rely on members to comply with the relevant standards. A second would be to require self declaration of compliance and a third would be to have independent verification of compliance and/or enforcement mechanisms. The PCC runs a reactive approach, relying for the most part on members to police their own compliance, with a reactive, complaints-based, enforcement mechanism and an Independent Review which can consider appeals concerned with the PCC process (but not on the substance or merits of the complaint or the adjudication).
¶User regulation 2.30 A further form of self-regulation is regulation by the user community. Many online services
are seen to be self-policing. An obvious example is Ebay, in which users rate the service they have had from members either as buyers or sellers in order to enable users to buy and sell with trust. Similarly the operators of other online sites invite users to self-police by reporting breaches of terms and conditions, with the service provider which then takes action when notified. This mechanism can work well where it is in the interests of users to provide feedback on inappropriate behaviour, and where there are quick and simple mechanisms to do so. It is thus a relatively good tool in some online environments but less likely to be effective in the physical world.
¶Co-regulation 2.31 Co-regulation means any form of self-regulation with some sort of external, independent,
incentives, oversight or form of backstop. There are many different ways in which the backstop can be provided and they will have different impacts. These can include recognition K
¶Part F, Chapter 6, Section 8
1740¶PART K | Regulatory Models for the Future
of a self-regulatory body by Government, law or a statutory regulator; approval of codes by Government or a statutory regulator; and compulsory membership or funding arrangements. Variations on each of these models exist in different sectors in the UK and elsewhere and the model is almost infinitely variable. The basic variations are explored.
¶Recognition of self regulation/regulatory backstop
¶2.32 The circumstances in which incentives might align to make self regulation effective are
described above. A further incentive for co-operation with self-regulation can be provided in the form of recognition by the courts or a regulator of the process of self-regulation.
¶2.33 The Advertising Standards Agency (ASA) is an example of co-regulation, where the agency
act as the regulator in relation to both print and broadcasting advertising. In the case of print advertising, the Office of Fair Trading (OFT) has statutory powers to deal with misleading advertising and in the case of broadcast advertising, Ofcom has statutory powers through its licensing regime. However, both statutory regulators recognise the role of the ASA and only take action in relation to advertising issues when referred to them by the ASA. Specifically, the Control of Misleading Advertisements Regulations 1988 require the OFT, before considering a complaint about the misleading nature of an advertisement to satisfy itself that 'such established means as the Director may consider appropriate' have been used and have not dealt adequately with the complaint and that he should have regard to the desirability of encouraging the control, by self-regulatory bodies, of advertisements. The ASA does not, therefore, have statutory recognition itself, but the statute sets the framework within which the ASA can be given the space by the OFT to operate.
¶2.34 This sort of approach has many advantages. First, it brings all the advantages of self regulation
(efficient regulation, speed of response, flexibility in the light of social and technological change). Second, it provides an incentive for industry to comply with the standards and rulings of the self-regulatory body since the alternative is to face a regulatory process with the regulator. Third, it provides an incentive for industry players to ensure that the self-regulatory body is credible, since the regulator can only accept the rulings of the self-regulatory body if that body deals satisfactorily with complaints. Finally, it provides a backstop in the case of those parts of the industry which might chose not to comply with the standards or rulings of the self-regulatory body but who are, none the less, subject to the law and to the jurisdiction of the regulator.
¶2.35 On the other hand, this approach does require the basic ground rules to be set in legislation.
It requires the existence of a regulator capable of acting as a backstop and it leaves open the possibility of conflict between the regulator and any self-regulatory body over what standards should apply, within the legislative framework. A basic framework approach of this sort could allow for two or more self-regulatory bodies running different codes or standards as long as the regulator was content to recognise both, but it would also allow the regulator to favour one self-regulatory body over another.
