Research and analysis

The Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025: impact assessments - RPC opinion (green-rated)

Regulatory Policy Committee opinion of DCMS’s impact assessments (IA) in respect of the regulations

• From: Regulatory Policy Committee
• Published: 22 May 2025

Documents

RPC Opinion: The Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025

PDF, 158 KB, 10 pages

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Details

The Foreign State Intervention (FSI) regime is intended to prevent foreign states from buying shares in newspaper companies and restricting a plurality of views. The regime came into force on 13 March 2024, which banned foreign states from acquiring a share in UK newspapers and news magazines with a turnover in excess of £2 million. This amendment intends to create an exception for investments made by state-owned investors (SOI), in order to not prevent wider foreign investment in the UK’s media industry, below a 15% ownership threshold. SOIs include sovereign wealth funds, public pensions or social security schemes, that make long-term investments on behalf of that state, directly or indirectly. In order to apply the exception, the Secretary of State must deem the investment to not give that investor the ability to materially influence the policy or strategy of a UK newspaper or news magazine. The amendment supports investment in the media industry while ensuring there is a framework that protects freedom of speech.

The direct costs to businesses associated with the legislation are predominately attributed to familiarisation and compliance. The IA provides a proportionate and careful assessment of these costs, and adheres to RPC guidance. However, the IA could have been improved by discussing some of the potential alternative options to the regime, a further discussion of historical precedent and analysis of international comparisons.

The RPC opinion on the IA for this piece of legislation refers to an earlier version where the ownership threshold was 5%. The underlying analysis of impacts was not affected as the low-central-high scenarios of potential media mergers over the appraisal period are based on historical acquisitions, so the IAs’ assumptions remain consistent despite the change.

Published 22 May 2025