MDA conducts second public consultation on proposed changes to media market conduct code

Dated: 25 September 2007

The Media Development Authority of Singapore (MDA) is conducting a second public consultation on proposed changes to the Media Market Conduct Code (“Code”) to promote fair market conduct and effective competition in Singapore’s media industry.

In its first public consultation exercise conducted from 23 March to 11 May this year, MDA received six written comments. Commenting parties included Mediacorp Pte Ltd, Singapore Press Holdings Ltd, Singapore Telecommunications Ltd, STAR Group Limited, Starhub Cable Vision Ltd and Wong Partnership, addressing a wide spectrum of issues.

The broad issues addressed included MDA’s policy principles and approaches, such as side-by-side adoption of entities-based and market-based approaches towards dominance and market definitions, and MDA’s enforcement practices and powers, such as widening the scope of the revised Code’s application. The specific issues addressed included price regulation, prohibition on anti-competitive leveraging, mandatory bundling, and administrative review of MDA’s decisions.

In general, respondents were supportive of the goals and regulatory principles of the first version of the revised Code (“1st revised Code”), and of MDA's proposal to adopt more transparent enforcement procedures for investigating cases of anti-competitive conduct.

Following an extensive review of the written comments, and based on MDA’s policy objectives and relevant market developments, MDA has proposed revisions to the 1st revised Code, and is releasing the second version of the revised Code (“2nd revised Code”) for public comments.

Explained Ms Ling Pek Ling, Director of Media Policy: “The revised Code is aimed at fostering a pro-competitive climate while continuing to encourage the industry players to act responsibly. MDA has made further refinements to the Code after considering respondents’ comments to provide greater clarity and transparency.”

Bearing in mind that policies need to encourage continuing and new market developments in the media industry, the 2nd revised Code retains the scope of the current Code and widens the Code only in specific areas of positive obligations. For example, MDA proposes to widen certain provisions, such as access to advertising capacity, where a Dominant Person must provide any media licensee with the ability to purchase advertising capacity to promote its media service(s) on reasonable and non-discriminatory prices, terms and conditions. Other areas of positive obligation which MDA proposes to widen would include Part 9 of the 2nd revised Code (i.e. Essential Resources). This will address the blurring of boundaries between previously distinct traditional and new media markets while maintaining the light touch regulatory approach for class licensees.

There was strong response on the introduction of price regulation in the 1st revised Code. MDA had introduced this to ensure that public interest can be served adequately. After carefully considering respondents’ comments, further review of international best practices, and consultation with relevant regulatory agencies, MDA agrees to explore and support other means to help ensure competitive pricing by providers. This provision has been removed from the 2nd revised Code and MDA will focus on other regulatory means, such as fostering competition in the market and leveraging existing provisions in the Code, to check against excessive fees.

A few respondents also had strong views on the introduction of anti-competitive leveraging in the 1st revised Code. MDA observes that cross leveraging per se is not anti-competitive. MDA proposes to make appropriate amendments to the anti-competitive leveraging provision in the 2nd revised Code to provide clarity that the provision is aimed at prohibiting cross leveraging that unreasonably restrict competition in any media market in Singapore.

In addition, there was feedback that MDA’s current consolidation thresholds need to be reviewed. After careful consideration and consultation with relevant regulatory parties, which determined that the safe harbour adopted by the Competition Commission of Singapore (“CCS”) is appropriate for the media industry, MDA proposes to adopt the same merger thresholds as the CCS. This means that no “long form” application to MDA is necessary unless the post-consolidation entity will have a market share of 40 per cent or more;or the post-consolidation entity will have a market share of between 20 to 40 per cent and the post-consolidation combined market share of the three largest regulated persons or ancillary media service providers, or a combination thereof, is 70 per cent or more.

MDA also proposes to reinstate the avenue of appeal to MDA for any party that is aggrieved by any act, direction or decision to the Code.

More details on the proposed revisions for the 2nd revised Code are in MDA’s Explanatory Note II on the First Triennial Review of the Code of Practice for Market Conduct in the Provision of Mass Media Services which is available. All comments should be submitted to MDA on or before 5 pm, 23 October 2007. MDA targets to complete the review of the Code by end-2007.

Lynda Kang
Manager, Communications
Media Development Authority
Tel.    : +65 6837 9894
Email : lynda_kang@imda.gov.sg

Gay Chwee Hwa
Assistant Director, Marketing Communications
Media Development Authority
Tel.    : +65 6837 9344
Email : gay_chwee_hwa@imda.gov.sg

Formed in 2003, the Media Development Authority of Singapore (MDA) plays a vital role in transforming Singapore into a Global Media City and positioning it at the forefront of the digital media age. MDA spearheads initiatives that promote developments in film, video, television, radio, publishing, music, games, animation, media services and Interactive Digital Media. At the same time, in ensuring clear and consistent regulatory policies and guidelines, MDA helps to foster a pro-business environment for industry players and increase media choices for consumers. For more information, visit www.mda.gov.sg and www.smf.sg