It’s News Glastonbury!

Yes, it’s the big day. Rupert and James Murdoch, and Rebekah Brooks all face questioning by MPs in the Select Committee we’ve all been waiting for. Leave aside the fact that almost none of us could confidently point to any other Select Committee hearing or what happened in it, apart from, possibly that of Andy Hayman a couple of weeks ago. What, you don’t know who he is?

As Charlie Brooker neatly coined in a tweet a little earlier on – today is News Glastonbury. A grotesque festival for news and media people, politicians and pub bores.

It will be just like Glastonbury. Uncomfortable – there are already reports of queues forming inside the House of Commons. Attendees and spectators having naive hope of life changing excitement – oh, yes. Performances from the headline acts likely to be disappointing – you can bet on it, we aren’t going to see Rebekah Brooks rending her hair or Rupert Murdoch getting out a samurai sword and ritually sacrificing his son for having brought dishonour upon him before disembowelling himself on live TV.

Are we going to hear about how momentous it all was endlessly for the coming weeks and months? Nothing is more certain.

UPDATE

What could be more Glastonbury than a crusty with a shaving foam custard pie? Other than a crusty with a shaving foam custard pie who is wearing a jester hat.

I’ve been working so haven’t been able to watch the proceedings live, but, apart from some good forensic questioning by Tom Watson MP, it looks like the Select Committee might have been better off just letting the Murdochs read their opening statement (oh, looks like they did at the end).

http://bit.ly/pqW2en

News Corp’s share price rising steadily throughout the session gives an interesting alternative focus group response to how the Murdochs have performed.

Unpalatable Truths about Us

Hacking voicemails and paying police officers to get stories for the newspapers. Plagiarising other writers’ interviews to polish your own articles. The sad and unpalatable truth is that most people simply don’t care that much about any of this.

Of course they ought to care, just as I ought to do more exercise and eat more vegetables. It doesn’t change the fact that they don’t.

The reality is that even though there have been some momentous changes like News Corp dropping its bid for BSkyB, the closure of the News of the World, the resignation of Rebekah Brooks, the bipartisan political support for criminal and civil investigation and inquiry into the methods of the media, the suspension of Johann Hari and investigation by the Orwell Prize committee and so on, most of these will have been of minimal note to the vast majority of the population. Even on twitter, a self-selecting minority of the more engaged part of the online population the retirement of Pam St Clements from her role as Pat Butcher in East Enders had a higher profile than hackgate at its height.

In part this might be down to a continuation of the “well they would do wouldn’t they” approach to the wider world. When the bid for BSkyB first made the news I remember being mildly surprised that News Corp didn’t already own a majority stake in BSkyB – it had been portrayed by most of the rest of the media as being controlled by Rupert Murdoch for years. From the slight experience I’ve had in being interviewed for comments by the press it wasn’t that big a surprise to hear that Johann Hari hadn’t in fact elicited nice, fully formed quotes from his interviewees (a small confession here, as one of the editors of my Sixth Form College magazine I published a largely fictional interview with a fellow student who worked on the theatre lighting and effects – someone else had gone to interview him but hadn’t really managed to get much out of him so I just made it up, ironically the same guy has now become something of a big name in lighting and effects so I missed out there). It was more of a surprise to find so much evidence of actually cribbing large chunks from other writers and interviewers just because it seems pretty unnecessary.

That tabloid journalists do pretty much anything to get a story and are as amoral in their methods as they are moralistic in their published tone was probably the biggest non-story of them all. Even though, of course, things like hacking into Milly Dowler’s voicemail and that of victims of 7/7 or 9/11 managed to lower a bar that most would have thought to be already unlimboable. That said, Will Self has (as ever) an interesting take on how ordinary people are now considered fair game for being mistreated in the same way as celebrities: http://bit.ly/nmhIrY

Bent coppers have been a staple of British life for years. They can be banal, as the ones involved in the allegations around the investigation of hacking claims. Or they can be strangely sympathetic, like Gene Hunt in Life on Mars (in my opinion rather less interesting when rather less corrupt in Ashes to Ashes). But they’re a tiny minority of the actual Police forces of the country, most of whom do unpleasant work at antisocial hours in a professional and decent manner. The chance that slipping a couple of hundred quid to the officer who stopped you for a breathalyzer test might work rather than get you arrested for attempting to bribe the officer is so small that you don’t hear of anyone even trying it.

