OWNERSHIP CONCENTRATION IN MEDIA HOUSES:

ANALYSING TRAI’S RECOMMENDATION

Dissertation submitted in partial fulfillment of the requirements for the award of

the degree of
Bachelor of Laws (BA LLB)

SUBMITTED TO:
MR.SANJEEV KUMAR CHOUDHARY
GUJARAT NATIONAL LAW UNIVERSITY

SUBMITTED BY:
RITIKA BHOLA
REGISTRATION NO – 16B134

Gujarat National Law University

Attalika Avenue, Knowledge Corridor
Koba, Gandhinagar, Gujarat–382426
2020

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 DECLARATION

DECLARATION
I hereby declare that the research paper titled “OWNERSHIP CONCENTRATION
IN MEDIA HOUSES: ANALYSING TRAI’S RECOMMENDATION” is an
original work of mine and no part of the research paper has been submitted for
award of any degree or for any publication.

Signature

Name of the Candidate: RITIKA BHOLA (16B134)

Date 01st DECEMBER 2020

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 The Supervisor(s) Certificate

MR.SANJEEV KUMAR CHOUDHARY

Assistant Professor of Law

CERTIFICATE

This is to certify that RITIKA BHOLA has pursued and prepared the research paper
titled ‘OWNERSHIP CONCENTRATION IN MEDIA HOUSES: ANALYSING
TRAI’S RECOMMENDATION’ in partial fulfillment of the requirements for the
award of the degree of Bachelor of Laws (BA LLB) for the Seminar Paper Media Law
under my supervision. To the best of my knowledge, the research paper is the outcome
of his/her own research.

Signature
(Name of Supervisor)

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 ACKNOWLEDGMENT

I would like to thank my supervisors MR.SANJEEV KUMAR CHOUDHARY

Assistant Professor of Law for his consistent support and guidance during the course of
this project.

Further, I would like to express my sincere gratitude to Prof (Dr.) S. Shanthakumar,

Director, GNLU and the institution for providing me with this wonderful opportunity
to carry out this research and for enabling me to broaden my horizons.

A special thanks to the Library department for making all online resources remotely
available in times of this pandemic.

My family and friends who have been the most supportive and encouraging throughout.

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INDEX

S.NO CHAPTERS Page no.

1. CHAPTER I - Introduction 8 - 12
2. CHAPTER II - MEDIA CONCENTRATION: Concept and 13 - 20
legal framework.
A. CURRENT MARKET CONCENTRATION
1. Horizontal agreement
2. Vertical agreements / vertical integration
3. Cross ownership
B. CURRENT REGULATORY FRAMEWORK
1. The Press council of India
2. News Broadcasting Standards Authority (‘NBSA’)
3. Broadcasting Content Complaints Council (‘BCCC’),
4. the TRAI
5. the Competition Commission of India (‘CCI’) are the
five institutions constituting the present regulatory
framework.
3. CHAPTER III-CONCEPT OF ARCHITECTURAL 21 – 24
CENSORSHIP
4. CHAPTER IV - ANALYSING THE ARGUMENTS 25 – 30
AGAINST STRUCTURAL REGULATION
A. ARTICLE 19(1)(a)
B. ARTICLE 19(1)(g)
C. THE INTERNET ARGUMENT
5. CHAPTER V - ANALYSING THE RECOMMENDATIONS 31 – 34
BY TRAI
6. CHAPTER VI – SUGGESTIONS 35 – 42
A. ‘MEDIA REGULATOR’ – structure?
B. HHI
CONCLUSION
7. BIBLIOGRAPHY 43 - 45

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 LIST OF ABBREVIATION

LPG liberalization, privatization and globalization

AAEC appreciable adverse effect on competition
S. section
Art. article
PCI The Press council of India
NBSA News Broadcasting Standards Authority
BCCC Broadcasting Content Complaints Council
TRAI telecom regulatory authority of india
CCI Competition Commission of India
IJoC International journal of communication
FCC Federal communication commission

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 LIST OF CASES

ABP (P) Ltd. v. Union of India WP (Civil) No. 246 of 2011

Abrams v. United States 250 U.S. 616 (1919)

Indian Express Newspapers (Bombay) Private Ltd. and Anr. v. Union of India [1985]
1 SCC 641

Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of Bengal

[1995] SC 1236

Noida Software Technology Park Ltd. v. Union of India, Petition No. 166 (C) of 2013

Romesh Thappar v. State of Madras [1950] SC 124

Sakal Papers (P) Ltd. v. Union of India [1962] SC 305

State of Orissa v. Radheyshyam Meher [1995] SC 855

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 CHAPTER I

Introduction

The project, Media Ownership Monitor: Who owns the media in India? 1, was pursued
by international organization (Not for profit) ‘Reporters Without Borders’ (RSF) and
DataLEADs which is a Delhi based digital media company. This project revealed the
ownership / shareholding pattern in media industry and also as to who ultimately
controls mass media. It gave a clear picture that Indian media market is establishing a
pattern of monopoly. This reflects the need of change in regulatory framework in order
to prevent media concentration and safeguard the plurality.

Media being “the fourth estate” plays unique role in democracy. It acts as a watchdog
of public interest and plays various roles like commentator and witness of government
and society at large. Owing to the importance of role of media, it cannot be permitted
to be in the hands of few i.e. ownership which even affect the plurality and hence such
concentration should not be allowed. They even hold special rights and freedoms are
given to avoid any kind of interference in their work but they are also subjected to some
responsibility. As Lord Leveson says “With these rights (of the press) come
responsibilities to the public interest: to respect the truth, to obey the law and to uphold
the rights and liberties of individuals.”2

Ministry of information and broadcasting referred to the authority to exam the matter
related to cross media ownership on 22 may 2008. In response to this recommendations
were made on horizontal and vertical integration and concentration of control/
ownership across media. But authority recommended not imposing any such restriction
on cross media ownership.

Standing committee on information and technology has condemned for the inaction in
preventing media concentration3 due to the uncontrolled corporatisation of media and
cross media ownership which affect the public interest. Hence TRAI was asked to re-
examine the issue of vertical integration in the broadcasting sector and also cross media

1
‘Media Ownership Monitor: Who owns the media in India?’ RSF reporters without borders
2
Lord Justice Leveson, ‘An Inquiry into the Culture, Practices and Ethics of the Press’, London:
November 2012
3
Paranjoy Guha Thakurta, ‘Media ownership trends in India’ (The Hoot, 3 July 2012)
<http://www.thehoot.org/web/home/story.php?storyid=6053> accessed on 10 Septmenber, 2020

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ownership. This was followed by ‘Recommendation on issues relating to media
ownership.’ July 3 2012

But still these recommendations are not yet brought into force even after major shift of
concentration which is leading to monopoly in media industry.

Hence there comes the need of investigating the need for the implementation of
recommendations which deals with the cross-media restrictions and also to the
regulatory framework. In-depth analysis of the recommendation is to be made with
criticisms and challenges as may be faced and also the arguments placed by the
stakeholders has been analysed in the paper.

Research Problem
In view of the recent reports which highlight the major concentration in the ownership
of media industry which is a normal phenomenon in economic perspective but this
negatively affects the plurality of opinions in the media industry when coupled with
technology. This further leads to various other problems like paid news, political
influence, private treaties, lack of plurality of opinion etc.

1. There arise is need to address the concern of imposition of structural regulations in

the media industry which acts as a balance of power, which seeks a democratic
distribution of media ownership.

2. The research in this dissertation is basically oriented towards the ownership concerns
in the media market, how this affects the plurality of opinion and also the paid news.
While addressing this question of ownership, legal framework dealing with ownership
concern is competition act which is also scrutinised to find the appropriate regulation
which would be applicable in such cases.

