Fri, Nov 30, 2012 - Page 8 News List

Merger deal threatens diversity in media

By Flora Chang 張錦華

The Next Media Group buyout has led to a wave of protests. The Fair Trade Commission (FTC) will be the first institution to scrutinize the deal. The question is how it should determine whether the overall economic benefit is greater than the negative impact of restrictions on competition. An obvious problem is that if the deal is approved, Apple Daily and Want Want China Times Group will have an estimated 50 percent share of the national newspaper market. The public is now beginning to worry that 25 years after martial law ended, Taiwan’s free and diversified society will once again face a monolithic media market lacking any diversity of opinion.

Concern has also grown because the people behind the takeover are among the richest people in Taiwan and China, with stakes in financial holding groups, have been involved in cases of breach of trust and fraud, represent companies with a record of violating environmental security and trampling on media independence and have used the state apparatus for their own private purposes. The commercial interests of everyone in this group are strongly affected by China’s crony capitalism and the Chinese government’s strict control on the freedom of expression and suppression of human rights.

The FTC’s failure to consider the special nature of the media industry when handling media mergers and deals is already having serious consequences — Want Want China Times Group’s purchase of China Network Systems (CNS) cable TV services was just a foretaste of what is to come. When approving Want Want’s purchase of CNS, which has a 30 percent share of the market, one wonders if the FTC considered the fact that CNS can directly influence which satellite channels may continue to operate. Such a vertical monopoly harms fair competition in the media industry as well as consumer interests.

Moreover, while industrial mergers focus on synergy, synergy in the media means the destruction of diversified opinion and freedom of expression. Using Want Want China Times’ acquisition of CTi TV as an example, Taiwanese communications and economics academics have published studies showing that the news produced after the merger have clear and strong tendencies toward being beneficial to the company and have a more narrow focus.

Even more serious, the merger between two major newspapers that will follow on the acquisition of Next Media will probably result in a market share of 50 percent. One extremely likely synergy could be the collective selling of advertising by all media outlets belonging to the group, which would lead to price competition or even veiled coercion, incentives or other inappropriate methods to intimidate weaker or dissenting media outlets. This could result in even more media outlets being sold off, going out of business or resorting to more vicious methods of competition using even lower and more sensationalist methods. Is this really in the interest of consumers?

One would think that a fair competition authority that is familiar with market competition would have a good understanding and knowledge of the existence of such methods instead of approving a deal and appending conditional requirements to limit the effects of media synergies.

The nation’s ability to maintain a relatively independent, free and diversified media environment is under attack. I hope that the members of the FTC do not want to go down in history as the people who destroyed Taiwan’s freedom.

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