OFT considers council papers in media ownership probe

The Office of Fair Trading has said it will look at the effect council titles are having on newspapers as part of its review into the media ownership regime.

In a consultation paper published this week, the competition watchdog invited the regional newspaper industry to submit “further views or evidence relating to public sector media”.

The OFT is currently investigating whether the current rules that apply to local media mergers are still appropriate.

Regional newspaper publishers have argued that the current method of measuring competition is outdated in a multiplatform age.

They say that print media markets are no longer self-contained and face competition from TV, radio, cinema and the internet.

The OFT has so far held meetings with the Newspaper Society and the newly former Local Media Alliance – which brings together the chief executives of seven major regional newspaper publishers.

The two groups are understood to have raised serious concern about the impact local authorities are having on the already fragile local media.

Publishers have told the OFT they are under increasing pressure from public sector bodies developing their own media outlets – such as newspapers and online TV channels.

Some of the respondents to the initial round of consultation last month said any such launch should be the subject of an extensive public value test and market impact assessment to examine what effect it will have on existing titles.

The local authorities that submitted a response to the OFT investigation argued that their own communications were important “to ensure accountability”.

Some of the public sector respondents also pointed to the “decreasing effectiveness of local print media”.

But the local authorities said that – despite the importance of council communications – their own titles should not be considered when assessing plurality of news sources in any given area.

They said this was because the role played by the local media in “holding public bodies to account” could not be duplicated by public sector-owned media.

They also said it was important to make a distinction in the OFT review between councils reducing their own local advertising spend in newspapers and directly competing with the local media for advertising revenue in the open market.

Questions

The OFT’s review comes three years after media regulator Ofcom concluded that no changes should be made to the media ownership regime. Ofcom’s next review is due this year.

In their initial responses to the consultation, some publishers warned that action was needed urgently because “the dramatic loss of advertising revenues is threatening the viability of a number of papers”.

The industry argues that further consolidation is needed, allowing publishers to benefit from economies of scale and better compete with bodies such as the BBC.

One respondent suggested that there could soon be a “large-scale loss of titles” if nothing was done.

And the OFT said that, according to some reports, regional newspaper advertising revenues could fall by more than a quarter this year.

Among the questions asked in the consultation paper are:

  • Are the newspaper public interest considerations still appropriate for local and regional newspaper mergers in their current form?
  • Should they be amended to incorporate references to other news sources, such as online news sources?
  • Have the newspaper public interest considerations deterred potential transactions from being pursued?
  • Do you have further views or evidence relating to public sector news and information sources?

The closing date for responses is 31 March.

They should be sent to localmediareview@oft.gsi.gov.uk or by post to: Local Media Review, 9C12, Office of Fair Trading, Fleetbank House, 2-6 Salisbury Square, London, EC4Y 8JX.

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