Author: Sebastian Cuttill

When asked why, in the absence of legislation to put the DMU on a statutory footing, the CMA had not opened a market investigation reference into digital advertising, Dr Coscelli stated that this tool is not well suited to complex remedied. The CEO argued that changes rapid changes in technologies mean a ‘one off’ intervention will be effective in dictating detailed remedies that will be sustainable in the long-term.

However, the regulator stated that they delay in legislation means that the opening of a market investigation reference will be discussed at the CMA’s board meeting in March. There are also active global investigations in the same area which could have very positive results for the UK, Dr Coscelli added.

Dr Coscelli highlighted the actions that the CMA is already taking on areas of interests to publishers, including gaining commitments from Google on its Privacy Sandbox proposals, but pointed out that any measures on payment for content will require new legislation.

The regulators also recognised frustration at the sluggish implementation of the new pro-competition regime for digital markets, to be enforced by the DMU. This follows criticism from competition lawyers Professor Damien Geradin and Dr Liza Lovdahl-Gormsen who answered questions from the Committee last week.

Dr Lovdahl-Gormsen stated that the CMA have not used the powers they already possess, adding that regulators such as the ICO and Ofcom also have a significant role to play.

Professor Geradin described the multiple rounds of consultation which have delayed legislation as a ‘British disease’, also stressing that the new pro-competition regime will be critical for publishers. He added that publishers continue to suffer from a lack of competition and choice in the digital advertising market.

Regarding the regulation of tech platforms, the report notes: ‘the argument that ‘something should be done’ now appears to be won and we are moving rapidly towards implementation’. However, it cautions that ‘the impact on consumers is likely to take years to play out, with much potential for unintended consequences.’

Media leaders who responded to Reuters’ questions on regulation of tech companies had mixed expectations that government action will create a more favourable environment for journalism. 41% expect policymaking interventions to help journalism in 2022 (up from 18% in 2020), whilst 25% believe policies will make conditions worse. 34% anticipate that intervention will neither help or hurt the media.

Changes in the regulatory environment for online platforms are coinciding with a shift in the third-party platforms that publishers are prioritising. Of the publishers surveyed, a net score of 54% said they will be putting more effort into distribution and engagement on Instagram, 47% will be increasing their work on Google, whilst 44% will be doing more work on TikTok. Overall, a new score of 8% will be putting less effort into engagement via Facebook.

It is hoped that efforts to regulate big tech will result in increased revenues for publishers: a lack of cash was reported as the main barrier to innovation. This has resulted in a ‘back to basics’ approach for 2022, with 67% of publishers saying they will spend most of their time bolstering the effectiveness of existing products.

The Report also posits that 2022 could be the year when publishers begin to join forces to counter challenges from platforms: joint lobbying on policy, greater advertising and common login initiatives, and more content sharing are potential initiatives highlighted.

The CMA is consulting on the themes it intends to focus on in 2022/23. These are:

– Protecting consumers from unfair behaviour by businesses, during and beyond the COVID-19 pandemic

– Fostering competition to promote innovation, productivity and long-term growth right across the UK

– Promoting effective competition in digital markets

– Supporting the transition to low carbon growth, including through the development of healthy competitive markets in sustainable products and services

– Delivering its new responsibilities and strengthening its position as a global competition and consumer protection authority

The key theme of promoting effective competition in digital markets is of particular relevance to publishers. The non-statutory Digital Markets Unit (DMU) was established in April 2021, and will oversee a new regulatory regime for the most powerful digital firms. The Government anticipates that one of the ‘positive externalities’ emanating from the new regime will be increased advertising revenues for publishers resulting from a rebalancing of the online advertising market.

Following the consultation on the new pro-competition regime (to which PPA responded) the CMA is working closely with Government. The Government has committed to legislating when Parliamentary time allows in order to give powers to the DMU; in the interim, the non-statutory DMU is operationalising and preparing for the new regime. In the meantime, the CMA continues to investigate competition cases in digital markets. This includes its investigation of Apple following complaints that its terms and conditions for app developers are unfair and anti-competitive.

