Google has come out in support of major consolidation in the regional newspaper industry through the relaxation of media merger laws.
The web giant has made a submission to the Office of Fair Trading, which has been tasked by Lord Carter to examine whether a change to the current rules is necessary.
Google UK managing director Matt Brittin told the OFT: “Google supports the position of many newspapers for the need to allow for a 21st century merger regime, allowing local and regional news services to merge and consolidate in order to create competitive news offerings.”
Lord Carter’s Digital Britain report is due to be published on 16 June. According to the Mail on Sunday, the Local Media Alliance says there will be “a huge amount of merger activity” if the rules are relaxed.
Here’s Google’s letter in full:
Following the recent OFT review of the local and regional media merger regime, Google’s view has has been sought by various stakeholders. As a former newspaperman and now MD of Google in the UK I wanted to add our support to the case for change.
The UK has an advanced online market; consumers and businesses have adopted the internet as a way of doing business more fully than their their US or European counterparts. As a result both individuals and companies spend more money online. There is a greater choice of services, content, information, products, and news on a local and global scale.
One of the primary reasons for establishing the merger regime was to protect local business, essentially local advertisers, from the market power of local media over advertising prices. By ensuring plurality in local and regional media, advertisers were ensured a choice in local publications for their advertising, therefore also having competition on advertising costs between publishers. Competition for consumer attention and for advertising revenue has intensified in recent years and the internet has further accelerated the change. Local businesses now have a range of competitive advertising choices providing a targeted audience, and are able to tap into a global market from their UK base very cost-effectively.
You may know that Google works closely with many newspapers to help them build an online audience and to assist them in making money from targeted online advertising. We are always working to improve our technology so that online users see more relevant advertising, and consequently publishers can earn a greater return on their efforts.
Given the increased access to local and regional news and information for users, and the increased advertising offerings for local businesses, traditional ‘market’ definitions have become less relevant. Google supports the position of many newspapers for the need to allow for a 21st century merger regime, allowing local and regional news services to merge and consolidate in order to create scalable and competitive news offerings, in line with general principles of UK competition law.