Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Hansard source

I thank Senator Parry for the question. I am grateful for the opportunity to place this matter on the record. I do agree that it is a matter of importance that those listening to the debate clearly understand that there are some very significant powers in both of the regulators to prevent breaches of media diversity rules. Those rules of course go to the heart of the cross-media changes. Those rules are that, if a company undertakes a transaction that creates an unacceptable media diversity situation, ACMA has a number of very powerful sanctions at its disposal. Creating what could be termed ‘an unacceptable media diversity situation’ is a criminal offence. It is punishable by a fine of $2.2 million per day, and $11 million per day for companies. The regulator, ACMA, may also seek similar fines via civil penalties, without having to refer the matter to the Director of Public Prosecutions. Obviously, there is a very different onus if the Director of Public Prosecutions is involved in imposing a penalty.

ACMA can issue a remedial direction requiring the parties involved to divest the asset causing the breach—we dealt with that a little earlier—or to do anything else necessary to restore media diversity in the affected licence area. These are very important matters that have been raised, for instance, by Senator Joyce, and I feel that I am not only entitled to deal but also have a duty to deal with the issues that have been raised about what can happen if there is any particular breach. Failure to comply, as I say, involves the risk of both criminal and civil penalties. Under an injunction power to be provided by government amendment—and that was also something sought by the Senate committee, which I have agreed to—ACMA will be able to obtain an injunction requiring a company to divest, or otherwise take action, to remedy any unacceptable media diversity situation.

I think it is also very important that I deal with the role of the ACCC, because clearly the media is subject to two regulators. The ACCC will play a key role, although perhaps a reduced role now that the two out of three structural change is being introduced across all licence areas, in ensuring that potential media transactions are carefully assessed for their impact on competition in relevant markets.

This is separate from, but will certainly complement, measures to protect diversity, including the five-four diversity test and the existing licence and reach limits, which do not change. I think that is worth saying, because there is no suggestion that the existing requirements that mean that you cannot own more than one television station, one newspaper or two radio stations in a licence area will change—and neither will the existing reach limits, which are to 75 per cent of the Australian population.

The ACCC will continue to assess proposed mergers under section 50 of the Trade Practices Act 1974 to ascertain whether the proposed transaction will have the effect of substantially lessening competition in the affected markets or market. The bill will require all mergers involving commercial radio, commercial television and associated newspapers within a regional radio licence area to obtain formal clearance from the ACCC prior to seeking an exemption from the cross-media restrictions from the regulator, the ACMA—the Australian Communications and Media Authority. This will cover those media mergers likely to have the greatest impact on diversity and competition—three-way mergers. Of course, this has now changed, so the ACCC will no longer need to have that particular power, which becomes obsolete with the two out of three change. In the circumstances, I think the ACCC’s powers have been very clearly articulated.

The ACCC has in fact released a paper providing guidance on its approach to potential media mergers. The paper provides guidance on the approach the ACCC will take in determining what markets are affected by a media merger. That is a very important matter that affects the public and the public interest, and the paper provides considerable information on the type of analysis the ACCC will undertake in assessing media mergers and how it will address media specific issues. The key markets the ACCC will be focusing on are advertising, the supply of content to consumers—and that of course includes news and information—and the purchasing of content from content providers.

The ACCC, critically and very specifically, discusses rural and regional markets, particularly with regard to the impact that we have seen of technological advancements on regional media assessments. In the ACCC’s view, rural and regional markets are currently highly localised and that is likely to continue for the foreseeable future. The ACCC notes that regional markets typically depend on a small number of media outlets for local news and information and are generally less well served by new media, such as pay television or the internet, which tend to very much address and complement national markets.

While new media may be available in regional areas, they may not be an appropriate substitute—and I have never claimed they were. I have simply said that they are an emerging and exponentially accelerating force in media and that certainly they will, to a large extent, attract advertisers and no doubt threaten some of that advertising revenue for local media—local newspapers in particular. So the ACCC considers that factors such as these will impinge on media mergers in rural and regional Australia.

But, in response to Senator Parry more broadly, I am very grateful for the question, because I do think that there is a great deal of interest in the role of the regulators. Now that there has been the two out of three structural change to protect diversity, while there is a reduced role for the regulators, they are still a critical part of ensuring that media mergers comply with the provisions of this bill.