The CMA’s plans to support the transition to a low carbon economy are also given prominence. These include the Green Claims Code which provides guidance to help businesses comply with the law, preventing consumers being misled about environmental claims in advertisements, marketing material, branding (including business and trading names), on packaging or in other information provided to consumers. All aspects of a claim may be relevant. The principles are:

– Claims must be truthful and accurate

– Claims must be clear and unambiguous

– Claims must not omit or hide important relevant information

– Comparisons must be fair and meaningful

– Claims must consider the full life cycle of the product or service

– Claims must be substantiated

From this month, the CMA is beginning a review of environmental claims (it should be noted that the Code is not a new law, but rather guidance to demonstrate how the law applies to environmental claims). Businesses that fall foul of the law may be subject to civil and criminal enforcement actions, including fines and litigation.

Notably, the ICO is engaging with Government over proposed reforms to the Data Protection Act following Brexit. Last year, the PPA responded to a Government consultation on the plans, informed by an expert group drawn from member organisations. The ICO has previously stated: ‘As the proposals are developed, the devil will be in the detail. It will be important that Government ensures the final package of reforms clearly maintain rights for individuals, minimise burdens for business and safeguard the independence of the regulator.’

Also of relevance to publishers, the ICO is engaging with Government over the introduction of the Online Safety Bill. The Bill will place a ‘duty of care’ on digital platforms to combat illegal content, content that is harmful to children, and content that is harmful to adults. Protections are proposed for ‘recognised news publishers’ and a broader swathe of content produced for the purposes of journalism.

In addition, the ICO is currently reviewing submissions made concerning its consultation on a draft Journalism Code of Practice, including a response sent by PPA. The Code, which is statutory under section 124 of the Data Protection Act 2018, provides practical guidance to help journalists and media lawyers understand data protection law and comply effectively with its requirements. The ICO will also develop complementary resources to support more day-to-day journalism and smaller organisations.

In his application for the role of Commissioner, Edwards stated: "It will be a priority for me and my team to identify ways in which we can reduce compliance costs, particularly for small to medium enterprises, by providing them with tools to understand and apply the law without the need to incur large professional fees."

Since the advent of the pandemic, the consumer magazine and business media industry has undergone an unprecedented period of disruption. Yet that disruption, combined with the prevailing digital transformation of specialist media businesses, presents an immense opportunity.

The rapid proliferation and dissemination of content online allows consumers to search for very specific topics, whilst the algorithms employed by big tech can find that information with a startling degree of accuracy. Across the globe, organisations of all sizes and focuses are becoming reconciled to the fact that the future of media is destined to be specialist audiences and verticals. The mature specialist media sector in the UK is well-positioned to capitalise on this gravitation towards expertly produced content on highly focused topics.

The rich audience insights that publishers can gain from consumers has already opened up myriad revenue streams. This diversification has been a defining factor in robust performances from many publishers throughout the pandemic; a deep understanding of consumer tastes allows publishers to pivot to consumer trends with astounding agility.

It is important to note that, despite the move towards digital, the print magazine remains central to most publishers’ identity. In an ever more crowded and noisy online space, a print publication can be key in garnering readers’ trust. As concerns grow over media literacy, and the rising tide of misinformation and disinformation, specialist publications stand out as a reliable source of information on a wide range of topics. Indeed, Ofcom’s News Consumption in the UK 2020 Report shows the public consider magazine media to be more trustworthy and accurate than any other media medium.

So, what does all this mean for the future? As our industry looks forward to 2022, we should be confident that specialist media organisations will increasingly become the public’s favoured destination for trusted and reliable content. Through the written word, video, podcasts, advertising, events, data insights, and product marketing, publishers are able to serve an individual’s deep personal interests in the format they most favour.

All this (well warranted) optimism does come with a caveat: the rapid development of the online sphere has left regulators and legislators struggling to catch up. Further complicating matters, the nature of digital regulation means that decisions made by a single national regulator can impact a tech giants global strategy, or influence the policy of Governments worldwide.

In the UK, the Government is preparing to bring forward a Digital Competition Bill which will put the new Digital Markets Unit (DMU) on a statutory footing. The DMU will oversee a new form of regulation for the very largest digital platforms that will look to prevent anti-competitive harms before they occur. Successful implementation could see a rebalancing of the digital advertising market, ensuring publishers can garner fair remuneration for the value that their content brings to digital platforms.

In addition, the Government is looking to bring forward the Online Safety Bill, a ground-breaking attempt to regulate social media and tech giants, giving a ‘duty of care’ to remove harmful or illegal content and protect children. Here, it is critical that content produced by specialist media publishers is protected from the scope of the Bill, ensuring that the public can access trusted information on a range of topics (which is also key for the Government’s online media literacy plans).