3. Apart from the regulations, the main question arises as to the applicability of the
recommendations and major part of it being challenged by the stakeholders.

The research will be addressing the above questions and problems and would try to find
the loopholes if any and give recommendations as the author deems fit.

Significance of the Study

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TRAI’s recommendation on media ownership in media has discussed on control, cross
media ownership, vertical integration and various other issues but till date no step has
been taken to implement them or has been brought in action.

The significance of this study is to determine the need for such recommendation in the
media industry. This would reflect the need of imposition of such restrictions. This
research work would give importance to architectural censorship i.e. structural
regulations which are of great importance in media industry now as with time the
ownership has become concentrated in few hands and is affecting the plurality.

This study brings in light the democratic distribution of media ownership whose
objective is to bring diversity of content in public domain and will also lead to
proportionate viewership with no media dominating the viewership pattern. These act
as balance of power.

This research confronts us to the oppositions, challenges and counters which the
recommendation face and also gives an in-depth analysis of the same which would help
in coming to any conclusion like to implement it or to change some of them
substantiated by giving reasons. Considering the analytical nature of the research the
same is beneficial to understand the recommendations and critically examine the
drawbacks and challenges faced.

This gives us a way forward to previously use self regulation regime which was
unsuccessful and in public interest there is need for government intervention through
structural restrictions which would help in maintaining the democratic idea.

Hypothesis

The hypothesis is that:

“Lack of structural regulations and legislations has lead to media concentration in India
and TRAI’s recommendation on cross ownership of media marks a beginning towards
structural reforms in media industry and would help in diluting ownership
concentration.”

Research Questions

1. Whether there exists ownership concentration in media industry?

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 2. Does we have legal framework which can help in reducing media
concentration? Is the competition act sufficient ?
3. What does the recommendations specifically focuses on?
4. Whether the oppositions to recommendations of being detrimental to
constitution (freedom of speech and expression and right to work) appropriate?
5. What are the challenges or loopholes in the recommendation by TRAI?

Scope and Limitation of the Study

The dissertation will precisely focus over the recommendations made on cross
ownership of media and henceforth discusses about the theoretical aspect of market
concentration specific to media industry. It is examines how our competition law
framework is ineffective in preventing the media concentration.

Further, the study is based on the oppositions and challenge put forth by media houses
and other stakeholders. Also it discusses about architectural censorship which is related
to the structural regulations. The study is limited to the concentration of news media in
the print and television sector as TRAI recommendation has limited their scope to the
same. Mainly the research being analytical, it may be subjective and inappropriate in
some circumstances.

Research Methodology

The author will be adopting the following methodology:

1. Analytical methodology
The author would analyze the recommendations at hand and would try to give
critique and alternatives as it deem fit for the issue.
2. Doctrinal approach
The author will analyze primary as well as secondary sources like statutes, acts,
ministry’s recommendations, commentaries, scholarly articles and empirical
studies.

Tentative Chapterization

CHAPTER I – INTRODUCTION

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This chapter gives brief introduction of the topic which will provide background of
study, the significance of subject, research problem, research questions, scope and
limitation of research with the literature review.

CHAPTER II - MEDIA CONCENTRATION: Concept and legal framework.

This chapter looks over the theoretical aspect and discusses the concept of media
ownership in depth. It also discussed the after effects of such concentration and the
legal framework available to tackle the same and also looking over the effectiveness of
the law.

CHAPTER III- CONCEPT OF ARCHITECTURAL CENSORSHIP

This chapter discusses the concept of architectural censorship which is basically reflects
the need of structural regulation in media industry.

CHAPTER IV - ANALYSING THE ARGUMENTS AGAINST STRUCTURAL

REGULATION

In this chapter, counter to the challenges has been given which were made by various
stakeholders against the recommendation of TRAI of it being pervasive of the
constitutional rights guaranteed to media being fourth pillar of democracy.

CHAPTER V - ANALYSING THE RECOMMENDATIONS BY TRAI

In this chapter, analysis of the recommendations will be done and the same will be
discussed in the light of law present and an in-depth study will be made which would
make us aware to the short coming of the recommendations.

CHAPTER VI – SUGGESTIONS & CONCLUSION

This chapter will deal with drawbacks and some effective suggestion would be
presented. This chapter will summarize the concept and suggestions and also give
explanation of the hypothesis.

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 CHAPTER II - MEDIA CONCENTRATION: Concept and legal framework.

This chapter looks over the theoretical aspect and discusses the concept of media
ownership in depth. It also discussed the after effects of such concentration and the
legal framework available to tackle the same and also looking over the effectiveness of
the law.

Media market has historically been oligopolistic, with a few companies dominating the
market. More recently, even though the sector is largely dominated by less people
because of the convergence of broadcasting and telecommunication technologies,
resulting in market where ownership is concentrated. This has culminated in a limited
group of multinational corporations leading their domination the market. But this trend
has also changed and instead the media market is leading towards monopoly model
because of conglomeration of media houses.

Prior to 1990s, india was a closed economy and there was minimal and limited private
investment which was very low. In 1990, india introduced and implemented
liberalisation, globalisation and privatisation reforms (LPG Reforms) which was the
time of technological revolution and digital revolution as well which lead to accelerated
increase in private investment. This was a major shift and also gave a transformative
effect on ownership patterns.4 as a result of this, competition increased heavily in the
market and hence in order to compete and survive in the market consolidation was
witnessed.

A. CURRENT MARKET CONCENTRATION

In order to understand market concentration in any industry we need to throw light in

competition law and so is the case in the media industry.

Under competition law, there are agreements which cause appreciable adverse effect
on competition ("AAEC") which are called anti-competitive agreements. These can be
horizontal or vertical agreements. These agreements are prohibited to be executed since
they are anti-competitive agreements and also leads to concentration in media industry.

4
Veena Naregal, “Media Reform and Regulation since Liberalisation” (2000) Economic and Political
Weekly <https://www.epw.in/journal/2000/21-22/book-reviews/media-reform-and-regulation-
liberalisation.html>

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Apart from this, cross ownership has also been witnessed in media industry which is
sui generis to this industry.

Horizontal agreement

“Horizontal agreements are arrangements between enterprises at the same stage of the
production chain and that is generally between two rivals for either fixing prices or for
limiting production or for sharing markets. In all such agreements, there is a
presumption in the Act that such agreements cause AAEC.”5

Section 3(3) of competition act “Any agreement entered into between enterprises or
associations of enterprises or persons or associations of persons or between any person
and enterprise or practice carried on, or decision taken by, any association of
enterprises or association of persons, including cartels, engaged in identical or similar
trade of goods or provision of services, which—

(a) directly or indirectly determines purchase or sale prices;

(b) limits or controls production, supply, markets, technical development, investment

or provision of services;

(c) shares the market or source of production or provision of services by way of

allocation of geographical area of market, or type of goods or services, or number of
customers in the market or any other similar way;

(d) directly or indirectly results in bid rigging or collusive bidding, shall be presumed
to have an appreciable adverse effect on competition.”6

With respect to media industry, it is seen that single media house owns various
newspapers or multiple television channels within a market.

This is done with the motive of gaining economies of scale as the profit arising depends
upon the size and efficiency of the media house. “Under this, when marginal cost of
production of media content is lesser than average cost, then a horizontally integrated

5
‘India: Anti-Competitive Agreements: Tests And Tribulation’ (mondaq, 11 july 2013)
<https://www.mondaq.com/india/trade-regulation-practices/250048/anti-competitive-agreements-tests-
and-tribulation> accessed 17 september 2020
6
Competition act 2002, s. 3(3)

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industry gets benefits of economies of scale. “This is because the total cost of
production gets distributed among a larger consumer base, which reduces the average
cost. In the media market, while the initial cost of content production is high, the
marginal distribution cost is low.7 Therefore, increased viewership results in increased
marginal returns, thereby reducing per viewership cost of production.” Achieving initial
benefits of scale economies has a multiplicative effect on other gains, such as higher
levels of gross investment, faster adaptation to technology, better personnel and cost
reduction through elimination of overlapping excess capacity.” 8 By this horizontal
integration, a media how can save their overall cost by sharing resources and
information amongst their outlet and hence, can increase its market share without even
increasing its overall costs.