¶2.36 In practice, it may be felt that it is easier to arrive at an ASA model where a strong industry
self-regulatory body already exists, but requires some legislative underpinning in order to ensure appropriate standards are set and maintained without exception across the industry, than in the case where a new self-regulatory body would have to be called into being. In the absence of a credible self-regulatory body, the regulator might have to develop codes and
¶K standards itself, in order to provide appropriate predictability, consistency and transparency
1741in the market. In the online copyright infringement example mentioned above, the legislation requires Ofcom to seek to approve an industry code, but provides that in the absence of an
¶Chapter 6 | Techniques of Regulation
appropriate industry code Ofcom should impose a code of its own that meets the requirements of the statute. In that model, a structure which appears, on the face of it, to provide a co- regulatory approach in practice (depending on the circumstances) can end up delivering a statutory regulatory outcome.
¶2.37 It is possible to imagine a lighter touch regime than the ASA version. For example, the courts
could be required or encouraged to consider compliance with the standards of a self regulatory body as a sufficient defence against a relevant complaint. For example, if a regulatory body established a process for considering the existence of a public interest before engaging in activity that might otherwise constitute a breach of privacy then the courts might consider that compliance with that process demonstrated (at least prima facie) sufficient grounds to give rise to reasonable view that the public interest was engaged and the intrusion was legitimate.
¶2.38 On the one hand, a co-regulatory model can encompass anything that could be done under
self-regulation whilst adding an element of compulsion to make effective enforcement possible. On the other hand, it can encompass anything that could be done by a statutory regulator but put relevant decision making in the hands of those closest to the industry, and rigorously separate from Government, to seek to gain the benefits of self-regulation without losing the benefits of statutory backing. This is a model that is much in use in the UK. Most professional regulation is co-regulation by this definition where the practice of the profession (law, medicine, architecture etc) is protected by law and the professional bodies that, police it do so with the statutory backing that allows them to rescind or refuse a license to practise. Advertising is a well known example of successful co-regulation. Others include ATVOD, PhonePayPlus and the ACAS Code of Practice on Disciplinary and Grievance Procedures.
¶Statutory regulation 2.39 In this Report a reference to statutory regulation means a system where the scope and
coverage of the regulation is set by statute. Again, there is a broad spectrum. At one end is the situation where the full detail of the regulation (in fact, law) is set by statute with enforcement by the police or otherwise through the courts. At the next level, is the regime where most of the detail of the regulation is set by statute, but with a regulator acting primarily as an enforcement body: many consumer protection regulations, with OFT regulating, fall into this category. Then there is the case where the regulator is established by statute and given objectives to meet, along with the tools with which to do so, leaving the regulator to set the detail of the regulations, to make regulatory decisions and then to enforce them: most sectoral regulators such as Ofcom, Ofgem, and Ofwat fall into this category. In some models the regulations set by the regulator might themselves need to be approved by Parliament. In others the regulator is free to manage the regulatory regime without external oversight but subject to appeal though an appropriate judicial body.
¶2.40 Statutory regulation, with the legitimacy of Parliamentary debate and approval, represents the
1742will of the people to impose certain standards of behaviour. Statutory regulation is primarily used to address circumstances where horizontal law is insufficiently precise to deliver the outcomes required and, where the nature of the problem to be resolved is such that the operation of the market is not likely to deliver the solution. This is the case, for example, where there is a high degree of concentration within an industry, leading to the possibility of anti-competitive behaviour with negative impacts for consumers. It is also unlikely that the market alone will provide appropriate consumer protection where companies take a short- K
¶PART K | Regulatory Models for the Future
term view of the factors influencing their viability and are focused predominantly on the interest of their current customers and shareholders.
¶2.41 Statutory regulation is an effective way of dealing with issues relating to the impact on third
parties of activities outside the commercial relationship involved. Legislation can be used to require parties to take into account broader social or public interest issues that would not otherwise form a part of their commercial consideration of their interest. To express that in more economic language, this is where external costs arising from the activities of the companies are borne predominantly by sections of the society other than by the customers of those companies and the companies themselves.
- Regulatory tools
¶3.1 The previous section considers different ways in which regulation can be delivered. This section
aims to consider the types of tools that can be used. Most of these tools could form part of any regulatory tool kit whether it was self-regulatory, co-regulatory or statutory regulation.
¶3.2 The purpose of regulation is to deliver an outcome that society wants. However, regulation is
not the only way to influence or change behaviour. I thus turn to the categorisation identified by Mr McCrae of the different ways in which changes to behaviour can be encouraged and influenced, namely: enabling, engaging, exemplifying and encouraging.
