Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 560 - 579)



  560. The regulation has failed then. If you are arguing the case that so long as it was competition law, whatever, whatever, I suppose you are arguing that competition law is not strong enough.
  (Dr Stelzer) No, no. It is strong enough and it has succeeded. What it has done is it is now enjoining the practices and they have stopped; they are going to pay enormous fines; they have had to open up their systems. So competition law has succeeded in whittling down the monopoly power that they built up through these anti-competitive practices. Absolutely a success.


  561. Following the line of questioning of Mr Wyatt, could it not be argued that people in this country are unduly obsessed about what they regard as the baneful effects of media ownership? If one looks, say, at the past general election, within Associated Newspapers, The Daily Mail supported the Liberal party, though not very ardently, while the Evening Standard supported the Labour party. Of the four News International newspapers, in the 1997 election they supported three different groupings—The Times having this somewhat bizarre attitude of supporting anybody who was opposed to membership of the European Union, which means that they supported one of my opponents. So three different lines among four newspapers. At this last general election they all supported the Labour party, but those were the decisions of the editors rather than of the proprietor. If one looks at your stake in BSkyB, Sky News has just—in my view, rightly—received two awards for the quality of its news service and one has never seen any temptation by them or any other news organisation that is privately owned to import bias into its news. To what extent is this British pre-occupation with the allegedly baneful effects of ownership justifiable?
  (Alison Clark) I am not sure there is a British preoccupation with it. I do not think that most people in this country know who owns the newspapers they are reading or the television stations they are watching. I think there is a lot of discussion amongst the chattering classes and in Westminster but I do not think there is a general concern. I do not know how many letters you MPs receive every week complaining about media ownership issues, but I suspect it is just a few. The other confusion is to separate out this ownership from content. If you are concerned about content, if you are concerned about the origin of content, then use content rules where appropriate. The ownership is irrelevant. We own newspapers in this country. We are seen to be a foreign company. But those papers are effectively British. As you say, they take independent editorial lines which are set by their editors. We own TV stations in Asia which produce Asian programmes. We own a TV station in Australia which is thriving by producing Australian programming—you know, the ownership of it is not relevant. I do not actually think that Britain is obsessed with ownership of the media—not the normal consumers of British media.

Chris Bryant

  562. Dr Stelzer, you said that as long as there is robust competition in the market and you have a robustly competitive market—and I think you were talking about broadcasting at the time but I presume this applies to newspapers as well—all is well. Yes?
  (Dr Stelzer) Yes.

  563. My worry is that in the newspaper market we clearly have a very competitive market. We have more national newspapers and regional newspapers than, I think, any other country I know. But that does not mean that you have accuracy in those newspapers. I would actually argue that, in many ways, if you have too competitive a market it can mean that you have less accuracy in newspapers.
  (Dr Stelzer) I assume that there are newspapers that are more accurate than others, more authoritative than others. I assume that newspapers that are traditionally known to make terrible errors will find their credibility going down and their sales going down. If you put out all those newspapers every day, there are going to be mistakes in that. Consider the alternative: as far as members of the Soviet Union's legislature is concerned there was never a mistake in Pravda. Ever.

  Mr Bryant: I do not think there are only two alternatives in the world, one being a Soviet understanding of propaganda and the American free market.

  Michael Fabricant: It is the third way!

Mr Bryant

  564. Join the Labour party whenever you feel free, Mr Fabricant.
  (Dr Stelzer) Consider the alternatives. If you are going to have all those newspapers competing, and some are going to make mistakes and get things wrong, I guess, the more of them you have, just by virtue of the total amount of newsprint that is going out there you will have more errors. The question is: how do you stop that? I guess, consumers know. They know the difference between a bit of entertainment and a bit of news and buy different newspapers for that.

  565. I am not sure they do. Or I am sure that newspapers try to make sure that they do not buy it on that basis. Newspapers try to make sure that people buy their newspaper according to all sorts of loyalties, splash things on the top, and of course bargains.
  (Dr Stelzer) Which is competition.