Consequence of horizontal integration/ agreement in media industry is reduction in

plurality of views because of limited sources. This created a bottleneck in the spreading
of the information to the public. Even though it creates hinderance in conveyance of
majority of viewpoints but still it does not create any market barrier.

Vertical agreements / vertical integration

Section 3(4) of competition act- “Any agreement amongst enterprises or persons at

different stages or levels of the production chain in different markets, in respect of
production, supply, distribution, storage, sale or price of, or trade in goods or provision
of services, including—

(a) tie-in arrangement;

(b) exclusive supply agreement;

(c) exclusive distribution agreement;

(d) refusal to deal;

(e) resale price maintenance,

7
Alison alexander , Media and economics (3rd ed., lawrance Erlbaum associates) 2004
8
Dr. Naresh Rao H, Darashana Choudhury, “The relationship between media ownership and media
credibility” (2019) < https://www.worldwidejournals.com/global-journal-for-research-analysis-
GJRA/recent_issues_pdf/2019/March/March_2019_1552051326__139.pdf >VOLUME-8, ISSUE-3

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shall be an agreement in contravention of sub-section (1) if such agreement causes or
is likely to cause an appreciable adverse effect on competition in India.” 9

Vertical integration is where one company own the supply chain of a particular
business. in a way it in itself handles all the production as well as commercialisation
phases and does not depend on any other entity for continuation of business in media
houses, vertical integration is where a single owner control everything from content to
distribution and broadcasting. In upstream integration, the owner of distribution and
broadcasting phase acquires the production phase, whereas in downstream integration
the vice-versa takes place.10

Vertical integration helps in internalisation of various functioning, also helps in

reducing inter company’s problems related to contracts and hence leads to reduction in
transaction cost and increasing efficiency. this helps the owner in controlling the market
conditions and helps in securing necessary distribution channels which are required for
gaining market access.

This integration puts an entry barrier for the new companies to enter into the business
or the market. For example: “in the television industry, a broadcaster could impose high
carrier charges or could refuse to carry the channel at their discretion.34 Such
exclusionary market power concentrated with a few media firms that dominate the
viewership statistics would be detrimental to the aim of increasing diversity of content
and outlets in the media market.”11

Cross ownership

Cross ownership is primarily seen in media industry which witness joint ownership of
more than one type of media segment within a market. this is also called diagonal
integration which is out of the ambit of competition law jurisprudence. “It is strategic
acquisition, alliance and information partnership between companies in order to

9
Competition act 2002, s. 3(4)
10
‘India: Anti-Competitive Agreements: Tests And Tribulation’ (mondaq, 11 july 2013)
<https://www.mondaq.com/india/trade-regulation-practices/250048/anti-competitive-agreements-tests-
and-tribulation> accessed 17 september 2020
11
Noida Software Technology Park Ltd. v. Union of India, Petition No. 166 (C) of 2013

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improve access to consumers.”12 “Cross-ownership of media occurs when a person or
company owns outlets in more than one medium (i.e., newspapers, radio, and
television) in the same geographical market.” 13

“In this diagonal integration which is seen in media market are done to achieve
commercial and strategic advantage over their competitors and the gain depends in the
segments which are integrating. Every integration will have different efficiency gain
like different for merger among newspaper and television and that for radio and
television. The immediate efficiency gains that can be reaped from a diagonal
integration are content specialisation and common distribution channels which form the
core operational requirements for a media firm.”

On analysing the integration, the question arises as to why such integration takes place.
The most appealing factor is the reduction of the production cost via economies of scale
leading to efficiency gains. “Scope economies occur when the media entity is able to
produce multiple media products from expert opinions that are reused due to the ‘public
good’ characteristic of information. For example, a documentary about an earthquake
can be televised at the first instance and can then be re-edited and reformatted in the
form of newsprint in the second instance. Thus, multiple products are created from the
same information which reduces cost, increases output and market share. Such a
diagonally integrated media market is capable of creating insurmountable market
barriers which inadvertently pre-empts opinion from entering the public domain.”14

B. CURRENT REGULATORY FRAMEWORK

1. The Press council of India

2. News Broadcasting Standards Authority (‘NBSA’)

12
Nisha Bhambhani, Legal Assesment Contextualization for the Media Ownership Monitor – India
(2019) < https://india.mom-
rsf.org/uploads/tx_lfrogmom/documents/Legal_Assessment_MOM_INDIA.pdf>
13
Paranjoy Guha Thakurta, ‘Media ownership trends in India’ (The Hoot, 3 July 2012)
<http://www.thehoot.org/web/home/story.php?storyid=6053>
14
Nisha Bhambhani, Legal Assesment Contextualization for the Media Ownership Monitor – India
(2019) < https://india.mom-
rsf.org/uploads/tx_lfrogmom/documents/Legal_Assessment_MOM_INDIA.pdf>

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 3. Broadcasting Content Complaints Council (‘BCCC’),15
4. the TRAI
5. the Competition Commission of India (‘CCI’) are the five institutions
constituting the present regulatory framework.

Among these, the PCI, NBSA, and BCCC are the content regulators, while the TRAI
and CCI are non-content or content-neutral regulators.

PCI, NBSA and BCCC regulates content. The BCCC regulates the channels in the non-
news sector, PCI and NBSA regulate the news and current affairs sector. 16

The regulation of content can be differentiated into news and nonnews sector. The
BCCC regulates the channels in the non-news sector, while the PCI and NBSA regulate
the news and current affairs sector. The PCI’s jurisdiction is limited to print media while
the NBSA covers broadcasting. 17

The Press Council of india

The PCI is an independent regulator of print media.18 It is statutory body which is

empowered to take sou moto cognisance of and entertain complaints against
newspapers and journalists which are accused of illegal and unethical conduct.
However, PCI lacks punitive powers which are not vested in them which in turn
questions its efficacy.19 PCI has no authority to impose fines or send the person guilty
behind the bars in case of paid news. What it can do is to censure the publication or
give directions to Editor to publish a rejoinder or give a public apology.20 Notably, it
does not possess any jurisdiction to impose any ownership restrictions.

News Broadcasting Standards Authority (‘NBSA’)

15
Prashant Jha, ‘Statutory, Mandatory Self-Regulation emerging as consensus model for media’ The
Hindu (India, 06 August 2013)
16
Law Commission of India, ‘Consultation Paper on Media Law’ (2014)
<https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CBwQFjAAahUK
Ewjb79Oaj4HIAhUCj44KHXWrDZM&url=http%3A%2F%2Fwww.lawcommissionofindia.nic.in%2F
views%2FConsultation%2520paper%2520on%2520media%2520aw.doc&usg=AFQjCNGzmZdlCkOZ
kFtuq3h8w_L74Dsv8w&sig2=Xo8gquUYrwgKEUVx UNJLMw&cad=rja >
17
The Press Council Act, 1978, News Broadcasting Association, About Us
<http://www.nbanewdelhi.com/index.asp>
18
The Press Council Act, 1978
19
The Press Council Act, 1978, §14(1)
20
The Press Council Act, 1978, §14(1)

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The News Broadcasting Standards Authority (‘NBSA’) was established to enforce the
News Broadcasting Association’s Code of Ethics and adjudicate on complaints of
violation of the same.

