Contents

Chapter 1
Introduction

The purpose of our review

1.1By June 2012 more than 2.5 million New Zealanders, over half the population, were mobile broadband users.25 To the generation who have grown up with the internet these statistics will seem as unremarkable as those recording the number of households with a telephone connection or a television. Revolutionary as these technologies were, they cannot compare with the paradigm shift which has occurred as a result of digitisation and the internet.

1.2Using hand-held internet-connected devices such as smart phones and tablets, citizens can simultaneously surf the internet, conduct face-to-face conversations with friends or colleagues across the world, trade shares, access a plethora of news and entertainment, and create and distribute their own multi-media content to a potentially global audience using platforms such as YouTube and Twitter.

1.3In essence, the web has placed the tools of publishing in the hands of every individual with access to it. The internet and mass participatory media have given new meaning to individual freedom of expression, providing unprecedented ways in which New Zealanders can exercise their right to “seek, receive, and impart information and opinions of any kind, in any form.”26

1.4These new communication technologies are also having profound impacts on the mainstream news media. Old format-based distinctions between print and broadcasting are dissolving as news media companies create and distribute content in a variety of formats and channels for access via an array of devices. And increasingly, mainstream media are harnessing the power of social media and user-generated content to source, promote and distribute their own content.

1.5Evidence of this rapid convergence between mainstream and new media can be found in every news bulletin and on every news website in New Zealand. Stories broken by bloggers percolate up into the mainstream news agenda;27 information and commentary sourced from social media such as Twitter or Facebook feature with increasing prominence in mainstream news; and audiences are provided with more and more opportunity to shape the news agenda by providing content and commentary.28

1.6This review is about the laws and standards which apply to different types of communication in this converged media environment.

1.7All those who publish in New Zealand, whether as individuals or as entities such as news media companies, are subject to the basic legal constraints designed to protect citizens’ interests in their reputation, privacy, personal safety and right to a fair trial. Within these minimal constraints, citizens are free to exercise their freedom of expression, including publishing views which are extreme, false, misleading and/or offensive to some.

1.8The news media, however, have additional rights and responsibilities, arising from the public trust implicit in the functions they perform as a primary source of reliable information about what is happening in the world and as a means of holding power to account. In turn, they are subject to higher standards, some imposed by law, others by self-imposed professional and ethical codes, designed to ensure that their privileges and exemptions are exercised responsibly, that the information they disseminate conforms to basic standards of accuracy and fairness, and that they are held accountable for any abuse of their power.29 These requirements are unique to the news media – other citizens exercising their right to freedom of expression are bound only by the law of the land.

1.9The terms of reference for our review span two separate but overlapping sets of issues: the first of these relate to the news media and require us to consider who should be subject to the regime of special privileges and countervailing responsibilities which have traditionally applied to the news media now that anyone can break news and disseminate information to a potentially mass audience.

1.10 Specifically, our terms of reference required us to address two questions relating to the news media. First:

How to define “news media” for the purposes of the law?
And secondly to consider and to recommend:
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?

1.11 The other issue we were required to address concerns the rights and responsibilities of ordinary citizens who are not part of the “news media” – no matter how broadly that term might be defined. While not subject to the type of standards and accountabilities associated with the news media, all digital communicators will however remain subject to the law. The terms of reference required us to consider whether these universal laws are in fact fit for purpose in the digital age. Specifically:

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 may be available?
1.12In December 2011 we published a two-part Issues Paper, The News Media Meets ‘New Media’: Rights, Responsibilities and Regulation in the Digital Age, setting out our preliminary response to these questions and putting forward for public debate a number of preliminary proposals for reform.30

1.13These proposals included changes to existing legislation relating to speech offences and the establishment of two new bodies for adjudicating complaints – one for the news media and another to deal with harmful communications involving private citizens.