  566. Yes, all of which may be fine but my worry is . . . . I had a recent experience where I wrote an article which was used in a British newspaper and an American newspaper. The American newspaper came back to me and wanted to check through every single fact, every quotation, every person, whether they were the secretary of state for this that and the other. The British newspaper had absolutely no interest in any of that. They did not check any of the facts. It seems to me that we do have a problem. On Sunday mornings, one of my favourite games is to get The Sunday Times, read the front page of the newspaper—great headlines always, encouraging you to buy the newspaper by the headlines—and try to find a single attributable quote or attributive quote or a single fact that stands up.
  (Dr Stelzer) I am not the editor of The Sunday Times. I can tell you that when I file my column there is pretty elaborate fact checking. It may be this is peculiar to the business section, I do not know. I can tell you that my experience with the British press is exactly the opposite. The Guardian reprinted a piece of mine when I—

  Chairman: A document of fiction.

Mr Bryant

  567. The Guardian.
  (Dr Stelzer) Well, it asked me for permission to reprint the piece, I said no. They asked the magazine for permission, it said no. They printed it anyhow. They took out a sentence in which I had declared an interest and they took out the date, which was really the relevant thing about this whole thing. So I understand your problem with at least some of the British press. But if you have all those newspapers out there, the chance that, if somebody makes a glaring error . . . As I understand, for instance, if you look at the wars between The Mirror and The Sun (which are amusing but also informative), they jump on each others errors.

  568. But it does not make any difference as to whether people actually buy the newspapers. I think what I am trying to say is that competition does not give you truth or accuracy in the media in any sense. When we had Mr Ball here from Sky, he said that the BBC was congenitally programmed constantly to grow, and I think my worry is that Sky is congenitally programmed to seek monopoly power. Do you think there is any competition law problem inherent in being vertically integrated throughout the value chain for Sky?
  (Dr Stelzer) I do not recommend this but if you have read a lot of pieces I wrote, I am concerned about vertical integration, especially where there is monopoly power at one of the horizontal levels. If there is monopoly power at a horizontal level, that, let's say, BT has of the last mile, I am concerned about vertical integration. That is why I am not discouraged by the fact that the Office of Fair Trading is doing a rather comprehensive review of Sky's practices. I think that is appropriate and I am reasonably confident that a fair result will come out if Sky has not been abusing things. Mr Ball assures me it is not. The OFT will have any needed remedy. That is what competition policy does, that is why it is a good thing.

  569. Dr Stelzer, one other question, which is about small regional media worlds, as it were. South Wales has one body which has probably about 60 per cent of the market which is the BBC/S4C—all the news for S4C is produced by the BBC because it is in the Welsh language and that is part of the contract that the BBC has. So you have effectively one news' source that has approximately 60 per cent of the television market for news, then you have HTV, then, in my own patch, we have three main newspapers that affect people's lives, all of which happen to be owned by the same body. I am relaxed about the three local newspapers—which the average person thinks are three completely different newspapers—being owned by the same body, until the moment when they decide that there should be only one person reporting from parliament for each of those three sources. Do you think that if we simply rely on competition law we will have a robust enough system to make sure that the kind of diversity that people expect will remain?
  (Alison Clark) We do not own any local newspapers in the UK. None of those newspapers are ours. I do not know who owns them. Our national papers have political teams for each paper and there is not any cross-over between them. I cannot answer for the owner of your local paper. I do not know who it is.

  570. In your very robust, aggressive, market-driven paper, you are arguing for sweeping away the foreign ownership rules and sweeping away the cross-media ownership rules. It seems to me that those are the only ways that we have of maintaining diversity.
  (Alison Clark) How are those rules affecting what is happening at the moment in your local paper market?

  571. I am not advocating that we should keep them exactly as they are. I think there is still an issue to be addressed for the future.
  (Alison Clark) I do not understand your argument, though.

  572. But you are arguing in favour of completely getting rid of all the regulation and I am not sure that we will then have anything to be able to protect diversity.
  (Alison Clark) There are no foreign ownership rules in the local newspaper market already, so we are not lobbying to get rid of them if they are not there.

  573. And the cross-media ownership rules as well. What I am saying is that if in a local market you have very few operators, really very few points of entry into the news market, then there is a danger, if you solely rely on competition law, I am sure, that we will have nothing to maintain the diversity in the market.
  (Dr Stelzer) Competition law has the flexibility of being applied by people who are expert in it to accommodate the fact of local monopoly. Competition law does not just deal with national monopoly power. If there is a regional market that makes sense as an economic market, and if that market is not served as well by national media as by local media, competition law can take care of that. There is case after case in which the first thing you do is define the geographic market. If the geographic market is as you have described it, competition authorities would be able to act.