NBSA possess powers to impose punitive measures i.e. they can impose fine on any
broadcaster who violates. However, the jurisdiction is limited to the broadcasters who
voluntarily submit to its jurisdiction. Moreover, the NBSA like PCI also lacks the
mandate to regulate ownership concentration in the media industry.

Looking over the powers it is seen that PCI and NBSA are highly ineffective in dealing
with various issues.” This was illustrated in the proceedings between M/s Jindal Steel
Power Ltd. and M/s Zee News Ltd., where both the PCI and NBSA took cognisance in
light of allegations of paid news and extortion. However, both bodies failed to give any
relief due to their institutional incapacity to handle cases which require thorough
investigation and enforcement.”21

CCI and TRAI

On the other hand, the content-neutral regulators, i.e., the TRAI and CCI, have proposed
some effective guidelines and orders, but they too have been mostly unsuccessful in
regulating ownership concentration.

Under its existing rules and code, TRAI does not have authority to enforce any limits
on ownership of the media industry. The directive to enforce limits on ownership lies
with the CCI being the country's antitrust regulator. In response to the TRAI
Consultation Report, several stakeholders shared the opinion that because market
competitiveness is the primary concern, the CCI should be responsible for the same.
The CCI, however, has also been largely ineffective in achieving this aim. The CCI is
authorized to regulate the goods and services markets and ensure that competition is
not negatively affected in these markets and that market supremacy is not exploited.

Paradoxically, the CCI has time and again approved the horizontal and vertical
consolidation in the media industry, disregarding the fact that such approvals go against
the very notion of diversity and plurality of opinion in a media market. “This was
exemplified in the case of the acquisition of Network18 media house by the Reliance

21
Paranjoy Guha Thakurta, ‘Media ownership trends in India’ (The Hoot, 3 July 2012)
<http://www.thehoot.org/web/home/story.php?storyid=6053>

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Group.” While investigating the matter, the CCI noted that the combination would not
have any “appreciable adverse effect on competition in India.” The CCI reasoned that
starting a new media enterprise in India is quite uncomplicated and there was “sufficient
scope for innovation and competition, both in terms of technology and content.” The
CCI, citing this, failed to delineate the particular commodity and regional market and
therefore terminated its joint inquiry. Similarly, the CCI approved the merger with Walt
Disney of UTV Software Communications, which led to one of the broadcast industry's
biggest vertical integrations. In both cases, the CCI did not distinguish the potential
negative effect of such mergers and acquisitions on the media industry's overall
diversity.

However, the media market being a ‘marketplace of ideas’ is quite different from the
general market of ‘commodities and services’ that the CCI inspects. “The CCI is
accustomed to deal with products of the nature of private goods, whereas the product
in media market, news and information, are of the nature of public goods. Thus, the
current competition law jurisprudence is not equipped to deal with such goods.”

Essentially, the existing regulatory system is ineffective to the degree that the
aggregation of opinion resulting from the accumulation of ownership is not envisaged.
Minimal regulatory procedures to ensure competition in the media markets are
distributed in separate legislations, with no single authority being allowed to control
the business effectively, both at the micro and macro level. With almost no
governmental scrutiny, this has led to mergers and acquisitions in the media industry
going unnoticed.

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 CHAPTER III- CONCEPT OF ARCHITECTURAL CENSORSHIP

This chapter discusses the concept of architectural censorship which is basically reflects
the need of structural regulation in media industry.

“The term 'censorship' is often correlated in common parlance with direct regulation of
content which is state sponsored.” but this, in some cases may not address some specific
content which may have a detrimental impact on the quantity, quality and diversity" of
content, this includes ownership restrictions which are called ‘structural regulations’
also.

“On the other hand, there are cases where particular material will not be targeted by the
State-sponsored legislation but may also have a detrimental impact on the quantity,
quality and diversity" of content. The regulations of the above sort contain limits on
possession, which are also referred to as structural regulations. Christopher Yoo terms
such structural regulation as ‘architectural censorship’ for him structural regulations
merely does the work of reducing the opportunities for exercising freedom of speech
and expression by the media houses.”22

The term ‘architectural censorship’ may be deceptive of being for content regulation
but rather its objective is regulating ownership. But some people argue that this goes
against the constitutional protection provided under freedom of speech and expression.
“The rationale behind endowing the press with the stature of the “fourth estate” was to
ensure that State functionaries do not enjoy concentrated unhindered power. The
profession of journalism and employment in the news media industry was seen as a
‘public service’. Lately, however, news media has turned into a business with
corporations expanding horizontally, vertically, and diagonally. Today, media
conglomerates possess enormous unobstructed power to influence public opinion. The
TRAI, in its recommendations, notes that unrestricted ownership concentration is the
root cause for paid news, self-censorship, deteriorating editorial independence and
invasion of privacy inter alia.”23

22
Christopher Yoo, “Architectural Censorship and the FCC” (2005) 78 S. Cal. L. Rev. 678
23
Telecom Regulatory Authority of India, ‘Recommendations on Issues Relating to Media Ownership’
(12 august 2014) <https://trai.gov.in/sites/default/files/Recommendations_on_Media_Ownership.pdf>

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Censorship does not means to restrict merely certain content to enter into the public
domain rather it includes various other situations like domination of views of few or
one entity because of its huge viewership and it censors other voices that may enter
public domain. when a company gets involved in unethical practices then it in one way
or the other will make sure that other media house is precluded from entering the
market/ competition. This creates a market barrier.

There have been various instances where unethical behaviour has been observed
because of the ownership concentration but still people are favouring free market.

• Best way to do business is to remove state intervention and there must be self-
regulation.
• Theory of ‘market place of ideas’ – market is place of ideas and hence it
demands free flow of ideas and information. “Abrams v. United States24 in 1919,
which established the ‘market place of ideas’ theory. The dissent juxtaposed the
economic doctrine of laissez faire and constitutional principles of free speech to
hold that “the best test of truth is the power of the thought to get itself accepted
in the competition of the market.” However, the market place of ideas theory is
itself prone to market failure.”
• With respect to democratic principles, all the opinion should be equally
promoted and disclosed to the public and the same could be done only if there
exist unrestricted market.
• It is the public/ individual who are free to choose the opinion they deem fit and
they have to ascertain the veracity and falsehood of an idea or expression. This
would promote competition in the market.

The market failures show that markets are imperfect and tends towards monopolistic
and monopoly markets where certain companies have hold over the information
disseminations. With horizontal and vertical integration, it shows inclination towards
market failure in the backdrop of assumption of free flow of information and laissez
faire approach. However, although this market failure does affect the overall content
entering the market, the failure itself is not content-specific. Nonetheless, there may be
instances where the content itself leads to market failure. For instance, content that

24
Abrams v. United States 250 U.S. 616 (1919)

Page | 22
promotes violence, misrepresents political debates and paid news are negative
externalities of news production and contribute to content-specific market failures. To
argue that self regulation is a panacea to both content specific and content-neutral
market failures has already proven to be unsuccessful in the case of the PCI and NBA.

In such case, it could be concluded, that the term ‘architectural censorship’ i.e.
structural regulation has a significant positive impact as well. From the above context
it can be said that censorship in not merely state sponsored but there can also be non-
state as well i.e. censorship with respect to structure. With respect to content, media
houses have liberty to put forth any content in public domain subject to constitutional
inspections but on the other hand we do not have any regulatory mechanism to check
either unscrupulous censorship of content or ownership concentration. 25 This limitation
of non-governmental censorship was discussed in Ministry of Information &
Broadcasting, Govt. of India v. Cricket Assn. of Bengal (‘Cricket Association’),
wherein the Supreme Court noted that “[...] [t]here is a far greater likelihood of these
private broadcasters indulging in misinformation, disinformation and manipulation of
news and views than the government – controlled media, which is at least subject to
public and parliamentary scrutiny.”26

This notice by the Supreme Court has formed part of judgement which has led to the
emergence of private broadcasters in the media industry. However, this observation of
the court was ignored while the broadcasting sector was bring opened up to private
entities even without establishing a regulator or any rules in that regard. The cause for
this problem was considered to be ownership concentration which is stuck today, as
noted by the TRAI.

