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Wednesday, November 22, 2006

Rupert Murdoch: Predatory Capitalist?

Is Rupert Murdoch a threat to democracy due to the market power he has attained in markets for information? Peter Wilby is worried about his control over information in Britain and elsewhere:

A predatory capitalist who stifles competition and delivers mediocrity, by Peter Wilby, Commentary, The Guardian: I do not usually admire middle America, but on this occasion I wonder if it should be an inspiration to us all. OJ Simpson ... was about to give the world, courtesy of Rupert Murdoch, a "hypothetical" account of how he could have committed the crime. Murdoch's News Corporation had a book lined up, a TV interview that would be syndicated across America and, no doubt, countless spin-offs in other countries and media. Public opinion ... cried "enough". For once Murdoch couldn't do what he liked. On Monday he agreed to stop the project... Gosh, the great man even apologised for an "ill-considered project", which is a bit like an ayatollah admitting he'd misread the Qur'an.

But this, I fear, will cause just a ripple in the Murdoch empire: the emperor can afford to behave decently from time to time, and we are all very grateful - just as when he decided to stop publishing rubbish from global-warming deniers and take an interest in saving the planet. Of more importance is [the] sudden purchase ... of 17.9% of ITV shares. ...

Though Murdoch is just within the 20% limit for cross-media ownership of ITV shares, the media regulator Ofcom is to investigate. But don't expect spectacular results. The Times assured us yesterday that Labour was "happy" and the Conservatives "content", and that only the dear old dotty Lib Dems were at all bothered. So that's all right, then.

Well, no, it's not all right... We are talking information here, and Murdoch controls a vast amount of the information that flows around the world, from China to California. As the OJ Simpson affair shows, he's a cultural, as well as political, gatekeeper. That's why ... we should worry ... about Murdoch...

What is Murdoch up to at ITV? ... Without many people here noticing, he picked up 7.5% of Fairfax, his Australian rival, a few weeks ago. "Just to make it difficult for anybody to take them over," explained Rupert... It looks as if this is the new Murdoch mission across the world: to stop predatory capitalists from gobbling things up. As long as the predatory capitalist isn't called Murdoch.

In other words, if he can't or won't get actual control (and, depending on the strength of other shareholders, 17.9% seems very close to it), Murdoch will continue to do what he has always done: to weaken his rivals, not by producing better quality content, still less by developing original TV programmes or innovative films, but by exploiting his dominant market position. ... Keeping his rivals weak cheats the public. Murdoch endeavours to stifle competition, and thus bring everything down to his level of mediocrity and bland populism. ...

Murdoch can live with small, relatively weak rivals, such as Channel Five, the present ITV, the Telegraph, the struggling Mirror papers, and so on. Look, he will say, readers and viewers have plenty of choice, so how can you accuse me of excessive control? ...

What Murdoch will not tolerate is anything big enough to challenge him. He has only two serious rivals in the UK media industry: the BBC and Associated Newspapers... He has disrupted the latter by starting a ... rival to Associated's free Metro..., and to its evening paper, the Standard. The BBC, meanwhile, is subjected to relentless knocking propaganda from the Murdoch press.... BBC news services are consistently accused of being dominated by a liberal bias: a chilling echo of similar charges levelled at the public broadcasting channels and great metropolitan newspapers in America from, among others, the Murdoch-owned Fox News.

Murdoch is so much a part of the landscape that we sometimes lose sight of how outrageous his power is; we think his behaviour is just that of a natural businessman, as in some senses it is. But British political leaders cross the globe to pay him court, like tribal chiefs from outlying provinces offering tribute to a Roman emperor. ... To a remarkable extent, his political agenda - light business regulation, tight shackles on trade unions, a semi-detached status within the European Union, support for the American neocons in Iraq - is also the British political agenda.

Murdoch is an object lesson in the dangers of concentrated cross-border power. Such power is always problematic because it is apt to reduce diversity, squeeze out the regional and local, and stifle dissent. When it occurs in the information industry, it threatens democracy. It's doubtful that anybody can stop him buying his 17.9% of ITV: ownership regulations, last relaxed three years ago but with the usual assurances about "safeguards" for the public interest, nearly always turn out too weak to prevent Murdoch doing what he wants to do. It is time more people followed the example of middle America and took him on.

    Posted by on Wednesday, November 22, 2006 at 04:32 PM in Economics, Market Failure | Permalink  TrackBack (0)  Comments (2)

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