Government Vows to Ban Foreign State Control of British Newspapers Amid Telegraph Merger

Mergers that give a foreign state influence or control of British newspapers and news magazines will be banned under the plans.
Government Vows to Ban Foreign State Control of British Newspapers Amid Telegraph Merger
In this photo illustration coverage of the State Funeral of Queen Elizabeth II is seen on the front page of Britain’s The Daily Telegraph newspaper in London, on Sept. 20, 2022. Rob Pinney/Getty Images
Lily Zhou
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The government has vowed to introduce new legislation to ban foreign states from controlling British newspapers and magazines.

It comes after the communications and competition watchdogs reported to the government on their investigation of a proposed UAE takeover of the Telegraph titles.

Speaking to peers in a debate on the Digital Markets, Competition, and Consumers Bill, Lord Parkinson of Whitley Bay, a minister at the Department for Culture, Media, and Sport (DCMS), said the government will bring forward an amendment at third reading of the bill.

“We will amend the media merger regime explicitly to rule out newspaper and periodical news magazine mergers involving ownership, influence, or control by foreign states,” the minister told Peers.

Under the government’s plan, if the culture secretary has reasonable grounds to believe that a merger involving a UK newspaper or news magazine has given or would give a foreign state or body connected to a foreign state ownership influence or control, the minister will have to refer the merger to the Competition and Markets Authority (CMA) through a new foreign state intervention notice.

If the CMA confirms the minister’s suspicion in its investigation, the minister will be obliged to make an order blocking or unwinding the merger.

The minister also said the definition of “foreign powers” will be expanded to cover offices of foreign governments acting in a private capacity and investing their private wealth.

However, the ban specified in the particular bill will not extend to broadcasters or digital media.

Responding to concerns that the plan will still allow a foreign state to own a minority stake, which can still “amount to a controlling interest,” the minister said secondary legislation will be needed to set out what “limited types” of foreign investment funds are allowed to own stakes, and the “very low threshold up to which they may be permitted to invest.”

The plan comes as Culture Secretary Lucy Frazer is considering whether or not to intervene in the proposed takeover of The Daily Telegraph, The Sunday Telegraph, and The Spectator magazine on public interest grounds.

The proposed sale is to RedBird IMI, which derives most of its funding from Sheikh Mansour bin Zayed al-Nahyan, a member of the ruling family of Abu Dhabi, who is vice-president of the United Arab Emirates and owner of Manchester City FC.

It is understood that RedBird IMI is offering to help pay the £1.16 billion in debts that the current owners, the Barclay family, owe to Lloyds Bank.

Ms. Frazer has triggered a Public Interest Intervention Notice over the merger and has confirmed on Tuesday that she has received reports from Ofcom and CMA.

“Next, I will decide, in a quasi-judicial capacity, whether or not I am minded to refer this merger for a further investigation by the CMA,” the minister said in a statement on Tuesday.

If the government’s upcoming amendment becomes law, the foreign takeover regime will work in parallel with the existing public interest regime.

The government’s commitment also came after a crossparty group of peers, led by Baroness Stowell of Beeston, submitted an amendment demanding power for Parliament to block the foreign acquisition of news media organisations that operate in the UK.

Last week, over 100 MPs wrote to Ms. Frazer, urging the government to back the proposal.

A number of peers spoke in support Baroness Stonwell’s proposal, but Labour has it would be better to wait for the government’s proposal.

Opposition Chief Whip Lord Bassam of Brighton said Labour is “generally supportive of parliamentary scrutiny of the executive and its decisions.” It’s not convinced by Baroness Stonwell’s solution because for parliamentarians to scrutinise a deal, they would have to have access to “very sensitive security and commercial information.”

Withdrawing her amendment, Baroness Stonwell said the government’s plan “makes sense,” but said she may re-table it again if the government fails to deliver its promise.