Hence, the structural regulation would prove to act as ‘balance of power’ which would
give a democratic distribution of media ownership. This is to diversify the market in
regards to content and fair play. This will help in reducing the domination of one entity
with proportionate viewership pattern. The shift which would be made in viewership
pattern, in my opinion, shows the positive implication of ‘architectural censorship’ i.e.
structural regulation. The term ‘censorship’ is used to signify the censoring of

25
Ministry of Information & Broadcasting v. Cricket Association [1995] SC 1236
26
Ministry of Information & Broadcasting v. Cricket Association [1995] SC 1236

Page | 23
unscrupulous content providers whose viewership reduces due to the imposition of
structural regulations.

In my opinion these restrictions would enhance the competition and “the negative
externalities arising from news production by one media entity are neutralised by
another media entity. with this diversity of opinion could be drawn in a way that if one
media house censor an idea it is not necessary that all the houses will do the same
instead this will in achieving to the goal of the media of informing the public with every
aspect being in a competitive market. This move of imposing some structural
regulations would merely act as corrective plan just to save market from failing which
have been witnessed to have inclination towards concentration and domination by an
entity towards monopoly. These regulations would help in maintaining equilibrium and
fair play in the market.”

Page | 24
CHAPTER IV - ANALYSING THE ARGUMENTS AGAINST STRUCTURAL
REGULATION

In this chapter, counter to the challenges has been given which were made by various
stakeholders against the recommendation of TRAI of it being pervasive of the
constitutional rights guaranteed to media being fourth pillar of democracy.

All media companies are run for making profits and this is its inherent tendency to
concentrate/ integrate in order to have efficient gains which also creates imperfect
market i.e. monopoly in this case. This problem can be solved by state’s intervention
or self-regulation but self-regulation proves to be highly ineffective as is evidenced
from past record and experiences. Hence in such case the last resort which exist is the
intervention by government which in this case would be formulation and imposition of
structural reforms with the view of protecting public interest.

In pursuance to the TRAI’s consultation paper there were massive arguments against it
by many of the prominent media houses and companies with respect to the
implementation of the recommendations on structural regulations. Following are some
of the arguments put forth by them. Initially, they relied on constitutional protection
that the media enjoy rights and privileges under Article 19(1)(a). 27 with respect to
constitutional protection it is argued that these regulations and recommendations violate
Art 19(1)(g) i.e. freedom of trade and profession. Apart from this moving with the time,
it is also claimed that in the generation of internet, there exist an unrestricted public
domain which nullifies the concentrating effect of the media market and help overcome
the effect of the same.

The above cited arguments are explained below with the counters that exists.

A. ARTICLE 19(1)(a)

Article 19(1) in The Constitution Of India 1949: “All citizens shall have the right

(a) to freedom of speech and expression;”28

Freedom of speech and expression has expressly been acknowledged by supreme court
in various judgments.in respect to the structural regulations, it is claimed to have

27
The Constitution Of India 1949
28
The Constitution Of India 1949, Art 19(1)(a)

Page | 25
violated their right under Art 19(1)(a). even though indirectly, structural regulations do
violate freedom of speech and expression.

But if we analyse closely, we can find various contradictions and find the
misunderstanding which is being associated with interpretation of these rights as under
Art 19(1)(a).

Nevertheless, this argument is based on an erroneous understanding of the right under

Article 19(1)(a). Primarily, there are three counter-arguments for a wholesome
explanation of this right.

• The proposed restrictions on ownership were made by TRAI in order to

enhance and boost the content which is being made available to the public.
This will also help in improving quantity and quality of information which
is presented before the public. Point worth noting is that RTI right to
information forms part of freedom of speech and expression of citizens.
hence while considering and looking over the freedom of speech and
expression of the media house we must ensure that it does not jeopardise
citizens right to information. The Supreme Court has clearly laid down that,
“from the standpoint of Article 19(1)(a), what is paramount is the right of
the listeners and viewers and not the right of the broadcaster, whether the
broadcaster is the State, public corporation or a private individual or
body.”29 Therefore, with respect to Article 19(1)(a) it could be said that the
right of the citizens to obtain information overpower or supersedes the right
of the media houses to disseminate ideas and information. These regulation
would definitely help enhancing media plurality in the market which would
ultimately in disseminating unprejudiced and impartial view which forms
the part of basic duty of the media.

• Primarily the objective of the media houses being establishes was to make
citizens aware and help them in making informed choice by putting in front
of them all the information. But in pursuance to this objective sometimes it

29
Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of Bengal [1995] SC 1236

Page | 26
 has the tendency to dominate the public sphere which need to be taken care
of.
In Indian Express Newspapers (Bombay) Private Ltd. and Anr. v. Union of
India, court state that “if while fulfilling this objective, any entity tries to
monopolise or dominate the public sphere, it is an obligation of the State to
break this monopoly.” 30
In Romesh Thappar v. State of Madras - It is without doubt that the
“monopolization and domination [...] [by a media entity is] prejudicial to
the freedom of speech and expression of the public in general.” 31
Hence, the regulation on media ownership would help in avoiding such
monopolies and also would help to reduce imbalances in the market.
• The restrictions which are proposed by TRAI are means to have structural
regulations which are content-neutral.
In Sakal Papers (P) Ltd. v. Union of India, the Supreme Court held that “the
regulation of matters incidental to running of a media organisation can also
be in direct conflict of Article 19(1) (a).”32 However this means that TRAI’s
recommendation were aiming to control the speech in the name of structural
regulation which forms incidental matter.
But in reality, it could be inferred that TRAI Recommendations that “the
objective is enhancement of content by restricting monopoly where main
matter remains controlling the monopoly or the imbalances existing.” After
Ministry of Information & Broadcasting v. Cricket Association, the position
was changed by the supreme court “it would be hard to show that Article
19(1)(a) right is infringed without proving that the objective was to control
content.”33

Hence considering the counter claims we can say that constitutional challenge made
under art 19(1)(a) would not have any backing.

30
Indian Express Newspapers (Bombay) Private Ltd. and Anr. v. Union of India [1985] 1 SCC 641
31
Romesh Thappar v. State of Madras [1950] SC 124
32
Sakal Papers (P) Ltd. v. Union of India [1962] SC 305
33
Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of Bengal [1995] SC 1236

Page | 27
 B. ARTICLE 19(1)(g) CONCERNS

Other constitutional challenge against structural regulations which arise is with respect
to violation of article 19(1)(g) i.e. freedom of trade and occupation. 34 these rights are
subject to reasonable restrictions “in the interest of general public” as under Article
19(6). These restriction for being reasonable need to have reliance on the purpose,
motive or objective of the regulations so proposed, its presumed execution and need of
the situation and the major factor which is extremely uncertain are the circumstantial
conditions.35

the Supreme Court in State of Orissa v. Radheyshyam Meher has held that “the
reasonableness of the restrictions imposed should be viewed from the standpoint of the
general public and not the person on whom the restrictions is being imposed on.” 36

In ABP (P) Ltd. v. Union of India,37 the Supreme Court rejected “the contention of the
petitioners that the regulation on the services and wages of the journalists and
newspaper employees violated Article 19(1)(g).” The Court held that the impugned
restrictions were reasonable as they served best in the public interest.

Similarly, in Cricket Association,38 it was observed that “any step in furtherance of the
obligation of the State to break monopoly and provide greater diversity, could be
justified as being in interest of the society.”

