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Merger deal threatens
diversity in media
By Flora Chang ±iÀAµØ
The Next Media Group buyout has led to a wave of protests. The Fair Trade
Commission (FTC) will be the first institution to scrutinize the deal. The
question is how it should determine whether the overall economic benefit is
greater than the negative impact of restrictions on competition. An obvious
problem is that if the deal is approved, Apple Daily and Want Want China Times
Group will have an estimated 50 percent share of the national newspaper market.
The public is now beginning to worry that 25 years after martial law ended,
Taiwan¡¦s free and diversified society will once again face a monolithic media
market lacking any diversity of opinion.
Concern has also grown because the people behind the takeover are among the
richest people in Taiwan and China, with stakes in financial holding groups,
have been involved in cases of breach of trust and fraud, represent companies
with a record of violating environmental security and trampling on media
independence and have used the state apparatus for their own private purposes.
The commercial interests of everyone in this group are strongly affected by
China¡¦s crony capitalism and the Chinese government¡¦s strict control on the
freedom of expression and suppression of human rights.
The FTC¡¦s failure to consider the special nature of the media industry when
handling media mergers and deals is already having serious consequences ¡X Want
Want China Times Group¡¦s purchase of China Network Systems (CNS) cable TV
services was just a foretaste of what is to come. When approving Want Want¡¦s
purchase of CNS, which has a 30 percent share of the market, one wonders if the
FTC considered the fact that CNS can directly influence which satellite channels
may continue to operate. Such a vertical monopoly harms fair competition in the
media industry as well as consumer interests.
Moreover, while industrial mergers focus on synergy, synergy in the media means
the destruction of diversified opinion and freedom of expression. Using Want
Want China Times¡¦ acquisition of CTi TV as an example, Taiwanese communications
and economics academics have published studies showing that the news produced
after the merger have clear and strong tendencies toward being beneficial to the
company and have a more narrow focus.
Even more serious, the merger between two major newspapers that will follow on
the acquisition of Next Media will probably result in a market share of 50
percent. One extremely likely synergy could be the collective selling of
advertising by all media outlets belonging to the group, which would lead to
price competition or even veiled coercion, incentives or other inappropriate
methods to intimidate weaker or dissenting media outlets. This could result in
even more media outlets being sold off, going out of business or resorting to
more vicious methods of competition using even lower and more sensationalist
methods. Is this really in the interest of consumers?
One would think that a fair competition authority that is familiar with market
competition would have a good understanding and knowledge of the existence of
such methods instead of approving a deal and appending conditional requirements
to limit the effects of media synergies.
The nation¡¦s ability to maintain a relatively independent, free and diversified
media environment is under attack. I hope that the members of the FTC do not
want to go down in history as the people who destroyed Taiwan¡¦s freedom.
Flora Chang is a professor at National Taiwan University¡¦s Graduate Institute
of Journalism.
Translated by Perry Svensson
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