Politicians doing anything they can to maintain their power and prestige or to feather their own nests? After the MPs’ expenses scandal and everything that was already known about how close MPs and party leaders have been to media moguls, it just isn’t news. Sarah Brown organising Rebekah Brooks’ 40th birthday party is not more outrageous now than it was a week ago, just as her husband giving his first Sun interview to the man who had apparently so upset him and his wife over breaking the story of his son’s cystic fibrosis wasn’t. They’re not news – indeed the only new thing is how weird it is that they think they deserve sympathy now for something they were way more forgiving of than most people would have been, or that even a jaded populace would think it right that a serving Prime Minister didn’t dare to take on the might of the press.

So, hard to swallow though it may be, these developments are a big deal that most people will just shrug and say, “Big Deal!” to. Ironically, the people who do care about this stuff are most likely to be amongst the perpetrators or to know or care about them. The public might shrug a bit but the politicians, journalists and other establishment figures want to feel good about themselves and what they do. Enough will feel shame because of the judgement of their peers and their unavoidable blindness to what ordinary people think – unavoidable because they don’t want to sound condescending or cynical (cardinal sins in public life except for those with the flair to carry it off, like, say, Brian Sewell). So, they’ll clean up their act, a bit, make a lot of noise over it and ultimately things will quieten down with a feeling that things have been sorted out, until the next time.

Back to the Eighties? No, more like the Seventies

The normally arcane world of Competition Law and merger control has been brought to centre stage by the public and political reaction to the allegations of illegality in the journalistic methods of News International newspapers. This has happened in parallel with the regulatory process for competition clearance of NI’s proposed acquisition of the 61% of shares in BSkyB that it does not already own.

Many people have been drawing facile parallels between the current economic and political conditions and those of the nasty old 80s under Thatcher. However, in the context of the NI/BSkyB merger, the clamour for Ministers to step in and stop it is more like the 70s. What we are seeing is a falling out of favour of the idea of looking at economic transactions on the basis of an economic test and a desire to look at transactions on the basis of a more political idea of what is in the public interest. This turns the clock back to a very different approach to government and the economy which culminated in the 1970s.

Merger control in the UK has, over the past 25 years or so developed to be almost exclusively about economics and competition but it started out as being much broader than that. The merger control regime in the UK started with the Monopolies and Mergers Act 1965, a piece of legislation brought in by Harold Wilson’s government but based upon a White Paper presented by Edward Heath as President of the Board of Trade in 1964. The system that this introduced placed the responsibility for deciding whether mergers of a particular scale (based on turnover of the target – the “turnover test”) or impact on a market (based on whether it resulted in market share in excess of 25% – “the market share test”) should be allowed upon Ministers. There was also a special test for newspaper mergers.

This was then updated by the Fair Trading Act 1973 (when Heath was Prime Minister). The broad process followed was that if a merger qualified under any of the tests, the relevant Minister (usually a Minister or the Secretary of State in what is now BIS) would, on the basis of his opinion whether it might be contrary to the public interest decide to refer it to the Monopolies and Mergers Commission (“the MMC”). Newspapers had a separate test and a mandatory requirement to be referred if they fulfilled the terms of the test so that all cases where 2 or more newspapers with a combined circulation of over 500,000 had to be referred to the MMC. The MMC would then have a period of time to investigate and report on whether the merger would be contrary to the public interest and if there were any remedies which would enable it to go through without harming the public interest in that manner. The Minister would then make a decision on whether to allow the merger based on the MMC’s report but with the ultimate discretion as to whether to follow or disagree with the MMC. The conception of public interest was very broad and could include such matters as the impact on employment, the “fit and properness” of the acquirer, impact on national security and so on.

Overall this can be seen as part of the corporatist view of the State and Government, with Ministers having the power to be very interventionist in determining whether mergers ought to be allowed with a great deal of political discretion. Newspapers mergers were seen as needing even more regulation and automatic scrutiny other than in cases where the target was likely to go bust or was small (under 50,000 circulation). Around the same time legislation was also in place to look not only at monopolies and restrictive practices but also to control prices of products as well as to enable strategic businesses to be nationalised and to prevent foreign takeovers generally. The Secretary of State for Trade and Industry had a lot of levers to pull if he wanted to direct how industry operated and what decisions business owners could make about acquiring competitors.