Meanwhile, work is also underway to set the new direction for the UK’s data regime, as Brexit means the UK is no longer bound by the EU GDPR. Whilst a more risk-based and proportionate regime could give publishers the freedom to innovate at pace, there is a risk that stark divergence from the EU GDPR could endanger the data adequacy agreement with the EU.

All of these policy initiatives bring a mix of opportunity and risk, and trade-offs between competing Government objectives (such as competition and user privacy) will need to be finely balanced to create a coherent regulatory environment. By championing the interests of publishers, deciphering the complex nature of the issues facing us, and bringing the industry together, PPA is looking forward to what is set to be a defining year for our industry.

The Joint Committee of MPs and peers scrutinising the draft Online Safety Bill has said the proposed legislation requires greater protections for news publisher content. The Committee’s chair, Damian Collins MP, said that the recommendations aim to regulate an industry which has become “the land of the lawless”. The Bill is widely viewed as one of the most far-reaching attempts to regulate online content seen anywhere in the world and could have implications for digital regulation far beyond the UK.

PPA has made the case that the draft Bill fails to recognise the value of specialist publishers’ content, arguing that content that is already subject to independent regulation should not be impacted by the duty of care placed on tech giants. The Committee recognised PPA’s concerns regarding the scope of the definitions of content to be protected, stating: “The Professional Publishers Association called for the “news-related material” requirement to be changed in favour of including consumer magazines and business media, which may currently fall outside of the definition if not focussing on current affairs”.

Accordingly, the Committee recommended that Government work with PPA to create a definition which encompasses specialist publications, stating: “We are concerned that some consumer and business magazines, and academic journals, may not be covered by the Clause 40 exemptions. We recommend that the Department consult with the relevant industry bodies to see how the exemption might be amended to cover this of, without creating loopholes in the legislation”.

In addition, the Committee recommended that the exemption for news publisher content should be strengthened in order that such content “should not be moderated, restricted or removed unless it is content the publication of which clearly constitutes a criminal offence, or which has been found to be unlawful by order of a court within the appropriate jurisdiction”. The Report is expected to be influential, with Secretary of State Nadine Dorries having pledged to look at the recommendations “very seriously”.

The Government must respond to the Committee’s report within two months, with the legislation expected to be passed in late 2022 or early 2023. PPA will look to engage with the Department for Digital, Culture, Media and Sport to create a definition of “news-related material” which encompasses specialist publications, recognising our sector as an indispensable element of the UK’s media ecosystem.

In July, the VAT exemption for the importation of goods with a value of €22 or less into EU member states was removed, meaning all goods imported into the EU are subject to VAT. Although magazines are zero-rated for VAT purposes in the UK, most EU countries operate a reduced or full rate as there is no universal exemption.

The PPA has produced a Guidance Document on the changes, which explains the new regime and possible courses of action publishers can take in greater detail. You can access the Guidance Document by clicking here.

As PPA previously advised, if publishers and sellers do not take action it is likely that subscriptions will come into the EU on a Delivered Duty Unpaid (DDU) basis – means the customer pays VAT and administration fees in order for the purchase to be released to them.

Italian Customs are now clamping down on non-compliant items, which is leading to delays in Italy. Poste Italiane is conducting thorough checks, and demanding proof of clearance, of items originating from outside the EU – including magazines and periodicals. This has also occurred in Sweden and Belgium. There is a possibility that similar clampdowns could occur in other EU countries, creating considerable disruption across multiple destinations.

These clamp downs serve as a reminder that it is imperative for publishers to work towards becoming compliant to avoid precisely these sorts of issues: it is now inevitable that compliant mail will have faster transit times.

PPA Strategic Partner Air Business, a market-leader in global mail, fulfilment, distribution and subscription management, said: "The clampdown of VAT and customs compliance in Italy is not unexpected, and supports our belief it would be unwise to gamble on whether the rules would be strictly applied or not. We have always believed it was a case of ‘when’, not ‘if’, and evidence suggests other countries are following behind – there are reports in other EU countries of subscribers being asked for local taxes before their magazine is delivered."

To mitigate the risk of serious delays to mailings to the EU, we encourage publishers to fast-track their processes towards compliance, and we would be happy to discuss any concerns or solutions with PPA members – please contact Rob Barham at Robert.Barham@airbusiness.com, or the PPA’s Public Affairs Executive sebastian.cuttill@ppa.co.uk, for more information.

