The present concentration of ownership in the Irish newspaper industry must give rise to serious concern. In March 1992 the Competition Authority examined the situation with regard to the Sunday newspapers when there was a proposal by Independent Newspapers to increase its holding in the Sunday Tribune from 29.9 per cent to 53 per cent. The Competition Authority recommended against that increased shareholding, and I readily accepted their recommendation and did not allow the proposal to go ahead.
Nearly three years later, we find that the situation has deteriorated significantly from the point of view of concentration.Although it did not increase its nominal shareholding in the Sunday Tribune, it is scarcely now disputed that the Independent Group controls the Sunday Tribune through its shareholding and its very extensive investment through loans which are, presumably, supported by debentures. The recent acquisition of 24.9 per cent of the Irish Press Group by the Independent Group cause further problems because, while formal approval may not be necessary for the acquisition of that percentage of the equity, the fact that it is also accompanied by a substantial loan from the very start indicates that the same degree of control over the Irish Press Group will be exercised by the Independent Group as is now exercised over the Sunday Tribune. The net result is that the Independent Group now exercise effective control over about 97 per cent of the indigenously published Sunday papers. The only exception is the Sunday Business Post which has a small circulation of between 25,000 to 30,000. The same group now effectively controls three of the country's five daily newspapers and the two national evening newspapers, if one excludes The Echo in Cork which has a local circulation.Only The Irish Times of the Dublin-based national dailies will not be under the control of the Independent Group.
What is important is not the nominal shareholding in companies such as the Tribune and the Press but rather the exercise of effective control. Since 1992 this has become much the more important consideration in European Union competition law as a result of the decision in the Gillette-Wilkinson Sword case and similar cases.
It is patently undesirable that in this country such dominance should be allowed in the major organs of printed public opinion and in news gathering. The concentration or dominance is not just confined to editorial power, it also extends to the commercial power that can be wielded through special advertising deals that put the few remaining competitors of the Independent Group at an enormous disadvantage. To allow the situation to continue is unacceptable and when the Competition Authority has reported to the Minister arising from its current investigation into this question, the Minister should take steps to break up what is effectively a monopoly in Sunday, evening and daily newspapers and cause Independent Newspapers to divest itself of certain of its interests in this field.
The dangers inherent in concentration of ownership in newspapers was recognised by me as far back as 1978 when, after the passing of the Mergers, Take-overs and Monopolies (Control) Act of that year, I made an order under the appropriate section applying the provisions of the Act to all transactions in newspapers and magazines in Ireland, even if they fell below the threshold that was appropriate for notification. I felt it necessary to do this because of my particular concern about the provincial market where in that year the Independent Group owned 16 titles, apart from its national titles. The order prevented it from acquiring any other provincial titles. If it had not been made, I have no doubt that Independent Newspapers would now own most of the provincial newspapers and would have closed many of them.
A further factor to be borne in mind is that Independent Newspapers through its shareholdings in Princes Holdings Limited has a significant grip on television distribution locally. This includes the right to make and transmit local programmes and while this has not been of great consequence so far, it can and will become of consequence in the not too distant future. This is clearly a case where the national good requires the Minister to exercise his powers under the Competition Act, 1991 to break up a monopoly.
I am not critical of the Independent Group which is commercially successful and whose foreign investments are to be commended. It is most welcome to make further investments in this country as long as it keeps away from the newspaper, magazine, radio and television sectors where the necessity to maintain disparate control and diversity of opinion is vital for the wellbeing of the country and its people.
