Australia - Foreign Ownership Of Media Assets - Registration Requirements.
Legal News & Analysis - Asia Pacific - Australia - Regulatory & Compliance - FDI
3 October, 2018
New registration requirements for some foreign stakeholders in Australian media assets came into force in Australia on 1 September 2018, but existing controls on media ownership remain unchanged.
The Broadcasting Legislation Amendment (Foreign Media Ownership, Community Radio and Other Measures) Act 2018 (BSA Amending Act) came into force on 1 September 2018.
The BSA Amending Act introduces new registration requirements for foreign stakeholders with company interests of 2.5% or more in traditional Australian media assets. It does not otherwise substantively alter existing ownership and control restrictions, and does not restrict foreign media ownership.
The deadline for notifying the Australian Communications and Media Authority (ACMA) of existing interests is 28 February 2019.
Back in 2006, the Howard Government took steps to relax previous restrictions on foreign ownership of Australian media. As such, for the last two decades, foreign ownership of media has not been specifically regulated under the Broadcasting Services Act 1992 (BSA) but has been regulated under the Foreign Acquisitions and Takeovers Act 1975 (FATA). Currently a foreign person acquiring an interest of at least 5% in an Australian media business is prescribed as a significant action and a notifiable action under FATA by the Foreign Acquisitions and Takeovers
Regulation 2015. All media investments (both domestic and foreign) are also subject to:
- the media-specific ownership and control rules under the BSA; and
- section 50 of the Competition and Consumer Act which prohibits mergers/acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market. The ACCC has issued guidance on its approach to media mergers by way of the ACCC Media Merger Guidelines 2017.
As we have reported previously here, in 2017 the Turnbull Government secured the passage of its media reform package including headline reforms to amend the media-specific ownership and control rules under the BSA to remove the "75 per cent" audience reach rule and the "2 out of 3" cross-media rule (Media Reform Package).
In order to secure cross-bench support for the Media Reform Package, a number of ancillary media issues were addressed including, at the request of the One Nation party, the introduction of a public register of foreign-owned media assets now implemented in the form of the BSA Amending Act.
This means that foreign ownership of media assets is, once again, dealt with under the BSA.
However, these changes require notification only and do not prohibit or restrict foreign investment.
The substantive position regarding the permissibility of foreign investments remains as before.
Register of Foreign Owners of Media Assets
The BSA Amending Act introduces the following key requirements to the BSA.
The ACMA is to maintain a Register of Foreign Owners of Media Assets.
Foreign stakeholders are required to notify the ACMA of company interests in Australian media companies.
The notification obligations apply to foreign persons (as defined in the FATA) having company interests of 2.5% or more in any:
- commercial television broadcasting licensee;
- commercial radio broadcasting licensee; or
- constitutional corporation publishing a newspaper associated with the licence area of a commercial television broadcasting licensee or commercial radio broadcasting licensee.
- The notification obligations arise:
- within 30 days of becoming a foreign stakeholder in an Australian media company;
- within 30 days of ceasing to be a foreign stakeholder in an Australian media company;
- each year, within 30 days of the end of the financial year, if a person was a foreign stakeholder in an Australian media company at the end of the relevant financial year;
- by the end of February 2019 if a person was a foreign stakeholder in an Australia media company on 1 September 2018; and
- if the ACMA makes a request to a foreign stakeholder in an Australian media company.
- The notification requirements also apply to executors and administrators of a person's estate, as well as liquidators.
- The notification obligations have:
- civil penalty provisions, meaning that pecuniary penalties may be ordered by the Federal Court. For the purpose of determining the relevant penalty, the BSA Amending Act provides that a separate contravention occurs each day whilst the contravention continues. The maximum pecuniary penalty payable by a person for a contravention is not to exceed 300 penalty units (currently $63,000) for a body corporate, or 60 penalty units (currently $12,600) in any other case; and
- designated infringement notice provisions, meaning that the ACMA may issue warnings and infringement notices. Infringement notices for breach of these provisions may carry a pecuniary penalty of up to 60 penalty units (currently $12,600) for a body corporate, or 10 penalty units (currently $2,100) in any other case.
For further information, please contact:
Anthony Foley, Partner, Baker & McKenzie