¶Figure K6.1
- Remove barriers
Approach evolves • Give information as attitudes and • Provide facilities behaviours change • Provide viable alternatives over time • Educate/train/provide skills
- Provide capacity Enable
- Tax system • Community action
- Expenditure – grants • Co-production
- Reward schemes • Deliberative fora
- Recognition/ Encourage Catalyse Engage • Personal contacts/ social pressure – Is the package enough enthusiasts to break a habit and league tables kick start change?
- Media campaigns/
- Penalties, fines & opinion formers enforcement action • Use Networks
Exemplify • Leading by example • Achieving consistency in policies
¶K
1743Source: Donald McCrae, slide 3, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/ Donald-Macrae1.ppt
¶Chapter 6 | Techniques of Regulation
¶Enable 3.3 This includes removing barriers (of whatever sort) to the desired behaviour, giving information
and providing viable alternatives, including through capacity building, skills, training and facilities. Two different aspects of press culture have been raised with the Inquiry: on the one hand, there is behaviour that breaks the law or is, in some other way, in breach of recognised, accepted standards (which, in shorthand, I refer to as unethical), and on the other hand, there is concern that the press is not sufficiently engaged in genuine investigative work. The Inquiry has not heard any evidence to suggest that there are barriers preventing lawful or ethical behaviour, as opposed to pressures encouraging unethical behaviour. The Inquiry has, however, heard arguments10 that there are barriers in place that make it difficult for the press to pursue legitimate investigatory journalism, in particular current libel laws, the new Bribery Act and uncertainty over the interpretation of the public interest.
¶3.4 There is no doubt that newspapers are largely operating in an increasingly challenging
economic environment, with the need to compete with 24 hour news and the internet. Newspapers are now required not only to fill their printed pages on a daily (or weekly) basis but also to provide constantly updated content on websites and they do this with reduced numbers of journalists. In this context, issues around resourcing and training of journalists are clearly highly relevant.
¶Engage 3.5 Another route to changing behaviour is to leverage the enthusiasm and commitment of
interested parties. This involves community action, media, opinion formers and using networks. There is clearly substantial interest from MPs, the public, academics and pressure groups in the issues of press culture and ethics.
¶3.6 The Inquiry has seen no evidence of a lack of engagement on the part of those outside of
the media. On the other hand the partial approach to reporting in the press either the extent (or even the existence) of problems with press ethics has been exemplified by reporting of the phone-hacking scandal from the very beginning. It is widely, and rightly, recognised that there would not have been the public concentration on these issues of press culture and ethics had not an investigative journalist, (Nick Davies), with a support of national newspaper (The Guardian), not pursued phone-hacking determinedly. On the other side of the scale, the rest of the press, together with the PCC, were keen to paint the Mulcaire case as that of one rogue reporter.11
¶3.7 The nature of the problems identified by the Inquiry suggest that the tools of engagement,
whilst potentially complementary, are unlikely to be sufficient by themselves to change behaviour.
¶p21, lines 14-21, Nick Davies, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Transcript-of- Afternoon-Hearing-29-November-2011.pdf p2, Alan Rusbridger, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Alan-Rushbridger.pdf
¶K 11
¶It is also possible to point to the way in which the Inquiry has been reported, in particular relating to the different arguments for alternatives to improved self regulation along the lines proposed by PressBoF. The press is, of course, entitled to be partisan but the extent to which there has been any balanced discussion or analysis of the arguments is, at least, open to debate
1744¶PART K | Regulatory Models for the Future
¶Exemplify
¶3.8 Exemplification includes leading by example and achieving consistency in policies. The Inquiry
has heard many references to examples of excellent journalism and adherence to excellent ethical standards within the British press. The Inquiry has, however, heard fewer instances of use of such examples of excellence within the industry to promote ethical behaviour. The PCC receives complaints and, unless mediated, produces adjudications on them which lead to reminders to papers and journalists of the nature of the code and the production of additional guidance on good behaviour.