We can say that it is media which create an image or form the opinion of the people in
one way or the other, it influences the public opinion. Media is considered the 4 th pillar
of democracy and also as watchdog of the government. Hence, media being holding
such crucial position requires independence and plurality of opinion subject to public
interest. Hence, in order to save public interest, there is need to have some regulations
which reduces media concentration as it ultimately will affect the plurality of the news.

C. THE INTERNET ARGUMENT

34
The constitution of india, art 19(1)(g)
35
Chintaman Rao v. State of M.P. [1951] SC 118
36
State of Orissa v. Radheyshyam Meher AIR 1995 SC 855
37
ABP (P) Ltd. v. Union of India WP (Civil) No. 246 of 2011
38
Government of India v. Cricket Association of Bengal [1995] 2 SCC 161

Page | 28
It is argued that the internet has immensely changed the circumstances with respect to
the plurality of the media. With emergence and popularity of the internet platform it
has introduced to the world a new platform for sharing of information and opinion
which would now even overtake traditional media which would make these regulations
and restriction sound useless and not worthy of being implemented anymore and would
become redundant. this argument is majorly based on assumption and is flawed.

But Many media houses have an online presence as an extension of their existing
traditional media services. These media houses are merely deriving benefit of scope
economies, where the same information is remodelled and published on the Internet.
Since this does not increase plurality of opinions, to consider the Internet as a separate
source or content generator, would not be correct.”39

In reality, internet is a concentrated platform rather than being highly pluralistic. On

internet there is minimal supply side distribution costs.40 Online companies are
promoted to transfer resources in order to make specialised media information to
attracting a larger public.

There is disadvantage to independent online content creators as it reduces their

commercial gain and success hence, again here domination may again pop up as there
would be dominance of few portals as even the sites paying more holds greater visibility
in the virtual medium. Hence, we can say that we can see domination by established
media houses. In Indian context, with respect to proportion having access to internet
and those subscribing to online news are also very low. Even though there is availability
of huge content over internet but still public rely on the reputed and prominent media
house making the situation like before. The views and opinions expressed on blogs and

39
Administrative Staff College of India, “‘ASCI’s Response to Comments made by Star India on the
ASCI Report in Star India’s Submissions on TRAI Consultation Paper on Issues Relating to Media
Ownership” (29 April 2013) < http://www.trai.gov.
in/WriteReadData/ConsultationPaper/Document/201305080305142594586Comments%20
on%20Star%20Report.pdf >
40
Nisha Bhambhani, ‘Legal Assesment Contextualization for the Media Ownership Monitor – India’
(2019) < https://india.mom-
rsf.org/uploads/tx_lfrogmom/documents/Legal_Assessment_MOM_INDIA.pdf>

Page | 29
social media are not always perceived to be trustworthy or accurate, as these
aggregators generally lack resources to produce credible data. 41

Hence this argument of internet promoting plurality could not accepted in its entirety
and hence reliance cannot be made and, in this regard, TRAI has also not considered
internet as a relevant market.

41
‘Recommendations on cross-media ownership issued by TRAI’ (adgully, 13 august 2014)
<https://www.adgully.com/recommendations-on-cross-media-ownership-issued-by-trai-58632.html>

Page | 30
CHAPTER V - ANALYSING THE RECOMMENDATIONS BY TRAI

In this chapter, analysis of the recommendations will be done and the same will be
discussed in the light of law present and an in-depth study will be made which would
make us aware to the short coming of the recommendations.

The TRAI Recommendations can broadly be divided into six major categories: 42

1. defining ownership and control

2. transparency and confidential disclosures by media entities
3. use of the HHI
4. cross and vertical restrictions
5. establishment of an independent media regulator
6. curbing unethical practices

defining ownership and control

The TRAI has suggested detailed 'power' and 'ownership' concepts. These meanings
form the basis on which the prohibitions on cross- and vertical control of media
companies must be enforced. It has been correctly pointed out that 'power' of a media
outlet can be exerted in different ways, making it important to specifically identify what
constitutes a media-owning entity's possession and/or control.

Ownership means a sole economic interest in the form of ownership or the value of
shares owned in a corporation, whereas 'power' implies the right to manipulate the
company's decision-making.43 Control plays a vital role when those who control the
media sector's management and activities, even regulating the news, among other
aspects. While 'ownership limitation' is the term commonly used by the TRAI, power
over the media institutions is ultimately meant to be restricted. Explaining this principle

42
Telecom Regulatory Authority of India, ‘Recommendations on Issues Relating to Media Ownership’
(12 august 2014) <https://trai.gov.in/sites/default/files/Recommendations_on_Media_Ownership.pdf>
43
Telecom Regulatory Authority of India, ‘Recommendations on Issues Relating to Media Ownership’
(12 august 2014) <https://trai.gov.in/sites/default/files/Recommendations_on_Media_Ownership.pdf>

Page | 31
by an example, TRAI proposes that Entity 1 ('E1') be said to 'govern' another Entity 2
('E2') and take business decisions if E1 controls at least 20% of E2's overall share capital
directly or indirectly through partners, subsidiaries and/or relatives

transparency and confidential disclosures by media entities

On an annual basis, the TRAI Guidelines placed the duty on the media institutions to
make such public disclosures. It is proposed that those disclosures include the entity's
shareholding pattern; the entity's FDI pattern; its direct or indirect involvement in other
media entities; direct and indirect interest in other media entities of shareholders with a
shareholding in excess of 5%; partner, loan or contract agreement; information of main
executives and board of directors; details of loans made by other media entities
Confidential disclosures must include the revenue from subscription and ads,
advertising cost, and the top ten advertisers in each entity's channel.

HHI

The Herfindahl Hirschman Index ('HHI') has been proposed to be implemented for the
purpose of calculating consumer concentration. HHI is calculated by squaring each
media entity's market share, and then summing up the corresponding figures. “Taking
into account the levels of HHI concentration, it is recommended that a market with an
HHI of less than 1000 be viewed as a competitive market, while an HHI of 1000-1800
will be regarded as a moderately concentrated market and a market over 1800 will be
treated as an extremely concentrated market.”44

“Three approaches to the calculation of supremacy is considered by the TRAI: C3 (sum

of the three highest market shares in the relevant market), the Herfindahl Hirschman
Index (HHI-sum of market share squares for all companies in the relevant market) and
the Diversity Index. Among the three, the HHI was favoured by most stakeholders, who
thought that the Diversity Index would not be sufficient, since it would be difficult to
assign relative weights to various media segments, and the US FCC was moving away
from it. Some criticized HHI, arguing that it does not directly represent control over
opinion forming, it is misleading and presents a high risk of consumer manipulation.

44
‘Herfindahl-Hirschman Index (HHI)’ (CFI) <
https://corporatefinanceinstitute.com/resources/knowledge/finance/herfindahl-hirschman-index-hhi/ >

Page | 32
The TRAI also chose the HHI to calculate concentration in a relevant sector in a media
segment.”45

cross and vertical restrictions

TRAI advises that the rules on cross-ownership should be established for the genre of
News and Current Affairs, the relevant regional sector for which language has been
narrowed down. The product market has been narrowed down to print and television
within this particular genre. A mix of usage spectrum and volume metrics was
recommended for the broadcast sector for the calculation of market shares, while reach
metrics were recommended for the print segment. 46 “Importantly, it was suggested on
the organizational front that if a media house contributes more than 1000, say print, to
the HHI of a specific segment, then it can not contribute more than 1000 to the HHI in
the television segment as well. If this provision is broken for two straight years, the
power of the organization in one of the two segments should be diminished. The TRAI
Guidelines aim to explicitly implement its previous Recommendations on Topics
Surrounding New DTH Licenses in order to control vertical concentration. A variety of
non-discriminatory clauses to discourage abuse by vertically operated broadcasters
have been recommended in this case. Depending on the form of broadcasting unit and
its market share, limitations are often set on vertical integration.”47

establishment of an independent media regulator

The TRAI's most relevant proposal is the formation of a 'independent media regulator'
in the form of a Commission with administrative power over both the print and
television parts. The regulatory body would be staffed by "eminent individuals from
various walks of life, including the media," while the organization would be managed
mainly by "non-media individuals." It has been proposed that the current media
regulator have punitive authority, unlike the former bodies that controlled the media.

