A regulatory mess

Media laws contradictory and insufficient

The regulatory framework regarding media concentration in Brazil is old and fragmented, with different norms for each segment. Not even the few existing legal provisions are actually applied: the ownership of media companies is not systematically verified by competent authorities, which limit themselves to receive and record information sent by these companies.

See also: Regulatory framework of the Brazilian media system: Study for the Media Ownership Monitor, MOM - Brasil 2017

No legal mechanism is in place to prevent cross-ownership, which means the same company controlling radio, TV, newspaper and online outlets. On the contrary, the country’s media system is built on cross-ownership, which reinforces ownership concentration in the hands of a small number of groups and indiviuals. This applies at the national as well as at the State and local levels.

The only law that limits cross-ownership is the one regulating the pay-TV market (Law 12.485 / 2011). Under this law, companies in the audiovisual sector and broadcasters cannot control more than a 50% share of telecommunications companies. Conversely, telecommunications companies may not hold more than 30% of broadcasters total and voting capital.

Due to the lack of limits in radio, television, print media and online portals ownership, Grupo Globo, for example, plays a central role in the free-to-air TV, cable TV, Internet media and radio markets. Globo Network is the free-to-air TV market leader; content generated by its GloboSat subsidiary, (including GloboNews and dozens of other channels) leaves its mark in cable TV; Globo.com is the largest Brazilian online news portal; and two of its radio networks, Globo AM/FM and CBN, are among the ten largest in terms of audience.

The same is true for other groups such as Record and RBS, respectively: Record group operates RecordTV and RecordNews in free-to-air TV, and its Correio do Povo newspaper and the R7 portal are among the largest in the country. RBS, for its part, runs a branch office in Rio Grande do Sul on free TV, its Zero Hora and Gaúcho Diary newspapers are among the most widely circulated and it also runs two radio networks (Gaúcha Sat national and Atlântida regional), ClicRBS online portal and many other investments in digital media as well as further printed publications.

Not even the Federal Constitution, whose Article 220, paragraph 5, states that "the media can not, directly or indirectly, be subject to monopoly or oligopoly" is taken seriously as the concentration of ownership of the country's mainstream media in the hands of a few groups illustrates. An analysis of other legal provisions shows that this pattern is consistant throughout and manifests a severe lack of compliance.

One of the few legal provisions to curb the ownership concentration is Decree-Law 236/1967, still in force. Article 12, Paragraph 2 limits the number of grants that a same company of open television can have in all national territory to ten and the number of grants per State to two. Also for radio concessions this decree-law establishes limits. The same owner can only have, for example, four local radios in medium waves and six in modulated frequency. The number of main content generating outlets and affiliated radios and televisions outlets listed at the media groups website shows that the mechanism of network formation renders this limitation meaningless.

The same law prohibits every major content generating broadcaster to subordinate to "other entities that are constituted for the purpose of establishing single direction or direction, through chains or associations of any kind". Again, the national networks go beyond these limits.

The network structure not only guarantees direct political and economic power to a few groups but also allows concentration and market control. The public agency that investigates prejudicial practices regarding free competition, arbitrates mergers and acquisitions and ascertains potential dominant positions and market power is the Administrative Council for Economic Defense (Cade). However, Cade does not carry out any relevant interventions in the broadcasting sector and in the activities.

Even more serious is the total freedom for groups to change, transfer, buy or sell partial or total shareholdings in the broadcasters companies, reinforced by a recent decision of the federal government. Law 13.424 / 2017, approved after a Provisional Measure of the government of Michel Temer. It suppressed the obligation of broadcasters to request prior approval for possible corporate changes, now limited to the obligation to only report such changes to the Ministry of Science, Technology, Information and Communication MCTIC) after they occurred.

This is one of the rare determinations for this kind of information to be made available - and even then only to the regulatory agency and not publicly. The National Telecommunications Agency publishes some data on the corporate composition of radio and television companies, through the Corporate Control Monitoring System (SIACCO), but does so without any legal determination.

Despite imposing these concession limits for broadcasting and even foreign capital participation for radio, TV and journalism companies, state instruments to gauge compliance with the standard are too weak. The Federal Executive, which has the constitutional competence to regulate the broadcasting sector, can not perform its duties effectively. The same is true for regulatory agencies. The Ministry of Science, Technology, Innovation and Communications (MCTIC), heir to the specific folder of the Communications (extinct in May 2016), has an extremely small team to monitor the number of radio and TV stations granted, in addition to the thousands of titles of newspapers and magazines.

The lack of public and reliable information on MCTIC supervision and on sanctions and punishments applied to broadcasters also makes it difficult to accurately measure how are these legal requirements considered during the licensing process. The data unavailability about the owners on broadcast companies, on service providers and on the changes in shareholding composition are further evidence of the lack of political disposition to guarantee an effective monitoring of the limits established by law.

 

 See also:

Regulatory framework of the Brazilian media system: Study for the Media Ownership Monitor, MOM - Brasil 2017

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