Murdoch's paywall plans could attract anti-trust regulation

Posted by Nestor Bailly on November 6, 2009 at 3:15 PM

In a recent conference call with several reporters on New Corp's quarterly earnings, Rupert Murdoch admitted to problems and delays in implementing a universal paywall for his news agencies (the delay being "with everything").

However, exactly how News Corp plans to go about charging for content has become a suspect issue. It is widely accepted that if paid online news content is to work, all or nearly all providers would have to start charging at the same time.

Because of this, News Corp has begun talking to other news sources about its plans to start charging, thus raising concerns about competition in the media industry and the involvement of regulators.

Alan Davis of the Pinsent Masons legal firm warned that if Murdoch's discussions with other news organizations got as far as setting prices, then government regulators would have to get involved.

"Competitors should not be discussing business strategy for charging for online content and should certainly not be discussing pricing," he said. "Be under no doubt the competition authorities would be interested about why, and what, conversations are taking place. It is the nature of regulators to be suspicious."

When Murdoch announced that he intended to charge for access to all his news websites, he said that he believed other publishers would follow suit. Davis said that a pattern of such statements, in effect a signal to rivals to do the same, can be interpreted as a "tacit cartel", even if no meeting or explicit deal has taken place.

However without knowing any specifics, it would be difficult to determine the regulatory issues. A way of getting around regulation would involve justifying joint ventures as more efficient and benefitting the consumer, which for online paid content would be a hard sell.

Source: MediaGuardian