¶3.9 The Inquiry has been told of many examples of excellent investigative journalism, ethically
conducted, being lauded within the industry: examples include Thalidomide, phone hacking and MPs expenses. However, on the other hand there appears to be no particular censure for unethical behaviour: for example, even after the decision of Eady J awarding damages for breach of privacy to Max Mosley, in which the activities of the chief reporter were heavily criticised, the News of the World (NoTW) put that story forward for the title of scoop of the year.12 The NoTW did not win (the Times won the title that year) but the story suggests that NoTW did not expect accuracy or ethical standards to be a material factor in deciding the winner. Again, the nature of the problems the Inquiry has heard suggest that, whilst best practice will certainly have a role to play, it is unlikely to be sufficient to address all concerns.
¶Encourage
¶3.10 In the context of this list of mechanisms to change behaviour, 'encourage' includes all
regulatory measures, including through the tax system, transparency requirements, penalties and enforcement measures and positive approaches such as reward schemes and targeted grants.
¶3.11 Some of these tools are rewards for good behaviour, others sanctions for bad. Some might
be seen to work both ways. Public money can be provided either to fully fund activity seen as desirable (e.g. the BBC) or in other ways. Examples from the broadcasting sector include Channel 4, which is publicly owned, and has historically been funded both by its own commercial income and by subsidies levied from other public service broadcasters and other terrestrial broadcasters who have access to spectrum to broadcast and in return have to meet public service broadcasting requirements.
¶3.12 There is less tradition of the state funding the press, though many local authorities publish
newsletters which are distributed to the local population and which contain council news, sometimes other local news and advertising. All books and newspapers are exempt from VAT, whilst online publications are not. In addition Royal Mail operates a specific tariff (presstream) for distribution of newspapers and magazines.
¶3.13 Governments can provide public money for grants to encourage all sorts of behaviour, from
grants for film production to the car scrappage payments, from the solar power feed-in tariff to help with starting up small businesses. Grants and other payments can be used to encourage behaviour change by citizens, consumers or businesses of any size.
¶K pp55-56, lines 15-1, Colin Myler, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/12/Transcript-of-Afternoon-Hearing-14-December-2011.pdf
1745¶Chapter 6 | Techniques of Regulation
¶3.14 Newspapers and magazines are substantial recipients of public subsidies in some countries.
In France, for example, the press received €20m in subsidies in 2008,13 with all forms of aid to the press estimated at €1.2bn.14 These subsidies take the form of direct payments for technological improvements, subsidised travel for reporters, reduced mailing rates for newspapers, tax advantages etc. Some subsidies are direct grants, others are repayable loans. In addition a new scheme was started in 2010 to provide free newspapers to young people (one free copy a week; distribution is also paid for by the Government); this is an attempt to persuade the new generation to develop the habit of reading newspapers.
¶3.15 Sweden also provides direct subsidies to the press (around €61m in 2009),15 as do Denmark
(around €44m in 2008)16 and Norway (around €35-40m in 2005)17 both directly and in the form of tax exemptions.
¶3.16 The tax system is one way of incentivising desired behaviour. In general, in recent decades UK
Governments have taken the view that the corporate tax system should by used in this way only to address horizontal market failures, e.g. in relation to R&D. There are exceptions (the tax relief for film is one example) but these are not widespread and there is little appetite to increase them. The Inquiry has heard suggestions that the VAT exemption could be used as a mechanism to encourage compliance with a self-regulatory approach to standards, but there are overwhelming legal problems with that idea.18
¶3.17 Also under the 'encourage' heading is the wide range of more direct regulatory steps that could be taken. These are addressed below.
¶Transparency 3.18 Transparency is valuable in a situation where consumers or others need information to take
relevant decisions. This could work in two ways. It can take the form of transparency of action (e.g. requiring all stories to run under the byline of a real person; requiring transparency on the sources of quotes, requiring transparency on the method by which any story has been obtained). It can also take the form of transparency of compliance (e.g. requiring visible corrections, publishing accuracy league tables, publishing data on compliance with regulatory standards).
¶3.19 The advantage of transparency as a tool is that it enhances the effectiveness of the market by
reducing information asymmetry and putting consumers in the position of being able to take a judgment on issues that they might otherwise not be aware of. Transparency should not in itself add significantly to regulatory cost, nor does it necessarily require any particular change to the standards set, the point is simply to ensure that compliance, or the lack of it, is visible.
