The recommendations relating to the newspaper industry in the final report of the Competition and Mergers Review group will have profound implications for the future expansion of Independent News and Media and its associated companies if implemented.
The changes recommended would allow the Minister for Enterprise, Trade and Employment, Ms Harney, to consider interests held by a company in various media when deciding whether to approve a merger or takeover of a newspaper. This would mean the Minister could take account of the Independent Group's interests in cable television and telecommunications if it proposed to acquire another newspaper.
The report also makes recommendations on control of newspapers by means other than shareholding. These recommendations are designed to cope with situations such as the control exercised by the Independent Group over the Sunday Tribune through its 29.9 per cent shareholding and its loans to the Sunday title. However, Department officials say if this measure were introduced, it would not apply retrospectively.
The issue of below-cost selling of newspapers - there have been allegations in the past that certain UK-based publications were engaging in this practice in the Republic - was not considered by the review group, as it did not form part of its remit.
The Tanaiste, Ms Harney, said yesterday that the group's recommendations had "very significant" implications for the newspaper industry and she hoped to be able to bring proposals for legislation to the Cabinet by early autumn at the latest. "These recommendations are among the most important in the report. Choice and diversity is very important in the media industry. This is not a report that's going to sit on my shelf and gather dust. It's going to be acted upon."
Three recommendations contained in the report of the 1996 Commission on the Newspaper Industry were referred to by the group. These recommendations covered cross-media ownership, the protection of diversity in the newspaper market and the acquisition of control of newspapers by means other than the purchase of shares. The group was asked by the Tanaiste to report on how these recommendations could be taken into account in the context of mergers and competition law.
The group said new legislation could allow the Minister to take account of "the strength and competitiveness of the indigenous newspapers" when considering a proposed merger or takeover in the media market, as requested by the Newspaper Commission.
The Minister would also be allowed to consider "the plurality of ownership, the plurality of titles, the diversity of views in Irish society [and] the maintenance of cultural diversity."
In a submission to the group, the Competition Authority expressed concern that some of these criteria were concerned with "protecting competitors rather than competition".
The group says it is "troubled by the prospect of incorporating a principle into mergers legislation which expressly requires that considerations of nationality may influence the outcome of the mergers approval process".
roddyosullivan@ireland.com