Unsurprisingly this approach drastically lost favour in the 1980s with much of this legislation being repealed. Mergers remained subject to the Fair Trading Act regime but the decision-making process became more and more depoliticised over time as a matter of policy. It was semi-formalised as the “Ridley Doctrine” (under Nicholas Ridley as Secretary of State in the late 80s – this formalised the approach of Norman Tebbit earlier in the decade) which took the policy approach that the only public interest criterion that Ministers would refer mergers on other than the protection of national security was that of the impact on competition. This was a self-denying ordinance as Ministers still retained statutory powers to revert to the broader conception of the public interest test. This was consistently applied by both the Major and Blair governments and culminated in the Enterprise Act 2002’s merger control provisions. The Enterprise Act took the decision-making power away from Ministers entirely other than for reasons of national security or other (then undefined) public interest considerations, such considerations needing new secondary legislation to be brought in. Media merger provisions remained in place, but again, with defined criteria upon which mergers could be blocked. The aim was to depoliticise the process almost entirely, retaining just a residual power for emergency use (eg the SI introducing a public interest in the stability of the banking system which was used to enable the Lloyds/HBOS merger to be approved without a reference to the Competition Commission “the CC” – the successor to the MMC).

Although media mergers have always been considered to be deserving of more detailed scrutiny than “ordinary” corporate M&A this has also always been constrained by the particular, detailed processes put in place under the legislation from 1965 onwards. The debate and vote to be held later today in Parliament to urge News International to withdraw its bid for BSkyB go some way beyond this. Particularly as the the clear expectation is that the Secretary of State (Jeremy Hunt, who took Vince Cable’s place after the latter, ironically in a sting by The Daily Telegraph, disqualified himself from doing the role impartially) should block the merger and reject the CC’s approach if it comes to the “wrong” conclusion when inconveniently applying the law correctly.

It is right that MPs debate major issues such as those raised by the allegations into hacking and other illegal or unethical practices. It is also right that, as said by the Prime Minister in today’s PMQs,  the NI/BSkyB deal cannot be looked at in isolation from the investigation into those allegations. As representatives of the general public, MPs should surely be able to express the public’s concerns about whether NI should be allowed to acquire BSkyB and this pressure may work on NI to drop its bid – businesses will change their strategies if they are likely to cause them reputational harm, just as eg HSBC did in divesting its sub-prime business in the US prior to the banking crash, following public and investor disquiet at them being involved in that end of their market.

However, this should not be seen as a green light to move back towards having more general political control over decisions on corporate transactions. It would be a seriously retrograde step to see the extreme case of NI/BSkyB as a justification for returning to a corporatist view of government’s role in business. Allowing the Lloyds/HBOS merger on public interest grounds in the face of competition concerns did not achieve its intended aim of securing the banking system. Ministers and their advisers are not good at making commercial decisions and should not be encouraged to do so. The broad agreement on this built up over the last three decades should not be lost – it was one of the good lessons from the 70s. The public interest criteria available for looking at media mergers, the fitness of proprietors and media plurality are sufficient in themselves and do not need a further political override, however tempting that may be in the individual case.

Update

Pretty much on publishing this NI has decided to pull out of its bid for BSkyB as a result of the public pressure against it. It will be interesting to see if it is revived. Ironically, the outcome of Lord Justice Leveson’s inquiry could make a future bid by NI more likely to succeed. For example, if the illegal methods are found to be rife across the media it will be less easy to single NI out. Even if they are focused on NI, the introduction of any new newspaper content regulation and other remedies will allow NI to draw a line between previous conduct and its position at the time of a future bid. There is also a serious risk of the public suffering outrage fatigue – after a year or more of the papers writing about the thing they are most interested other than celebrity tittle-tattle, themselves, the story might have played itself out. Much like the rightful anger over MPs fiddling their expenses didn’t result in lynchmobs or headlines for those who have gone to prison for doing so.