Chapter 1 - The context of our review

web 2.0 and the news media

Before the invention of the web, mass publishing was largely a capital intensive business, reserved for those with access to multi-million dollar presses and costly physical distribution systems, or, in the case of broadcasting, expensive audio-visual recording and transmitting systems and costly government licences to use scarce airwaves.

Not only has the internet disrupted this model by reducing the barrier to entry to extraordinarily low levels, but it has also challenged the commercial model which had, for more than 150 years, funded the gathering of news and the professionalisation of journalism. Historically, newspapers’ profitability turned on their ability to deliver mass audiences to advertisers: now those audiences have migrated online, where news from myriad sources is available free of charge and where advertisers have a wide range of options for reaching consumers, including online retailing.

At the same time traditional news media must now compete with a vast spectrum of new publishers. Included in that spectrum are sites like WikiLeaks, and the giant news aggregators like Yahoo and Google News. Alongside these are the millions of bloggers, many of whom also aggregate and disseminate content produced by traditional news media.

And while only a very small percentage of these millions of digital publishers will have as their primary purpose the collection and dissemination of news, all are capable of publishing, and passing on, text and audio-visual information, instantaneously and without the fetters of lawyers, editors and fact checkers.

Like many other established institutions the internet has presented traditional news media companies with a raft of opportunities and challenges, some driven by the technology itself, others arising from this changing competitive environment in which they now operate. Foremost among these are:

  • the convergence of formerly distinct sections of news media on the web as traditional print publishers and broadcasters transform themselves into “multimedia companies” capable of publishing news in numerous channels;
  • the requirement for all news companies to respond to the demands of continuous news deadlines on the web and to be competitive in the “live” or “spot news” market;
  • the requirement for news companies to both participate in, and compete with, non-traditional news sources, including social media platforms such as Twitter and Facebook;
  • the challenge to the news media’s ability to retain control of, and monetise, exclusive content in an environment designed for copying, sharing, linking, repackaging and re-publishing.

This rapidly changing economic and competitive environment in which the traditional news media now finds themselves has given rise to a number of fundamental questions about the function and sustainability of the news media. Some, including The Economist, have gone so far as to suggest “[t]he mass-media era now looks like a relatively brief and anomalous period that is coming to an end.”10

Whether or not this prediction proves accurate, there can be no doubt the impacts of the internet on the traditional news media are profound.

Among the many issues under scrutiny in this challenging new context are the questions of media standards, and the legal and regulatory environment in which the news media operate.

United Kingdom and Australia

In Britain, the phone hacking scandal which has enveloped Rupert Murdoch’s publishing conglomerate, News International, has given rise to a wide-ranging independent inquiry into the “culture, practices and ethics of the press” led by retired judge Lord Justice Leveson.11 As well as investigating the specific allegations relating to News of the World, the inquiry has been asked to make recommendations:

a. for a new more effective policy and regulatory regime which supports the integrity and freedom of the press, the plurality of the media, and its independence, including from Government, while encouraging the highest ethical and professional standards;

b. for how future concerns about press behaviour, media policy, regulation and cross-media ownership should be dealt with by all the relevant authorities, including Parliament, Government, the prosecuting authorities and the police.

To assist the inquiry team identify the key public policy issues underpinning the inquiry, Lord Leveson has conducted a number of seminars focusing on:

  • the competitive pressures on the press and the impact on journalism;
  • the rights and responsibilities of the press;
  • supporting a free press and high standards – approaches to regulation.

The Leveson panel is to include the impact of social media within the ambit of its inquiry and is due to report back its recommendations on future regulatory approaches within a year.

Parallel to the Leveson inquiry, in September 2011 the Australian Government announced its own independent inquiry into media standards and regulation to be led by former Federal Court Judge Ray Finkelstein. Its terms of reference are to examine:12

a) The effectiveness of the current media codes of practice in Australia, particularly in light of technological change that is leading to the migration of print media to digital and online platforms;

b) The impact of this technological change on the business model that has supported the investment by traditional media organisations in quality journalism and the production of news, and how such activities can be supported, and diversity enhanced, in the changed media environment;

c) Ways of substantially strengthening the independence and effectiveness of the Australian Press Council, including in relation to on-line publications, and with particular reference to the handling of complaints;

d) Any related issues pertaining to the ability of the media to operate according to regulations and codes of practice, and in the public interest.

