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Peru: Media Merger Serving as Pretext for Manipulation

By: Rafael Arribas - @rarribas - Jan 17, 2014, 1:47 pm

EspañolPeru has started 2014 on a controversial note, with media conglomerate El Comercio attempting to increase their market dominance. They have purchased 54 percent of another media outlet, Empresa Periodística Nacional S.A. (EPENSA), in order to commercialize, distribute, and manage newspapers throughout the country.

President Ollanta Humala criticized the transaction recently, suggesting that media acquisition is a matter subject to Congress, claiming it poses a threat to freedom of expression.

“It is a shame that in Peru we have a group that practically owns mass communication media; that is dangerous for freedom of expression,” he stated. When pushed by reporters about the legal grounds for the acquisition, however, he conceded that “it is not illegal, right now it is not illegal.”

Some analysts believe the Peruvian government is using the media consolidation as a means to divert attention from other recent controversies. The scandal over wrongful protection given to Peruvian criminal Óscar López Meneses and Nadine Heredia — the First Lady — becoming president of the Nationalist Party are two examples that have otherwise drawn extensive public attention recently.

Media professionals have also joined the debate surrounding the printed press. Opponents of the acquisition argue that this operation violates the constitutional right for freedom of information. Others claim that this is strictly business — a negotiation carried out within the legal limits of a free market. The harshest critics come from the conglomerate Grupo La República, a corporation that previously tried, and failed, to buy EPENSA stocks.

Article 61 of the Peruvian Political Constitution mandates that the state promote free competition. The state is also against all practices that may limit that freedom, including abuse of dominant positions or monopoly. By the same standards, radio, television, and other forms of expression and social communication “cannot be exclusive, nor directly or indirectly monopolized by either the State or private parties.”

Keep in mind, we are not referring to a monopoly here: six newspapers out of 60 that are printed nationwide is not a number that requires further analysis. However, the constitutional precept of “hoarding” is noteworthy. The Radio and Television Law states, in article 22, that “radio and television cannot be subject to exclusivity, monopoly or hoarding, directly or indirectly by the State or private actors,” similar to what the Constitution says. But when defining the term “hoarding,” it specifically refers to the radio-electric spectrum and wave-bands available. This implies a finite market, limited by the number of frequencies available.

For the written press there is no such limited space or finite spectrum. On the contrary, the number of newspapers available depends solely on how many exist. Internet also provides a great amount of media, beyond those in print. In the end, the readers will determine which newspapers they want to read.

Despite this open space for print, on December 27, 2013, a Peruvian court ruled a petition for constitutional protection against El Comercio admissible in court. The petition argues that transferring 54 percent of EPENSA stock to El Comercio gives too much control to one organization. The decision on the legal grounds of the proposal is now in the hands of the judicial system. That is where the debate should take place from now on, without further politicization.

It is also important to consider the financial ramifications of the legal process for this year. Peru is set to receive investments valued at around US$10 billion in 2014, with a increased economic activity estimated at 5 or 6 percent. The government needs to take appropriate action to make such positive prospects feasible and predictable, establishing clear policies for promoting and protecting investments, while boosting market confidence.

Peru is facing a great challenge this year, and the government need not waste time interfering with a matter between two private organizations. Otherwise, we risk going down a path that is all too familiar in Latin America — a path where populist caudillos (strongman rulers) monopolize the press. Rather than protecting freedom of speech, they manipulate the press for their own interests, forgetting that it can and should act as the ultimate advocate for liberties.

Translated by Melisa Slep.

Rafael Arribas Rafael Arribas

Rafael Arribas is chief financial officer at the Institute for Liberty and Democracy (ILD) in Lima, Peru, holding the position since 2011. He joined ILD in 2008 and has carried out field research and institutional analysis in Peru, Ethiopia, Mali, Nigeria, and Timor-Leste. Follow @rarribas.