HC Deb 04 December 1990 vol 182 cc90-1W
Mr. Irvine

To ask the Secretary of State for the Home Department what action he now proposes in the light of the conclusion of the Director General of Fair Trading that he would not be making a formal reference to the Monopolies and Mergers Commission on the subject of the acquisition by broadcasters of rights in indpendently produced programmes.

Mr. Peter Lloyd

Concern has been expressed about the common practice of broadcasters who require independent producers to assign their rights in programmes to them. In April 1990, the then Secretary of State for Trade and Industry asked the Director General of Fair Trading to consider whether action under competition legislation would be justified.

After detailed investigation, the Director General advised that there was no justification for a reference to the Monopolies and Mergers Commission. He found that broadcasters typically take all the rights because they provide 100 per cent. funding, and thus take all the risks. Channel 4 indicated that they were always willing to contemplate contracts which conferred exploitation rights on the independent producer, with some offsetting adjustments in funding. The director general concluded, however, that in practice few independents could offer a share of costs in exchange for rights, but that this was not the fault of the broadcasters, who were not thereby abusing their dominant power.

In the light of this advice, we see no case for further investigation or for statutory intervention, either through primary legislation or through the Order to be made under section 16(5) of the Broadcasting Act 1990 which will define independent production. Intervention would have serious implications for broadcasting and competition policy, copyright law and practice, and United Kingdom trade, and the Government are not convinced that it would be beneficial. Its effects on the broadcasters and independent producers themselves in a time of change and increasing competition cannot be foreseen.

The issue is not, however, necessarily closed for ever. The market in independent productions will inevitably change as the 25 per cent. quota takes effect and new broadcasters play a greater part in the market. An investigation under competition legislation is always a possibility if abuses emerge and the criteria for investigation are met.