Although arising in different contexts, the terms of reference for these two reviews share certain common themes, including the impact of technology on the economic model, competitive environment and standards and practices of mainstream media companies.

In Australia, the Finkelstein inquiry is taking place within the context of a much broader government review into the impact of convergence on the entire media and communications landscape. The Convergence Review, led by the Department of Broadband, Communications and the Digital Economy, is considering the implications of the converged media and telecommunications market for a range of policy issues including licensing and regulation, spectrum allocation and management, local content requirements, media diversity, competition and market structure and community standards. The more tightly focused Finkelstein review is expected to provide its findings to the Convergence Review in early 2012.

Besides these two reviews, in September 2011 the Australian Law Reform Commission published its report and recommendations for a radical reform of Australia’s regime for classifying and managing offensive and restricted content.13 Again, these proposed reforms of the traditional media classification system for television programmes, films, videos, and computer games are designed to provide a robust regulatory response to the new multi-platform delivery channels now available.


The New Zealand context

In 2006 the then Labour-led government initiated a far-reaching Review of Regulation for Digital Broadcasting with similar scope to Australia’s Convergence review. The terms of reference for the joint Ministry of Culture and Heritage and Ministry of Economic Development review encompassed a wide range of issues including the implications of digital technology for competition and diversity; distribution channels; intellectual property rights; content acquisition; accessibility to publicly funded and public service content; networks and access to spectrum.14

While this review was discontinued by the incoming government, work building on this review has continued within the relevant Ministries, including on-going discussions and consultations on possible reforms to the regulatory environment for media. The implications of the digital era for censorship and classification are also under active consideration by the Chief Film Censor’s office.

While we have been able to draw on the breadth of research undertaken in New Zealand in this area over the past decade, the terms of reference for our review differ from the earlier reviews and indeed from the reviews underway in the United Kingdom and Australia.

Regulatory gaps in the new media environment

Our primary brief is to identify the regulatory gaps which have emerged as traditional news media have moved their publishing activities online.

We have also been asked to consider whether there is a case for extending media regulation to some of the new participants – for example, current affairs bloggers and news websites which are currently unregulated. A quid pro quo of such an extension would be to see these new publishers gain access to the legal and organisational preferences which are currently reserved for the traditional news media.

Although focused on the regulatory environment, rather than explicitly on press standards, the drivers behind our review are in many respects similar to the overseas inquiries discussed above. Like their counterparts in Australia and the United Kingdom, New Zealand media companies are confronting falling profits, increasing competition from non-traditional publishers, the challenges of convergence and the requirements of continuous news cycles.

In an introduction to its 2008 Annual Report, the New Zealand Press Council acknowledged the threats to the news industry as a result of the twin effects of the internet and the undercutting of the advertising model which had supported news gathering for more than 150 years:15

…As the audience has migrated into the electronic media so newspapers have gone there too but because cash has declined, the demands of serving perpetual website updates, blogging and multi-media reporting have not always been met with correspondingly increasing staffing…

…Journalists are notorious complainers but it is reasonable to question if print reporters being required to produce reports across a wide range of outlets across an ever-increasing time frame is conducive to good in-depth reporting.

Alongside these internal pressures, the traditional news industry is also confronting the external pressures arising from the lack of regulatory parity between news media and unregulated web publishers on the one hand, and broadcasters and print publishers on the other.

The degree of control exerted by the state over the media has varied over time and with respect to different mediums. Traditionally, print media have been governed by a self-regulatory body, the Press Council, which responds to public complaints and adjudicates these against a set of agreed journalistic principles.

