Parliament passes Bill to tighten merger rules in media sector, give regulator greater oversight

Parliament passed a Bill on May 7 to broaden the Infocomm Media Development Authority’s (IMDA) oversight of ownership and changes in control in the media sector.

The amendments under the IMDA Bill will also give the authority stronger powers to ensure fair market conduct.

A total of 11 MPs spoke over two days on the Bill, which was unanimously passed in Parliament on May 7.

Currently, only acquisitions, mergers or consolidations between regulated persons (RPs), or between RPs and ancillary media services, require IMDA’s prior approval. RPs are defined as newspaper publishers with newspaper permits or holders of a broadcasting licence.

The proposed changes seek to expand this scope, stating that any person acquiring ownership interests of 30 per cent or more must seek IMDA’s approval.

“The 30 per cent threshold in the Bill serves as a benchmark for when someone would presumably have control over the entity’s decisions and operations,” said Senior Minister of State for Digital Development and Information Tan Kiat How in Parliament on May 6.

For instance, IMDA’s approval would now be required if an entity that is not an RP wishes to acquire 30 per cent or more of Singapore’s pay TV operators, such as SingNet or StarHub Cable Vision, said Mr Tan.

“We are adopting this practice for the media sector,” he added. “We care about who owns and controls regulated persons. These are companies that shape the information environment for our citizens, especially in the age of AI and disinformation.”

“Other forms of corporate structures could similarly hold newspaper permits and their publications may have similar reach and influence, even if the entities do not fall within the narrow definition of a ‘newspaper company’, such as having Singaporean citizen-only directors,” he said.

“The updated definition will allow these entities to be captured as regulated persons.”

Similarly, on the broadcasting side, the current definition of an RP in the IMDA Act covers only holders of broadcasting licences.

“Structures like business trusts that hold broadcasting assets are not covered under the current definition. We are updating the definition to cover such trust structures,” he said.

Amendments under the Bill will also allow IMDA to issue directions to media companies to ensure fair and transparent market conduct and to deliver reliable media services, thereby safeguarding consumers’ interests.

Currently, IMDA’s powers to issue directions to RPs are limited to cases of non-compliance with competition or consumer protection rules.

However, there may be instances where the actions of licensees may result in outcomes that are detrimental to consumers or undermine fair market competition, despite there being no breach of the law, said Mr Tan.

Citing an example in the telecommunications sector, he said it is unfair for consumers if their telco provider abruptly changes the price or terms and conditions of their subscription during the contractual lock-in period.

To protect consumers, IMDA was able to prohibit such practices in 2015 through a direction, he said. The statutory board subsequently formalised the requirements in the Telecom and Media Competition Code.

“IMDA does not have powers today to act in this manner in the media sector,” said Mr Tan, adding that it would need to first revise and re-issue the code of practice before it can act.

“This takes time, and consumers will be worse off during the interim period,” he said. “With this amendment, IMDA can take similar quick and targeted actions for the media sector through the issuance of directions.”

MPs raised concerns about oversight and transparency over new media ownership laws, as well as the need to protect workers.

Workers’ Party Non-Constituency MP Andre Low said the opposition party does not dispute the administrative case for the Bill, but that the argument goes further than that. His fear is that the Bill is being written to foreclose a future in which “genuinely independent media may grow in reach and maturity”.

He said that, today, Singapore’s two main media entities are “both already within the Government’s orbit”, and that extending regulatory powers over them makes “little sense” and does not meaningfully change competitive dynamics.

Mr Low added that his reading of the Bill is that it is about ensuring that no new actor – perhaps a well-capitalised investor or a media group with genuine editorial independence – can build a meaningful presence outside the Government’s reach.

“Think of Apple Daily in Hong Kong or The Washington Post, both funded by individuals with deep pockets of their own and strong political convictions. Jimmy Lai and Jeff Bezos are not politically neutral figures, but their convictions were their own, not the government’s,” he said.

“That is precisely what made their publications independently powerful. They could ask hard questions without needing permission from whoever held office.”

Meanwhile, labour MP Patrick Tay (Pioneer) said the labour movement welcomes the new law, but it is important that the powers it grants are exercised in ways that are pro-competition and pro-worker so that a “market win does not become a social loss”.

He asked that the framework formally incorporate workforce impact alongside market competition impact.

This is particularly important, as in the course of consolidation, employees may be moved to different employing entities involving changes to their roles and job scope, when the new parent group’s competitive model is doing more with fewer people, he said.

With the growing role of social media that disseminates news and shapes public discourse, Ms Cassandra Lee (West Coast-Jurong West GRC) asked if the Bill could be expanded to include the regulation of local content creation and media companies that do not operate like traditional newspapers or broadcasters.

In wrapping up the debate, Mr Tan emphasised that the Bill is not about regulating content, but about market structures, consumer protection and measures to ensure fair access and market vibrancy.

“The amendments act to prevent unfair competition and potential abuse of market dominance by large players that may frustrate the entry and growth of other players in the media sector,” he said, in response to several questions from MPs about whether the Bill facilitates an open media landscape that allows new entrants to grow.

“We certainly recognise that (the) media landscape has transformed and grown significantly with the internet and social media... we’ll continue to monitor developments closely.”

On the power the laws give to the Minister for Digital Development and Information to order the structural separation of a dominant media player, Mr Tan said there are strict legal limits on its use, and that such an order would be a “last resort” after all other regulatory tools have failed.

Three requirements must be met before this order can be used – there must be market conditions in which one player is stopping competitors from providing services, regulators must have exhausted their existing tools and the minister must be independently satisfied that issuing such an order is in the public interest, he added.

In making this assessment on public interest, the minister is required to work within the confines of the law and consider whether the order is necessary or desirable to promote fair and efficient competition in the media sector, among other requirements.

The minister’s discretion remains constrained even after the order is issued, said Mr Tan, and a new section of the law will require the minister to ensure that the directions included in the separation order are proportionate.

“Precisely because this is a serious intervention, it is important that the necessary powers are available should the situation arise. Their existence also sends a strong signal to the market that the Government will act decisively to safeguard fair competition and market conduct.”

On the potential workforce impact, Mr Tan said the Government will continue to support workers through disruptions and transitions.

“In dealing with the telecommunication and media sectors, we encourage unionised companies embarking (on) or undergoing major organisational restructurings to engage NTUC and their unions early, and work closely with them to manage the impact on staff,” he added.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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