Monday, July 18, 2011

Murdochs, Market Power and Society

By Olu Akanmu

There has been widespread condemnation of the phone hacking scandal of News of the World, one of the papers in the stable of Rupert Murdoch, the world’s biggest media mogul who controls leading newspaper titles in the UK such as the Times, the Sun and Sky news and significant interest in the BSkyB cable network. It is a clear breach of professional journalistic ethics to hack into the phones of private citizens, corrupt police officers to get privilege information about private citizens, some of whom were grieving their lost ones in murder cases. If these allegations are true, News of the World brand of journalism crossed the boundary of investigative journalism to criminal behavior. The International Press Institute (IPI) and the Newspaper Proprietors Association of Nigeria (NPAN) have condemned the journalistic practice of News of the World calling it a failure of law enforcement and not a failure of press freedom. While endorsing the British government judicial inquiries into the affair, they caution that it should not be used for revenge and the undermining of the long robust British tradition of press freedom which could cause a ripple effect globally as many countries hold Britain and its democratic institution of free press as a standard for their own society.

We agree with IPI and NPAN. We however wish to state that this Murdoch saga as it is unfolding is wider than the subject of press freedom. It also bothers on the subject of how public good and the efficient functioning of markets to deliver such public goods such the free flow of information, can be potentially compromised by special commercial interest when they wield significant market power. As all democracies join the British to debate the lessons of the unfolding Murdoch/ News of the World saga, it is critical that we situate the lessons within such broader context. The British with their eyes open, watched Murdoch’s News Corporation over years build a media empire that ended up controlling about 30% of the British Media Market. Rupert Murdoch became the media Capone courted by the right and left of the British political establishment from Margaret Thatcher to Tony Blair and David Cameron. They had no choice. Such was the combined market power of his newspapers that any politician will ignore him and his interest at their peril. Alastair Campbell, Tony Blair’s celebrated Director of Communication reflecting on this saga wrote in the Financial Times “that for all of us, at times, media support was something we courted at the expense of positions of principle on media issues”. He could just have added that they, the political establishment on the right and left compromised public good on the altar of political expediency. So powerful was the combined market power of Mr. Murdoch’s media titles that they could seemingly get away with anything, with such impunity because the institutions of society such as the parliament and the police could not discipline them. What now seemingly look like a political backlash on Mr. Murdoch is actually an attempt by the politicians to free themselves of the subservience they have subjugated themselves to for many years.

We do not care about the politicians, their subservience and their political games. We however do care, when the institution of free press, a key pillar of society’s democratic tradition becomes captured by private commercial interest, wielding its power to determine the information that society knows and how it should know it. This private commercial interest in the media, with significant market power can even determine what the truth for society should be, which is usually is own selfish version of truth. The institution of free press must remain unfettered if democracy is to function properly. The press as an institution must be protected from being captured by the government in the liberal traditions of great democracies. The press is the modern day equivalent of the public square, the “forum” in Rome where plebeians, who may not sit in the Senate, can hold their own discussions, express their feelings and pass their own resolutions which the nobles in the Senate must note, if they would avoid strife in society. To this end, press freedom is written into liberal democratic constitutions to provide another check and balance on the powers of the executive, the legislature and the judiciary. Hence, the press is called the fourth estate of the realm. What the founders and philosophers of liberal democracy might not have however envisaged is the evolution of capitalism and the media as a special industry, where private commercial interests could become so powerful as to capture the press and makes it un-free. In essence, while they were trying to protect the institution of free press from being captured by government from the front-door, what we have today in Britain is the capture of the press by private commercial interest from the back door, a la Mr. Murdoch’s Newscorporation.

