Concentration of Media Ownership: Restrictive Safeguards



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Concentration of Media Ownership: Restrictive Safeguards

Neha Khurana

Media is a very strong and powerful medium of communication, collection and dissemination of information and entertainment among the people. It is an integral part of the democracy, and serves as a bridge between the government and the people. It is a most powerful tool to spread news, views and facts among the masses, one can easily say that, one who controls the media can control the views of the people. Thus the independence, impartiality, and plurality is very important to avoid the influence of the vested interests on the media. Political parties and Corporate houses either directly or indirectly through surrogates control newspapers, TV channels and TV distribution systems. Such TV channels and newspapers would, obviously, promote the leaders and propagate the agenda of these political parties and corporate houses. The inherent conflict of interest which arises from uncontrolled ownership in the media sector gives rise to manifestations such as paid news, corporate and political lobbying by popular television channels, propagation of biased analysis and forecasts both in the political arena as well as in the corporate sector, and irresponsible reporting to create sensationalism. These manifestations are even more lethal where the ownership and control rests with the entities which have both business and political interests. Such ownership and control is not uncommon in the country1.

The control over media outlets can impact the news and views carried by a media outlet is an international phenomenon is clearly brought out in the 1st Report of the Select Committee on Communication (House of Lords) UK. As has also been cited in the CP2, this Report identifies four methods by which ownership can impact news output:


  1. Direct intervention by an owner;

  2. Indirect influence of an owner through the appointment of an editor who shares his view;

  3. The influence of the business approaches that an owner can take; and

  4. Different approaches to journalism.

Control

An entity (E1) is said to ‘Control’ another entity (E2) and the business decisions thereby taken, if E1, directly or indirectly through associate companies, subsidiaries and/or relatives:



  1. Owns at least twenty per cent of total share capital of E2. In case of indirect shareholding by E1 in E2, the extent of ownership would be calculated using the multiplicative rule. For example, an entity who owns, say, 30% equity in Company A, which in turn owns 20% equity in Company B, then the entity’s indirect holding in Company B is calculated as 30% * 20%, which is 6%.; Or

  2. Exercises de jure control by means of:

  1. Having not less than fifty per cent of voting rights in E2; or

  2. Appointing more than fifty per cent of the members of the board of directors in E2; or

  3. Controlling the management or affairs through decision-making in strategic affairs of E2 and appointment of key managerial personnel; or

  1. exercises de facto control by means of being a party to agreements, contracts and/or understandings, overtly or covertly drafted, whether legally binding or not, that enable the entity to control the business decisions taken in E2, in ways as mentioned in (b) (i) (ii) and (iii) above3.

Suggestions:

There exist a grave need for a comprehensive evaluation of the legislative and legal framework in order to establish a robust institutional mechanism for the long term. The Author, therefore, suggests that a Commission, perhaps headed by a retired Supreme Court Judge, be set up to comprehensively examine the various issues relating to the media, including the role and performance of various existing institutions, and the way forward. News and Current Affairs genre is of utmost importance and direct relevance to the plurality and diversity of viewpoints and, hence, should be considered as the relevant genre in the product market for formulating cross-media ownership rules. The Herfindahl Hirschman Index (HHI) be adopted to measure concentration in a media segment in a relevant market. The rules and policy framework shall be reviewed in every three years. In order to maintain the internal plurality the entities like political bodies, religious bodies, urban, local, panchayati raj, and other publicly funded bodies, and Central and State Government ministries, departments, companies, undertakings, joint ventures, and government-funded entities and affiliates to be barred from entry into broadcasting and TV channel distribution sectors4.




Research Associate (Manual Scavenging Laws and Policy), Gujarat National Law University (GNLU).

1 Consultation Paper on Issues relating to Media Ownership; Available at http://www.trai.gov.in/WriteReadData/ConsultationPaper/Document/CP_on_Cross_media_%2015-02-2013.pdf accessed on 30 November, 2015.

2 ibid

3 Telecom Regulatory Authority of India, Recommendations on Issues Relating to Media Ownership, August 12, 2014

4 Recommendations on Issues Relating to Media Ownership. Available at http://www.trai.gov.in/WriteReadData/Recommendation/Documents/Recommendations%20on%20Media%20Ownership.pdf accessed on 30 November, 2015.



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