¶3.20 However, the difficulty of relying on self-regulation, where the harm or costs to be avoided
1746fall to third parties who are not a part of the commercial transaction to be regulated, was identified earlier. Transparency has some advantages in this respect by bringing those external costs to the attention of consumers, but it does not actually address the situation where the consumers have no direct interest in the external costs or harm.
¶PART K | Regulatory Models for the Future
¶Complaint Resolution
¶3.21 Complaint Resolution allows for those, whether consumers or third parties, who consider
themselves to have been harmed by an action to seek some form of restitution or redress. There are various models of complaint resolution. Most start with the complainant putting their case to the company concerned. If the company fails to resolve the complaint to the satisfaction of the complainant then the matter is classed as a dispute and there could be an independent body that would seek to resolve the dispute.
¶3.22 Currently the PCC acts as a quasi independent dispute resolution body in respect of complaints
about press conduct and content, but only where the publisher is a funding member of PressBoF. There is no independent dispute resolution mechanism for those publications which chose not to be a part of the PCC.
¶3.23 One widely used model for complaint resolution is the Ombudsman model. Ombudsmen can
exist under statute or under voluntary agreement, and they will vary in how they operate and their powers. The Financial Services Ombudsman is a statutory body which has powers to resolve disputes between financial services companies and their customers in respect of a wide variety of products. The role of the ombudsman falls into two parts: first mediation to seek an agreed outcome and second, mediation having failed, determination of the dispute and imposition of a remedy. In the case of the FS Ombudsman the resolution is binding if the consumer accepts it but they can choose to go to court if they wish to.
¶3.24 More generally Ombudsmen provide remedies which are fair and reasonable in all the
circumstances, and are not necessarily bound by a strict interpretation of the law or precedent. In the public sector and in some private schemes their recommendations are not binding but met with nearly total compliance. This is secured by a variety of means whether by law, by contract, by publicity, by a regulator or by the moral force and the standing of the Ombudsman. There is no appeal against Ombudsman decisions, other than Judicial Review (where applicable) or where schemes (like the Pensions Ombudsman) have an appeal procedure in place.
¶Incentives
¶3.25 Many types of incentives are available. The possibility of tax incentives has been considered
earlier but tax is a very blunt instrument for changing behaviour. Generally rewards can come in terms of specific benefits or preferential treatment although it is difficult to consider this in the abstract. A number of specific suggestions have been made to the Inquiry in respect of the sorts of incentives that could be used, including: coverage in the ABC circulation figures; advertisers boycotting publications outside the regulatory regime; enhanced weight being given to public interest arguments in relation to unlawful behaviour; alternative dispute mechanisms to deal cheaply and quickly with libel and defamation cases (as well as other standards breaches) without going to court; and access to pre-publication, public interest advice that could be relied upon in retrospect.
¶3.26 Some of these would be purely self-regulatory and would rely on the goodwill of parties
outside the press (e.g. the advertising industry), some might require legislative change to deliver and others might require the involvement of the courts (which means changes to the law). All of the incentives that have been proposed to the Inquiry are considered fully in Part
¶K K, Chapter 4.
1747¶Chapter 6 | Techniques of Regulation
¶Penalties 3.27 Penalties for failure to comply can include dissuasive penalties to attempt to prevent non-
compliant behaviour occurring (or recurring) and remedial penalties to provide redress and make good the wrong, once the contravention has occurred. Generically, dissuasive penalties can include fines, removal of privileges/rights either as a punishment in its own right or to make it impossible for the perpetrator to repeat the offence (e.g. imprisonment, removal of a licence), additional checks and constraints on behaviour and public disclosure. Remedial penalties can include payment of compensation, and other acts of restitution such as an apology.
¶3.28 In the press context the Inquiry has heard suggestions for a range of potential penalties in both
the dissuasive and remedial categories: these include fines, a regime for requiring journalists to hold a press card, temporary prevention of publication, and publication of corrections with equal prominence to the offending article.
¶K
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