1.14The proposals were widely debated in both traditional and new media forums during a four-month consultation period between December 2011 and March 2012. We received 72 formal submissions and a large number of comments and contributions from those participating in online discussions and forums.31
1.15In the course of this consultation Coroners, Police and the Post Primary Teachers’ Association, expressed particular concern about the ways in which the abuse of communication technologies was contributing to truancy, school failure and a range of adolescent problems including depression, self-harm and suicide.32

1.16In May 2012, in response to this public concern, the Minister responsible for the Law Commission, the Hon Judith Collins, asked us to fast track our final recommendations with respect to the third leg of our original terms of reference – the adequacy of the current legal framework for dealing with harmful communications in the digital era.

1.17This work took the form of a Ministerial Briefing Paper, titled Harmful Digital Communications: The Adequacy of the Current Sanctions and Remedies, which was delivered to the Minister in August 2012. The Briefing Paper and accompanying draft bill have been included as Appendix A to this final report.

1.18Our Ministerial Briefing Paper focused on what we described as "harmful digital communication". It proposed a package of legal and enforcement reforms designed to provide a graduated response to the types of harms which can result from the misuse of new communication technologies. These included amendments to existing statutes to ensure they can be applied in the digital environment, a new electronic communications offence and the establishment of a specialist Communications Tribunal able to provide citizens who have suffered significant harms with speedy and effective remedies such as take-down orders.

1.19In this report we return to the other focus of our review: the legal and organisational rights and responsibilities which have traditionally applied to the news media in New Zealand.

1.20From a public policy perspective we were required to consider whether, and in what circumstances it may be in the public interest to:

1.21These questions arise because of the paradigm shift which has occurred as a result of the internet and the digitisation of information. In this revolutionary new media environment where anyone is able to publish to the world, the mainstream media have lost their monopoly on the generation and mass dissemination of news.

1.22This has given rise to fundamental questions about the ongoing viability and legitimacy of the news media as a special class of publisher with access to legal rights, and subject to countervailing responsibilities, which do not apply to ordinary citizens. It has forced us to adopt a first principles approach to the policy questions underpinning our terms of reference.

International context

1.23Our own review has been conducted in parallel with two major inquiries into news media standards and accountability in Britain and Australia. In Britain, the phone hacking scandal which enveloped Rupert Murdoch’s publishing conglomerate, News International, gave rise to a two-part independent inquiry into the “culture, practices and ethics of the press” led by Lord Justice Leveson.

Leveson Report

1.24Unlike our own review, the Leveson Inquiry did not directly confront the issue of convergence and what it means for regulatory models in the digital era. Instead its focus was firmly on the British newspaper industry.

1.25 Lord Justice Leveson released his 2,000 page Report of an Inquiry into the Culture, Practices and Ethics of the Press (the Leveson Report) in November 2012.33 It represents the most exhaustive review of press standards ever undertaken in Britain.
1.26The nine months of oral hearings, in which 637 witnesses gave evidence, either in person or in writing, took place against the backdrop of an ongoing police inquiry into alleged illegalities involving members of the British press.34
1.27 Lord Justice Leveson concluded that while the entire British press served the country “very well for the vast majority of the time”, there was compelling evidence of serious ethical failings extending well beyond the newspapers specifically targeted in the hacking scandal.35 Too often, in Lord Justice Leveson’s view, the press had failed to meet its responsibilities to “respect the truth, to obey the law and to uphold the rights and liberties of individuals”:36

The evidence placed before the Inquiry has demonstrated, beyond any doubt, that there have been far too many occasions over the last decade and more (itself said to have been better than previous decades) when these responsibilities, on which the public so heavily rely, have simply been ignored. There have been too many times when, chasing the story, parts of the press have acted as if its own code, which it wrote, simply did not exist. This has caused real hardship and, on occasion, wreaked havoc with the lives of innocent people whose rights and liberties have been disdained. This is not just the famous but ordinary members of the public, caught up in events (many of them, truly tragic) far larger than they could cope with but made much, much worse by press behaviour that, at times, can only be described as outrageous.

1.28And while these criticisms did not extend to all sections of the press, Lord Justice Leveson argued that it was unconscionable that innocent victims of the news media be left without effective redress because of the benefits to the wider society from a free press:37

There is no organised profession, trade or industry in which the serious failings of the few are overlooked because of the good done by the many. Indeed, the press would be the very first to expose such practices, to challenge and campaign in support of those whose legitimate rights and interests are being ignored and who are left with no real recourse.

