The Government has published a consultation on recent proposals to ban foreign state ownership of, or control over, UK newspapers and news magazines.

The proposed Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2024 will create a new ‘foreign state intervention regime’ for newspapers and periodical news magazines. Under that regime, the Secretary of State will be required to issue a notice where there are reasonable grounds to believe that a merger involving a UK newspaper or news magazine has given, or would give, a foreign state (or a person associated with a foreign state) ownership, influence or control. This would prompt an investigation by the Competition and Markets Authority and if it concluded that a merger would result in a ‘foreign state newspaper merger situation’, the Secretary of State would be required to make an order to block or unwind the merger.

As the Government consultation document explains, the efficacy of any such regime rests on ensuring that the definition of a ‘foreign power’ is sufficiently broad to capture the various ways in which a foreign state might seek to control or influence a UK newspaper or news magazine, but avoids any unintended consequences on investment in UK media and businesses. To address this, the Government is proposing to include an exemption for state-owned investment organisations such as sovereign wealth funds or public pension reserve funds, so long as certain conditions are met, including restrictions on the maximum shareholding or voting rights (normally 5%, but in certain circumstances 10%). A de minimis limit is also proposed, permitting a shareholding of up to 0.1% before triggering any intervention. Finally, the Government proposes an exemption for retail investment products, which is aimed at ensuring that “a foreign power will not be treated as being able to control or influence the policy of a newspaper owner simply because an associated person has made an investment in a legitimate investment fund which owns shares in a newspaper owner”.

The consultation closes on 23 May 2024 and can be read in full here