THE INVESTIGATION into media ownership in Ireland was sparked by a call from the Competition Authority, and not Independent News & Media (INM), the Government insisted last night.
Minister for Enterprise Micheál Martin has given an advisory group, chaired by Paul Sreenan SC, three months to advise if existing competition law sufficiently covers the need to maintain diversity of opinion when deciding on media mergers.
The Competition Authority urged Mr Martin to carry out the inquiry after it had difficulties in deciding on the takeover of Emap's Irish radio stations - Today FM, FM104 and Highland Radio in Donegal - by Denis O'Brien's company Communicorp. Mr O'Brien has since agreed to sell FM104.
The authority concluded that while it could measure the business impact of the takeover, it did not have "the expertise" to decide on the need to maintain plurality in the Irish media.
INM was one of dozens of companies to reply to Mr Martin's call last December for submissions on the need for possible changes to the Competition Act 2002.
A number of Sunday newspapers yesterday reported that INM had said in its submission that restrictions should be imposed to prevent any single person, or company, controlling large sections of both print and broadcast media.
The inquiry ordered by Mr Martin will be part of the "current review of the operation and implementation of the Competition Act 2002", and will report before the end of July. Mr Martin said: "It is appropriate in the context of the current review of the Competition Act 2002 to have a specific look at the existing criteria and arrangements for considering and assessing how a proposed merger might affect the diversity of views and the concentration of ownership within and across media businesses."
Under the Competition Act, the authority is required only to investigate the effect on competition that a merger or takeover could have on the market, though the Minister retains powers to veto deals in the public good.
The advisory group's members are Dublin City University professor Colum Kenny; Arts Council chairwoman Olive Braiden; Broadcasting Commission of Ireland (BCI) chief executive Michael O'Keeffe; and Peter Cassells of the National Centre for Partnership & Performance. Another person has still to be appointed.
Rejecting charges that the inquiry has been spurred by INM's actions, the Department of Enterprise said the announcement would have been made some weeks ago but for delays in replies from some potential members.
Mr O'Brien has amassed a 21 per cent stake in INM, making him the second largest shareholder after Sir Anthony O'Reilly.
A spokesman for Mr O'Brien confirmed last night that the businessman would commission an update on a controversial report by a US academic ahead of INM's next annual general meeting.
The move is expected to increase tensions further between Mr O'Brien and the O'Reillys. Gavin O'Reilly, second-in-command at INM and Sir Anthony's son, labelled Mr O'Brien "a dissident shareholder" at the company's results presentation last week.
Mr O'Brien's spokesman said the businessman would ask Dr Stephen Davis, of the Yale School of Management, to update the report he wrote last year which was highly critical of the corporate governance of the company. INM rejected the findings of the report.
The BCI, which has the power to block media mergers on the basis of cross-media ownership, is expected to examine Mr O'Brien's media interests if his INM shareholding reaches 25 per cent under its ownership and control policy.
The National Union of Journalists (NUJ) gave a "guarded welcome" to the establishment of the advisory group, calling on Mr Martin to broaden its remit. Séamus Dooley, Irish secretary of the NUJ, said: "The debate about media control and ownership must go beyond the personal ambitions of key players within the industry."