Broadcasters, on the other hand, are currently regulated by an Independent Crown Entity, the Broadcasting Standards Authority (BSA), a government appointed complaints body whose mandate is to enforce a series of statutorily backed industry codes designed to maintain standards of decency, fairness, accuracy and privacy in free-to-air and subscription broadcasting services.

However significant gaps and contradictions are emerging in these parallel systems of state and self-regulation for print media and broadcasters as the channels for delivering news converge in the multi-media digital environment.

More significantly, traditional news media find themselves competing for audience share with online publishers, some of whom are positioning themselves squarely in the news and current affairs segment, but who are not currently subject to any regulatory body.

Broadcasting Standards Authority chair Peter Radich has been explicit about the tensions this lack of parity creates for traditional broadcasters, stating in the BSA’s 2010 Annual Report:16

We are acutely aware of the challenges involved in maintaining standards in the segment of traditional broadcasting when similar standards do not apply to Internet broadcasting. It is time for the Broadcasting Act to be reviewed.

Similar sentiments were expressed by newspaper executives and web editors with whom we spoke in the course of our preliminary consultation. They explained how in the porous digital environment they were often competing directly with publishers who, while subject to the law, were not held accountable to the same regulatory and ethical constraints as journalists. They cited instances where bloggers had breached court orders on their websites and readers could find the suppressed information just a “mouse click away” from the news story, effectively placing social media in the same competitive space as conventional news media.17

On the other side of the media divide, some bloggers with whom we consulted expressed frustration at being denied access to news sources, including admission to organisations like the Parliamentary Press Gallery and forums such as press conferences because of their lack of official status and legal recognition as part of the “news media.”

Over and above such pragmatic and competitive concerns looms the much larger public interests question: how to protect and nurture the generation and dissemination of news and current affairs in this disruptive new environment?

Before the advent of the read/write web there was little difficulty in defining what was meant by the term “news media“. Similarly there was a broad acceptance of the special legal privileges and accountabilities attached to the news gathering and publishing activities of media companies. That consensus no longer exists.

A critical question we have been asked to address as part of our review is;

  • whether, and to what extent, the jurisdiction of the Broadcasting Standards Authority and/or the Press Council should be extended to cover currently unregulated “news media” and, if so, what legislative changes would be required to achieve this end.

In order to answer this question we must first unpack the assumptions which underpin it and discuss the following critical policy issues:

  • is it possible, and desirable, to define “news media” in the web 2.0 era?
  • if so, are the traditional justifications for affording the “news media” special privileges, and subjecting them to specific industry regulation, still valid in this new publishing environment?
  • and, finally, if those justifications remain valid, what type of regulatory environment should apply, and to whom?

Remedying harm in the web 2.0 era

The third question we address in this paper concerns the wider issue of what remedies and redress the public should have when they suffer significant harms as a result of publishing on the internet.

Specifically, our terms of reference require us to consider:

  • whether the existing criminal and civil remedies for wrongs such as defamation, harassment, breach of confidence and privacy are effective in the new media environment and if not whether alternative remedies are available.

In addressing this question we are concerned not just with the news media and the laws and regulations governing them, but rather with the broad spectrum of publishers discussed earlier, from the amateur blogger whose words may be read by a handful of others, to the celebrity whose tweets may be read by a million people or more.

These novel forms of publishing are in fact already subject to both the criminal and civil law irrespective of the fact that publication takes place on the internet. The exercise of free speech on the internet is, in theory at least, subject to the same limitations that apply in other mediums.

However, many of the statutes directed at preventing and punishing harms arising from various types of publishing were written before the internet was invented and so are not necessarily capable of capturing speech abuses that arise in the web 2.0 era.

In Part 2 of the Issues Paper we survey the extent of these harms; outline the legal remedies currently available and discuss how the gaps and uncertainties in these laws might be addressed to better deal with the digital environment.

Structure of the Issues Paper

The first part of this paper is focused on the news media and the questions we have been asked to address relating to news media regulation.

We begin, in chapter 2, by providing a descriptive overview of the New Zealand news media landscape on the web. While not claiming to be comprehensive, this chapter aims to provide a sense of the spectrum of publishing occurring on the web, drawing out the distinctions between the different types of publishers and the extent to which their activities might be regarded as “news-like”.