  574. But the definition of market nearly always, in my experience, in Europe and in the UK takes two years. In a market such as, for instance, satellite television, where things are moving so fast, by the time you have defined your geographic market you have lost the revenue or you have a monopoly or a near monopoly in place. In actual fact, in large parts of Scotland and Wales Sky has an entire monopoly on digital and multi channel television, full stop.
  (Dr Stelzer) You have built in the market definition into your—

  575. I have but it is not one that is ever accepted by any of the books.
  (Dr Stelzer) Fortunately because it is bad economics.

  Chairman: They have got a monopoly because people want to buy it, do they not?

  Mr Bryant: No, they have got a monopoly because there is only one provider.

  Chairman: But they do not have to do it. They can abstain from doing it.

Ms Shipley

  576. Editorial quality, to take up the point we were discussing earlier. Witness today's Telegraph, a serious broadsheet newspaper—that is its reputation. Frankly, today it looks not unlike the fashion pages of a women's glossy magazine. There are pages and pages of political content given to the fact that the Prime Minister wore a blue shirt and his wife wore a yellow thing with shells on it. This is not a little piece; we are talking pages, major pages. How a serious newspaper gets itself into that situation, I really do not know. I would be attracted to it because it had serious content, so I do not know what is driving this other side to it at all, but it is of concern. On the larger point, Alison, you—rightly, I think- say that the public are unaware of media ownership. I totally agree with you. Nobody knows. The general public are not interested. But I do think there is potentially a problem because they do not know. It is only a potential, it is only projecting into a pretty cynical future, but, if you have a global ownership of a serious amount of communication in a large number of countries, the power base that you have is absolutely enormous. And if you chose to use that for some illegal means, you could, simply because the vast majority of people are unaware of it. It is not particularly difficult to construct a scenario where such mechanisms could be brought into operation. I think that itself is a serious consideration but is not one that is on the agenda at all.
  (Alison Clark) Obviously The Telegraph is not one of our newspapers. The editor of The Telegraph will take a decision as to what he thinks readers want to read. We are very lucky in this country, in that we can choose to read another paper if we do not like what is provided. In some countries they do not have that option. We do have a very diverse press.

  577. It was actually addressing the competition issue, because you can see all the newspapers actually manoeuvring that way. I just gave an example of what is happening here today. The global question was actually directed to you.
  (Dr Stelzer) I do not share that nightmare.

  578. Which one?
  (Dr Stelzer) Of the global media-owner above all restrictions by countries, the laws of the countries in which he operates, manipulating the political leadership of those countries because he owns various media outlets. It is not the world I see. I see a world in most democratic countries of widespread adverts in newspapers, lots of sources of information, people smart enough to sort out fact from fiction, fraud from news. If The Telegraph decides to do that every day, they may find they get a very negative reaction. It is hard for me to conjure up that world because, first of all, media ownership is not that concentrated anywhere. I cannot see America's freedoms threatened by Vivendi's ownership of media assets in America. I think that countries that bar foreign ownership cause great problems for themselves, as Germany is now doing, trying to find a German solution for the Kirch problem. So I am afraid I just do not share that fear, at least to the extent of wanting to legislate about it in 2002.

  579. You seriously cannot think of any scenario where a global ability to communicate in that way could have serious detrimental consequences? Let me give you an example: environmental issues at a global level. If a very large business person had concerns, financial concerns or something, and they wished to manipulate countries here, countries—which we are working on when we are talking about global environmental issues of a major, major sort—it is not inconceivable to be able to plant a number of stories over a mass of media to manipulate an understanding of a particular topic, particularly if it is only done on a single issue amongst a morass of other issues, and actually to build a particular point of view around a subject. It is extremely difficult then to differentiate one that has been manipulated from one that has not.
  (Dr Stelzer) But you are assuming that somebody would have monopoly power in each of the separate countries. I think the environment is a good example, because it is of international importance. Kyoto is of international concern and the diversity of press reports in most countries is interesting. To the extent there is a consensus, that anyone has been able to get a point of view across all nations, it has been the environmental groups not some media mogul or some businessmen with an interest to protect.

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