PPA Scotland Chair John Innes and PPA Public Affairs Executive Sebastian Cuttill met Scottish Cabinet Secretary for the Constitution, External Affairs and Culture Angus Robertson MSP to discuss the unique qualities of the Scottish industry and the key issues facing publishers.

The PPA emphasised the key role that publishers play in informing the Scottish public with expertly researched information, and the multi-platform nature of modern publishing businesses undergoing a digital transformation. Speaking as a former journalist, Mr Robertson acknowledged the key role that the fourth estate plays, with specialist publishers a key element of the media landscape.

Publishers have worked immensely hard to negotiate pandemic impacts, and now sharp rises in print and paper costs are threatening recovery. The PPA called on Mr Robertson to extend the tax relief promised to other creative industries in the Scottish National Party’s 2021 Election Manifesto, also noting that newspaper publishers continue to benefit from the Business Rates Relief introduced during the pandemic. Mr Robertson said he would consider the points made regarding giving publishers parity with other creative industries ahead of presenting his Culture Recovery Paper to the Scottish Cabinet.

The PPA also emphasised the importance of education in supporting the future of publishing; modern publishers need staff with a STEM background to drive their digital transformation, as well as creatives on the editorial side. PPA suggested that benefits could be joined up to support individuals getting work, with the creative industries used as a pilot scheme; in addition, Government support for freelancers through tax breaks would provide a critical boost to creatives.

The need for Government to support the transition to a net-zero economy was explored; support for paper and print industries in the supply chain to decarbonise will allow publishers to create a more sustainable print product. The PPA pointed out that PPA Scotland publishers, focused as they are on specific areas of interest, can play a key role in informing the public by providing information on sustainability and eco-friendly practices that consumers can apply to their own lives.

PPA will continue to engage with the Scottish Government as the Culture Recovery Paper is developed. If you have any questions, or would like to discuss policies that would help your business, please contact the PPA’s Public Affairs Executive Sebastian Cuttill: sebastian.cuttill@ppa.co.uk

The Birmingham Commonwealth Games (Advertising and Trading) Regulations 2021 have been published, setting out the details of the advertising and trading offences introduced by the Birmingham Commonwealth Games Act 2020.

The Regulations, due to come into force on 19 November, set out exceptions to the restrictions, and provide further information on the specified games locations (Schedule 1) and exactly where (Schedule 2) and at what time (schedule 3) the restrictions will apply.

Exceptions to the advertising restriction include newspapers and periodicals. However, the exemption does not apply if:

– in the street if the selling, distribution or provision is done in a manner that causes undue interference or inconvenience to persons using the street;

– if the version of the newspaper or periodical sold, distributed or provided has been created for the purpose of sale, distribution or provision only to, or principally to, members of the public who are in, or in the vicinity of, a specified Games location; or

– which is accompanied by any item if the whole or principal purpose of including that item is to promote a product, service or business specifically to members of the public who are in, or in the vicinity of, a specified Games location.

PPA will be monitoring for the release of guidance on the practical operation of the restrictions, which the Games Organising Committee has committed to producing.

If members have any questions regarding the restrictions, please contact sebastian.cuttill@ppa.co.uk

How we discuss climate change is just as critical as whether we talk about it at all, rather than overloading people with scientific jargon, bringing out the human element in climate stories will invite people into the conversation. This particularly important in the ‘culture wars’ era, where it is essential to create a shared narrative, rather than one that fosters polarisation.

Indeed, a fatalistic angle can induce guilt in shame in readers or viewers, which disincentives action on the climate crisis. An emphasis on the urgency of the problem must be balanced with the public’s ability to take action.

Zarina Ahmad, PhD Researcher and Climate Change Communicator, pointed out that there is an unfounded assumption that minority groups are focused on other issues and not focused on climate: this view has no evidential basis. In fact, minority communities want to be included further, and effort should be made to connect groups to social justice issues that are being impacted by climate change.

Specialist publishers can play a key role in informing and motivating the public to take action. By focusing on a particular passion or industry, publishers have a great opportunity to connect sustainability and environmental stories with people’s particular area of interest.

If you are interested in getting involved with the PPA’s work on sustainability, please contact Michael Sturges – michael.sturges@ri.seor Sebastian Cuttill – sebastian.cuttill@ppa.co.uk