Gov't Control Suffocates Media Freedom Newspaper Bill Seeks to Put Chosun Under Regular Surveillance Interference in Editing, Readership and Advertising Newspaper Bill Violates Principle of Free Enterprise, Managerial Rights Asahi Reports on Korea's 'Newspaper Reform' Uri Party Narrows Market Limits to Major Newspapers

The provision to put a limit on newspaper market shares is particularly poisonous. The newspaper bill stipulates detailed provisions to support pro-government newspapers like the Hankyoreh, Seoul Daily and Ohmynews, while placing stricter restrictions on independent media critical of the government like the Chosun Ilbo and Dong-A Ilbo. The bill’s Article 16 applies higher standards than the existing Fair Trade Law in defining newspaper companies as monopolistic: when the leading firm takes over 30 percent of market share or the top three more than 60 percent, they will be designated as monopolistic (the Fair Trade Law sets the ratios at 50 and 75 percent). The Chosun Ilbo, Dong-A Ilbo and Joongang Ilbo are expected to be targets of the bill. The ruling party explained that the bill aims to ease the deepening monopoly and oligopoly of some newspapers. But the party has been criticized for legislating the bill to attack specific newspapers, as it did not devise measures to counter monopoly and oligopoly by broadcasters in the broadcasting bill, which the party initiated at the same time as the newspaper bill.

The ruling party-proposed newspaper bill allows the government to provide financial support to pro-government newspapers like the Hankyoreh, Seoul Daily and Ohmynews. According to Article 28 of the bill, a newspaper development fund can be established with the money offered by the government to simulate diverse public opinion, to nurture newspapers and online media companies and to support improving distribution structure of newspapers. However, Chosun, Dong-A and Joongang, which are expected to be classified as monopolistic dailies, will be unable to receive the financial aid. The bill’s Article 36 also enables the government to directly help the sales activities of minor newspaper companies by building a distribution foundation.

A limit on newspaper market shares is unprecedented in foreign countries. In the U.S., newspapers based in a certain region are published, and in many regions, one newspaper dominates more than 50 percent of market share, as is the case with the Washington Post. In Japan, the Yomiuri Shimbun, Asahi Shimbun and Mainichi Shimbun hold 100 percent of the central dailies’ nationwide market share, and they take more than 70 percent of market share even when regional and economic newspapers are calculated. Moreover, the three Japanese major newspapers operate public broadcasting companies.

In Britain, News Corporation, which owns The Times, holds 31.2 percent market share and operates a TV company as well. In Australia, News Limited holds 68 percent share of the national newspaper market and Media Print holds 57.4 percent of the newspaper market in Austria. But none of these advanced countries have laws that limit the newspaper market shares, except in times of mergers and acquisitions.

Lawyer Choi Yong-seok said that applying the 30 to 60 percent limit regulation only to the newspaper market is not only tantamount to an infringement on the right of business guaranteed by the constitution, but also violates the principles of banning excessive regulation.

Lawyer Park Jun-sun said the regulation, in essence, runs counter to the free market economic system, private ownership and the freedom of economic activities -- things that are fundamentals in managing the nation and stated in the constitution. Without making an issue out of the broadcasting market and other markets, the regulation could be seen as unconstitutional, Park said.

In relation to artificial limits on market share, there was a case in which the Constitutional Court ruled them unconstitutional. In 1996, the court ruled against liquor tax laws that required stores to make locally distilled soju (a Korean liquor) make up more than 50 percent of soju purchases, saying the laws infringed on free enterprises and competition, and restricts the freedom of consumers to choose products.

The newspaper bill seems to severely regulate not only the three major newspapers -- the Chosun, Joongang and Dong-A -- but also the Korea Economic Daily, Maeil Business Newspaper and some local newspapers, if the law is strictly applied. According to an analysis by the Korea Press Foundation of newspaper management in 2003, the revenues of the three major newspapers accounted for 44.2 percent of all newspapers and 68.6 percent of national newspapers. Therefore, if the limit regulation is applied to only daily newspapers, the market shares of economic newspapers and local newspaper would have to be calculated separately, causing controversy over equity between major and minor newspapers.

Communication Prof. Hwang Keun at Sunmoon University said compared to what is happening in foreign countries, the controversy taking place in the country now is a very childish one. He added that because in France’s case, where the newspaper market share is limited to 30 percent for clear merger and acquisitions, it is hardly understandable for the government to justify the newspaper bill by taking the French case as an example.

(Jin Sung-ho, shjin@chosun.com )