45
‘Recommendations on cross-media ownership issued by TRAI’ (adgully, 13 august 2014)
<https://www.adgully.com/recommendations-on-cross-media-ownership-issued-by-trai-58632.html>
46
Telecom Regulatory Authority of India, ‘Recommendations on Issues Relating to Media Ownership’
(12 august 2014) <https://trai.gov.in/sites/default/files/Recommendations_on_Media_Ownership.pdf>
‘Recommendations on cross-media ownership issued by TRAI’ (adgully, 13 august 2014)
47

<https://www.adgully.com/recommendations-on-cross-media-ownership-issued-by-trai-58632.html>

Page | 33
curbing unethical practices

TRAI states that three types of 'private treaties' exist: advertisement in exchange for
cash, advertising in exchange for favorable coverage, and exclusive promotional rights
in exchange for favorable coverage. "It also states the presence during elections of
"advertorials" and incidents of paid reporting. The TRAI advises that any such unethical
activities related to content must be regulated by the media regulator. In order to
guarantee the editorial freedom of media outlets and to reduce the power of
shareholders, the authority of the media regulator has also been expanded. The TRAI
advises that the present 'arms-length arrangement' must be improved as far as the
freedom of the government-run media house, Prasar Bharti, is concerned.

Page | 34
 CHAPTER VI – SUGGESTIONS

This chapter will deal with drawbacks and some effective suggestion would be
presented.

These recommendations by TRAI have places a milestone in a State-sponsored

negotiation of market regulation in the media industry. TRAI has taken responses form
various stake holders by consulting them in a transparent and fair manner. 48

With regards to various recommendations by TRAI, majority of them are fairly

acceptable like attempt to curb unethical practices in content, disclosure norms and also
the ‘control’ and ‘ownership’. The high light of the recommendations lies with the
proposal for the appointment of an independent regulator to closely examine and
regulate cross media problems in the industry. There are two areas in my opinion where
TRAI recommendation are not sufficient enough to handle the market.

C. ‘MEDIA REGULATOR’ – structure?

For any regulatory authority to be formed, there is requirement of proper organisational

structure to work. Its strength is determined by the composition of the authority like the
non-partisan role of the individuals and presence of professional expertise.

This is where TRAI’s recommendation failed as it did not define any structure for the
organisation of media regulator. “The recommendations merely declare that the
authority would be consisting of “eminent persons from different walks of life”, which
would include media as well as non-media personnel.49 The only other revelation about
the regulator is the acceptance of the long-standing demand to bring the print and
television sectors under the jurisdiction of the same regulator.” 50

The first limitation of the Recommendations is that it is silent about the organisational
structure and was unable to narrow down proper guidelines or composition rules. This

48
Telecom Regulatory Authority of India, ‘Consultation Paper on Issues Relating to Media Ownership’
(5 February 2013) <http://www.trai.gov.in/WriteReadData/
ConsultationPaper/Document/CP_on_Cross_media_%2015-02-2013.pdf>
49
Telecom Regulatory Authority of India, ‘Recommendations on Issues Relating to Media Ownership’
(12 august 2014) <https://trai.gov.in/sites/default/files/Recommendations_on_Media_Ownership.pdf>
50
Telecom Regulatory Authority of India, ‘Recommendations on Issues Relating to Media Ownership’
(12 august 2014) <https://trai.gov.in/sites/default/files/Recommendations_on_Media_Ownership.pdf>

Page | 35
has led to ambiguous distribution of power between those which are content related and
which are content neutral.

A corollary concern, which can be attributed to this shortcoming, is the failure to

distinguish and effectively distribute power to impose content-related and content-
neutral restrictions. In this sub-part, we would examine the effect of these shortcomings
and attempt to overcome them.

Failure of self regulation

It is important to remember that organisational structure and configuration are one of

the key explanations for the failure of self-regulatory bodies such as the PCI and NBSA.
The PCI is headed by a former Supreme Court judge and members are publishers,
journalists and editors from the print industry and other nominated political
appointees.51

“The NBSA is headed by former Supreme Court judge and members consists of
representatives of television editors and eminent persons which includes people from
the academia and bureaucracy.”52 Within the organisation as such there is no substantial
division of authority and responsibility. If we look over their effectiveness as a
regulator, they are found to be rally ineffective in the bound of jurisdiction. For the
NBSA, the Chairperson, Justice R.V. Raveendran, has admitted that “even though the
NBSA does impose nominal punitive damages on the errant broadcaster, its efficacy as
a regulator is limited due to the voluntary nature of jurisdiction.” 53 Even in the presence
of eminent persons in various fields of journalism, judiciary, academia and
bureaucracy, these regulators have failed in attaining and fulfilling their objective.
Hence, eminence of a person can be one of the criteria but it cannot be the only criteria
to be appointed as regulator in such regulatory bodies.

Various responsibilities

The essence of the suggestion made by the TRAI is another explanation why the
organisational setup becomes important. The TRAI Recommendations suggest that the

51
Government of India, Ministry of Information and Broadcasting, F. No. M-22011/1/2014 (October 10,
2014).
52
J. Balaji, ‘PCI sidelines Sub-Committee Report on “Paid News”’ The Hindu (30 July 2010)
53
J. Balaji, ‘PCI sidelines Sub-Committee Report on “Paid News”’ The Hindu (30 July 2010)

Page | 36
regulatory body need to cope with complex economic and legal problems, unlike the
PCI and NBA, where simple rules and guidelines are to be followed. This include
controlling large-scale corporate mergers and acquisitions, implementing a strict level
of concentration, calculating market positions, applying principles of competition law,
maintaining compliance with standards of transparency, etc. These problems are
discussed not only at the national level (news in Hindi and English), but also in the
separate indeterminate and overlapping areas (vernacular). The overarching aim of
setting up a media regulator is not only to limit existing levels of concentration, but also
to preserve and gradually raise levels of plurality. Media concentration policies need to
be reviewed every three years, as recommended by TRAI.54

However the guidelines propose a composition close to that of the PCI and NBSA for
dealing with such various problems of policy formulation and enforcement.
Furthermore, it can be concluded from a quick reading of the TRAI Guidelines that the
members will not have full-time appointments; rather like the PCI and NBSA, they will
convene a conference. “The perils of having such a structure and composition of a
regulatory body is highlighted by the fact that the maximum attendance of the PCI
meeting was when the members outvoted the publication of the Sub-Committee Report
on Paid News!”55

Suitable setup

In my opinion, organisational should be similar to that of CCI. CCI has various division
and each for doing a specific work having similar subjects. these include the Legal
Division, Anti-trust Division, Combination Division, Economic Division and
Investigation Division in this structure, the expertise of the members could be utilised
in the best way and would be an effective market regulator.

“Further, media regulators in other jurisdictions like US (FCC) 56 also have a near
similar structure where there is a clear separation of enforcement, investigation, and

54
Telecom Regulatory Authority of India, ‘Recommendations on Issues Relating to Media Ownership’
(12 august 2014) <https://trai.gov.in/sites/default/files/Recommendations_on_Media_Ownership.pdf>
55
J. Balaji, ‘PCI sidelines Sub-Committee Report on “Paid News”’ The Hindu (30 July 2010)
56
Federal Communications Commission, Bureaus and Offices,(2013)
<http://transition.fcc.gov/images/fccorg-november2013.pdf>

Page | 37
policy formulation. The established media regulators in India do not have any such
division of responsibility and this has been one of the major reasons for their failure.”