What is the solution to this problem? How do we protect the market economy and at the same time protect the press from being captured by governments and private commercial interests? We do not support the current under-current in Britain to introduce stronger legislations to regulate the press. We support free and self regulation of the press. The British politicians must not use the current phone-hacking scandal to reverse the gains of the centuries of tradition of free press in the United Kingdom and gag press freedom. The press must however recognize that freedom is a privilege that comes with an obligation to be more responsible, to practice ethically and uphold highest tenets of professional behaviour. The press both in Britain and Nigeria must therefore do a new soul searching with a view to raising its ethical and moral standards, to win stronger public confidence as the true public square for the free expression of all opinions in a democratic society.

To prevent the press from being captured by private commercial interest with a significant market power, as we have in Britain today, Competition Policy laws and regulations will need to be strengthened. It is the weakness of the British Competition Policy and regulations that have led to a situation where one private commercial interest (Mr. Murdoch’s Newscorporation) controls about 30 percent of the British media market. It should be noted that we do not even have a Competition Policy in Nigeria. If a United Kingdom, with a Competition Policy and regulation could end up with a Mr. Murdoch phenomenon, there is probably a long-term risk to press freedom in Nigeria from private commercial interests when the media industry gets consolidated in the future due to the imperative of scale and size efficiencies.

Nigeria needs to enact a Competition Policy that will ensure that key industry markets such as media, telecommunications, financial services and power function well guarding against the emergence of players with significant market power who could use such powers to stifle competition and the efficient functioning of markets. The only exception to such Competition policy and regulation would be when national companies need to build scale and size from home to compete abroad. We will like to state that the concept of significant market power should not necessarily be about whether market players can influence prices by stifling competition. As in the case of the British media market, the concept of significant market power should also be about whether market players are powerful enough to thwart or stifle the delivery of public good, in their own interest, which in this case is the free flow of information in a democratic society. The unfolding events in the British media hold important lessons for our own democracy and our market economy. We should all watch it closely.


idiareno said...

when i reflect on the sweeping empire Mr Murdoch has on roster i wonder if he actually is hands on enough to set agenda for each and every institution?

Is it not a case of attributing so much power to one man than is really possible? But then he must ultimately take responsibility which he has indeed done.

I fear the tendency of public institutions to go overboard in asking for retribution when in deed and fact many of them are behind the scene actors in the unfolding drama...

Lere Baale said...

The role of market dominance of Murdochs Media Empire can not be separated from the influence it wielded and the temptation to keep that market dominance through unethical approach. However the UK must thread with caution not to use this opportunity to inhibit press freedom which has helped in developing democratic institutions in the country.

Obi Asika said...

Interesting piece and perspective, it would seem the wolves are out for mr murdoch. My point is this man has spent 50 years building this empire which employs over 50k people and generates over U$D39bn per annum. While the issues are serious we all know this has been happening for years in terms of that uneasy relationship between Media and Govt and i believe it is a neccessary evil. The Uk would do well not to over-regulate its Free press as this is part of what has given them such a rich history. In Nigeria it would be intelligent to guard against media domination especially with the crassness and narrow-mindedness of some of our poltician-businessmen.

Sade O. said...

Power is nothing without control.
The unfolding saga threatening to crumble one of Britain’s biggest corporate behemoths offers useful lessons in corporate ethical responsibility and self-governance in private-public enterprise. It also again brings to the fore the subject of ethics, fair dealing and morality in businesses while serving as a gentle reminder organizations must situate their strategic relevance within the context of their moral responsibilities to society. In the case of Rupert Murdoch, he couldn’t tell where ethics began and profits ended and the hunter ended up becoming the hunted.
In the coming days, we would need to take useful lessons from the Murdoch saga and maintain an unequivocal sense of responsibility and diligence in setting an agenda for ethical conduct for media owners and their handlers. In doing this, we must be mindful of the fact that freedom of the press does not necessarily guarantee a sense of responsibility unless there is an ethical framework to check potential excesses and abuses inherent in the Nigerian media plagued as it were by political partisanship and conflict of interests engendered by businessmen- politicians with vested interests in media ownership.
A situation where the big players in the media industry swallow the small by raising the bars on market entry through unprivileged access to information will stifle growth and lead to abuse if allowed to remain unchecked.

joe said...
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