In chapter 3 we survey the statutory privileges and exemptions which currently apply to the news media in New Zealand and briefly discuss the traditional rationales behind granting the media this special legal status. Alongside these statutory privileges and exemptions we also discuss the institutional and organisational conventions which exist to assist the news media in its news gathering activities.

Having described both the web 2.0 publishing environment, and the current legal status of the news media, we then move on in chapter 4 to address the first question posed in our terms of reference: is it possible to define “news media” for the purposes of the law? In addressing this question we first briefly traverse the historical origins of the mass media and then discuss the evolution of the constitutional role of “the press” in a modern democracy. We then unpick some of the fundamental principles inherent in journalism if it is to fulfil these civic functions and in the process identify what it is that distinguishes “news” from other types of speech. We then attempt to apply these distinctions to the spectrum of publishers outlined in chapter 2 and reach some tentative conclusions about the possibility, and desirability of classifying them as “news media.”

Finally we set out the argument for why this special class of speech must be preserved - whoever is exercising it - and why standards and accountability are critical to its survival.

In chapter 5 we describe the current parallel systems of accountability for the news media operating in New Zealand and examine the strengths and weaknesses of both the Press Council and the Broadcasting Standards Authority. Our focus is on convergence, and the need for a regulatory model capable of responding to the challenges and opportunities of the digital web publishing environment.

Chapter 6 turns to developments in news media regulation overseas and sets out the range of regulatory approaches possible – from a system which relies on the law, backed by internal industry standards, and consumer/user feedback at one end of the regulatory spectrum through to state regulation at the other.

We then put forward our preliminary proposal for a new independent converged news media regulator and outline two options for the jurisdiction of this regulator. In option one we discuss the merits of compelling some classes of publishers to come under its jurisdiction, and in option two we discuss a purely voluntary option.

In the final two chapters of the paper we address the third leg of our terms of reference: whether the legal remedies available for those who suffer serious harms as a result of speech abuses are fit for purpose in the web 2.0 era.

Chapter 7 outlines the scope of these harms and provides an overview of the legal and non-legal remedies currently available. This chapter includes a discussion of the self-regulatory systems and reporting tools available on sites such as Facebook to manage speech harms.

Chapter 8 examines the adequacy of these laws in dealing with speech abuses in the web era and makes preliminary proposals for how the law might be amended or in some cases new offences created to deal with the new publishing environment.

Finally in chapter 8 we put forward for discussion the possibility of establishing a new tribunal to provide those who have been harmed by serious speech abuses with swift and easily accessible remedies. We also put forward some preliminary ideas for how the law might deal with offensive speech in the new digital environment.

Special Report: The news industry “The end of mass media: Coming full circle” The Economist (United Kingdom, 7 July 2011).

For the full terms of reference and supporting information see < >.

Australian Government Independent Media Inquiry, Department of Broadband, Communications and the Digital Economy, <
consultation >.

Australian Law Reform Commission National Classification Scheme Review (ALRC DP77, 2011)< >.

Terms of reference for the review and related research and reports can be accessed from< >.

New Zealand Press Council “Annual Report 2008” at 11-12. < >.

Broadcasting Standards Authority “BSA Annunal Report 2010” (2010) at 4 < >.

For example Cameron Slater, author of a blog titled Whale Oil Beef Hooked has campaigned against the use of suppression orders and in September 2010 was convicted on charges related to breaches of non-publication orders by publication on his blog. R v Slater [2011] DCR 6. His activities and the site received widespread coverage in the mainstream media. Mr Slater appealed to the High Court against the convictions and sentences imposed. The appeals were dismissed on 10 May 2011, but Mr Slater was subsequently granted leave to appeal to the Court of Appeal in relation to one question of law, as to whether the information or material posted on the Whale Oil blog constituted a “report” or “account” of proceedings in breach of the provisions of the Criminal Justice Act 1985. At the time of writing, the Court of Appeal has not yet issued a judgment in this matter.