OFT launches consultation on local news mergers

The Office of Fair Trading has confirmed it is to launch a full consultation on the local media ownership regime next month.

The OFT said today that the review of the existing media merger regime will “inform whether any changes to the regime may be desirable or necessary”.

But it warned that the review was “exploratory” and its recommendations might require “further work to be undertaken” before any changes took effect.

The investigation will look at whether it still makes sense to consider the markets served by newspapers as “self-contained” for competition purposes – effectively ignoring the internet and other national sources of news and advertising.

It will also examine “whether the requirement for a sufficient plurality of views in newspapers in each market is realistic or desirable in the digital age”.

A review of the current rules, focusing on the press, was one of the recommendations in communications minister Stephen Carter’s interim Digital Britain report last month.

Guardian Media Group chief executive Carolyn McCall and Trinity Mirror chief executive Sly Bailey are among the newspaper industry figures calling for a reform of the laws that currently prevent significant consolidation.

“Frankly, time is running out,” Bailey said in response to the interim Digital Britain report last month.

“Regional newspaper publishers are facing the most challenging times in their history, mergers and combinations of newspaper groups offer the only chance of survival for some titles.

“Merger regulations need to change to enable the regional newspaper industry to survive in the digital age, rather than conspiring to strangling it out of existence.”

The OFT has invited “initial views” from interested groups on the scope of the review by 28 February, ahead of a full consultation due to launch in mid-March.

It said it planned to complete the review by mid-April, in time for Lord Carter’s final Digital Britain report which is due in early summer.

OFT senior director of mergers Amelia Fletcher said: “Local and regional media is an important part of the economy which is currently subject to a range of pressures.

“Initially we are asking for views on the key issues the review should focus on.

“Following this we will engage in detail on how the current media merger regime is operating in both protecting competition for relevant audiences and advertisers, and maintaining media plurality.”

The Newspaper Society, which represents the regional newspaper industry, has welcomed the OFT’s review.

NS director David Newell said: “We look forward to the opportunities that Digital Britain will give regional and local media companies to enable them to develop public service content across all media platforms including regional TV news.

“We will meet with the OFT and Ofcom this month and will respond to each of the review stages between now and its completion in mid-April.”

Separately, outgoing GMG Radio chief executive John Myers is to step down from the company early to lead an independent review of the rules governing local content on radio for the Digital Britain report.

Myers will convene a small advisory group to look at whether the current quotas for locally produced programming are “appropriate and sustainable”.

“We know that consumers value local content, particularly on local radio, and that successive governments and regulators have sought to secure this through localness rules,” Myers said.

“It is only right that as we move towards a predominantly digital landscape for radio we consider the appropriateness of the current rules and how local content should be preserved in the future.”

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