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As bidders circle the ‘in-house journal’ of the Conservative Party, research commissioned by Good Law Project suggests Culture Secretary Lucy Frazer will have ‘considerable discretion’ over whether to intervene.
When the Barclay family lost control of the Daily and Sunday Telegraph in June, it fired the starting pistol on a race to control a direct line to members of the Tory Party and set the owners of the Daily Mail, the German tabloid Bild and GB News jostling for position.
With the Telegraph estimated to sell more than 180,000 copies a day, Good Law Project commissioned the specialist in competition law George Peretz KC to examine the safeguards making sure the sale maintains a vibrant and diverse press culture in the UK.
It’s unclear at this stage who will eventually buy Telegraph Media Group, but according to Peretz any purchase will be a “relevant merger situation” under the Enterprise Act 2002, because of the group’s annual turnover of £70m.
The Competition and Markets Authority has “wide powers” to block mergers or break companies up after a merger, he continued, if they are “more likely than not to lead to a substantial lessening of competition”.
With the Daily Mail and General Trust currently making up around 39% of UK newspaper sales, any purchase of the Telegraph – which sits at 5% – would push the group close to 50% of the market. Peretz went on to add that there would be “real arguments” about how the relevant market should be defined.
“It may be argued that the correct economic market is narrower than all UK newspapers,” he explained, “and should consist only of ‘broadsheet’ titles.” This would eliminate any overlap between the mid-market Daily Mail and the broadsheet Daily Telegraph. “It may also be argued that the market is wider than newspapers and should include other sources of news, in particular online news websites (such as the BBC) or even social media. That would suggest that the ‘real’ market shares of Telegraph Media Group and any potential purchaser are much lower than the figures quoted above.”
The Act also allows the Culture Secretary, Lucy Frazer, to intervene in a sale if it could harm the “accurate presentation of news and free expression of opinion in newspapers”, or the “plurality of views in newspapers”.
The Secretary of State can also specify additional grounds to intervene, Peretz said, and has “considerable discretion” in deciding whether or not to act.
“In contrast to broadcasting,” he added, “where there are various restrictions on ownership and requirements, for example, to be a fit and proper person before holding a licence, there are no equivalent rules requiring a newspaper owner to hold a licence or to be a fit and proper person.”
Good Law Project will watch how the sale develops – we’re not ruling out an intervention to protect the public interest in media pluralism and a competitive market.