Media is considered as fourth pillar of democracy. Therefore, while certain content-

neutral ownership constraints can be resolved by a CCI-like system, there must be space
for self-regulation as far as content-specific restrictions are concerned. Restrictions
related to content include all problems pertaining to internal media diversity. That
include advertorials, paid news topics, private deals, questions relating to privacy, etc.

“Recently, the Leveson Committee Report of UK, while looking at the issue of media
regulation recommended an “independent self-regulatory regime.”57 In its
recommendation, the composition of the body is similar to the body of eminent persons,
as recommended by the TRAI. The Leveson Committee Report suggested that the body
must be selected in a fair and transparent manner; majority composition must be
independent of press; must include experienced former editors and academics;
exclusion of any serving editors; and must be devoid of legislative oversight.” 58

B. HHI

Ownership restriction could only be imposed if there exist market concentration, to

identify this we need to have accurate measurement. Hence, TRAI under its
recommendation has proposed that regulator must use the HHI for measuring market
concentration. HHI is worldwide accepted index in the field of competition law. This
consideration of index has showed the competition law related analysis of market but
the problem lies here that it is not effectively changed so as to adapt it to the Indian
media market.59

57
The Leveson Enquiry, ‘An enquiry into the culture, practices and ethics of the press- Executive
Summary and Recommendations’ (2012)
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/229039/0779.pdf>
58
The Leveson Enquiry, ‘An enquiry into the culture, practices and ethics of the press- Executive
Summary and Recommendations’ (2012)
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/229039/0779.pdf>
59
‘Herfindahl-Hirschman Index (HHI)’ (CFI) <
https://corporatefinanceinstitute.com/resources/knowledge/finance/herfindahl-hirschman-index-hhi/ >

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Substantiating the HHI, TRA has cited that facts that “the US Anti-Trust Division of
the Department of Justice uses the HHI to approbate its selection.” 60 even though not
expressly mentioned but CCI also uses HH index to determine market concentration.
With time, HHI has been criticised of being ambiguous, arbitrary, limited to market
share distribution and number of firms. Even after having limitation still is being used
because as such no other alternative is there and the one available even suffer various
deficiencies.

Nevertheless, despite taking the general critiques of the HHI into account, there is still
a particular critique of the media industry. In the competition law system, the HHI has
historically been used. The system for competition law is equipped to assess market
concentration in markets in which private goods are consumed. Media industries, on
the other hand, compete with public goods. The basic distinction between the two is
that private goods are rivalrous, i.e., they can not be purchased by others if they are
consumed by one person; and excludable, i.e. if a person wishes to buy a good, they
can prohibit another person from benefiting from the same. A public good, on the other
hand, is non-rivalrous and non-exclusive, which is vice versa to the qualities displayed
by a private good.

“It is the emergence of the extra source which gives rise to the concept of pluralism. As
long as if the extra source is not controlled by any of the established media entity, one
can assume the shift of the media market towards a more plural form. If the extra source
is controlled (keeping in mind the previous differentiation with ownership) by an
existing media entity, it can easily use the public good characteristic of news to remodel
the same information and publish it without contributing to the number of viewpoints
in a democracy.”61

This is one of the major criticisms of HHI index that in media market it does ignore the
concept of pluralism. It disregards the source or the number of voices which shows the
availability of viewpoint.

60
Telecom Regulatory Authority of India, ‘Consultation Paper on Issues Relating to Media Ownership’
(5 February 2013) <http://www.trai.gov.in/WriteReadData/
ConsultationPaper/Document/CP_on_Cross_media_%2015-02-2013.pdf>
61
Eli M. Noam, “Media Ownership and Concentration in America” (2009) IJoC
<https://ijoc.org/index.php/ijoc/article/view/835>

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For media market what is needed is to have such an index which takes into
consideration the concept of pluralism. It is obvious that every tool for analysis faces
certain limitation. hence, TRAI should not try to look over other indices for measuring
the market concentration in media market which overcomes the limitation.

In my opinion following indices could be used by the TRAI for measuring media
market concentration.

1. Diversity index
First introduced by FCC in order to overcome the limitations of HHI. In DI itself
there is an element of HHI the only difference lies in the manner of calculation
of market shares. This difference helps in overcoming the issue of ignorance of
problem of pluralism. For this purpose, the FCC first narrows down the media
type which it wants to include for the purpose of its calculations.194 Thereafter,
each outlet is assigned a relative weight.195 Then the FCC calculates the
number of outlets in the market for each media type and assigns it an equal
market share.62
DI helps in bringing all the media concentration under in ratio. DI is criticised
of bring arbitrary while assigning relative weight. This is the reason mentioned
by the TRAI for rejecting this index. But in india only television channel and
daily newspaper are considered. Hence, relative weight calculation would be
easy and less arbitrary.
In my opinion, TRAI should instead of straight away rejecting this index, should
try to cover up the problem of relative weight.
2. Media ownership concentration and diversity index. (MOCDI)
This index was formulated by Professor Eli Noam. 63 this also uses HHI in its
calculation.
MOCDI = HHI/V, V= the square root of the number of voices in the market.200
Hence MOCDI takes into consideration market participation as well as the
market share and also the number of voices in the market.

62
Eli M. Noam, “Media Ownership and Concentration in America” (2009) IJoC
<https://ijoc.org/index.php/ijoc/article/view/835>
63
Eli M. Noam, “Media Ownership and Concentration in America” (2009) IJoC
<https://ijoc.org/index.php/ijoc/article/view/835>

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 This option in my opinion could be an alternative as it takes into consideration
all the aspects which were limitation in HHI. Hence, the proposed alternatives
can serve as a window of opportunity to calculate accurate concentration levels
as possible.

CONCLUSION

The TRAI Recommendations have placed the problem of media concentration at the
centre of the country's public policy discourse. It is necessary to note that like any other
marketing device, media companies would aim to maximise productivity gains and the
integration of the market would be a direct consequence of the same. For this same
cause, the Laissez faire approach and the previously operating self-regulatory initiatives
have struggled to dilute the accumulation of ownership in the sector.

These recommendations were opposed by stakeholders on the ground of them being

violative of constitutional protections and right i.e. freedom of speech and expression
and freedom to practice trade and business. They emphasised on the generation of
internet and it providing a play level field and no media concentration effect is seen.
However such challenges does not hold as much substance and are just being misused
to present some argument.

“The TRAI Recommendations regarding the definition of ‘ownership’ and ‘control’,

cross and vertical restrictions, transparency and confidential disclosures by media
entities and the establishment of independent media regulator are well established.
However, the TRAI has failed to exhaustively provide the organisational structure of
the proposed media regulator and the reason behind using the HHI as an index to
measure market concentration. With respect to the organisational structure the
qualification of member of being eminent person is not enough. Hence there is need to
have different divisions controlling different subjects with professionals as member so
that their expertise could be used efficiently like in the case of CCI.”

HHI has faced various limitation one of the prominent being non consideration of
pluralism in its calculation i.e. it fails to accounts the number of voices in the media
market. TRAI didn’t took this limitation into consideration and also didn’t looked over
for the alternatives properly. Hence, in my opinion TRAI could give a try to diversity

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index or MOCDI to calculate the market concentration in media market. Considering
all the factors, TRAI should reconsider the recommendations and come up with
modified rules which would be helpful in moving towards a lesser imperfect market.

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 BIBLIOGRAPHY

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