1.29Lord Justice Leveson concluded that the body responsible for enforcing press standards and providing remedies for those impacted by ethical breaches, the Press Complaints Commission, had failed. It lacked genuine independence, was hamstrung by “numerous structural deficiencies”, was largely controlled by the industry, and was inadequately resourced.38

1.30In recommending how these deficiencies might be addressed, Lord Justice Leveson confronted the same fundamental challenge all policy and law-makers face when considering how to attain effective public accountability without curbing the freedom of the news media.

1.31Lord Justice Leveson’s solution relies on establishing a set of benefits for those choosing to sign up to the new regulator, and potentially costly penalties for those who opt to remain outside the body, but who later find themselves defending a court action.

1.32We discuss Lord Justice Leveson’s proposals in greater detail in chapter 5. While it will be apparent that there are many similarities between his broad approach and our own, there are also important differences. In part these reflect the very different contexts within which these policy responses have arisen.

Finkelstein Report

1.33 In contrast, Australia’s Independent Inquiry into the Media and Media Regulation, led by former Federal Court Judge Raymond Finkelstein, was explicitly required to examine the ways in which technology was impacting on both the news business model and the quality of journalism, and the effectiveness of accountability mechanisms.39

1.34Although there was no evidence of illegality or systemic abuse of media power on the scale alleged in Britain, the Finkelstein Inquiry was driven by a combination of political concern about perceived media bias, the intense concentration of media ownership in Australia, and declining public trust in traditional news media.

1.35The 467 page report, published in February 2012, included detailed analysis of the structure and profitability of Australia’s newspaper sector, the impact of the internet and convergence on competition, and the efficacy of the existing regulators for press and broadcast media. In assessing the news media’s performance and compliance with its own codes of ethics, the inquiry drew on a detailed meta-analysis of 21 surveys, spanning four decades, which examined public perceptions of media trust, performance, bias, power and ethics.

1.36The report highlighted a wide range of issues including the erosion of public trust in the news media and persistent recurrence of standards failures. These included privacy violations, injury to reputation, partisanship in politics, bias and commercially-driven opposition to government policy.40
1.37Finkelstein concluded that the current regulatory mechanisms were “not sufficient to achieve the degree of accountability desirable in a democracy”.41
1.38This conclusion was based on his assessment of the gaps and inconsistencies in the system, including the lack of regulatory oversight of online news publications, the cumbersome and slow complaints processes for broadcast media and what he described as serious structural constraints within the Australian Press Council, which did not have “the necessary powers or the required funds to carry out its designated functions.”42 Finkelstein noted that news media’s ability to walk away from the Press Council if dissatisfied with its decisions constituted a major flaw in the self-regulatory model, weakening its authority and undermining its resourcing.

1.39He recommended the current print and broadcast regulators be replaced by a single converged regulator, responsible for enforcing standards across all news media, regardless of format.

Convergence reviews

1.40Alongside these two high-profile inquiries there have also been two major Australian reviews focused on the implications of media and technological convergence for regulatory frameworks.

1.41 The first of these was the Australian Law Reform Commission’s (ALRC) first principles review of Australia’s censorship and classification system which reported in February 2012;43 the second was a multi-faceted review 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 Convergence Review: Final Report (the Convergence Review)44 was published in March 2012 and drew in the findings and recommendations of both the Finkelstein Report and the ALRC’s report on Classification Content Regulation and Convergent Media (the Classification Review).

1.42Although the focus and scope of these three Australian reviews differ, they each grapple with the disruptive impacts of digital technology and convergence on the regulatory environment. In the pre-digital era identifying the target of media regulation and determining the boundaries of intervention were relatively straightforward matters. However, determining what to regulate and how to calibrate, target, and enforce that regulation has now become far more complex as bright line distinctions between media formats and genres, creators, consumers and distributors become increasingly blurred.

1.43This has forced reviewers and policy makers to re-examine the fundamental justification for regulatory intervention, whether it be the traditional classification and censorship schemes applied to entertainment, or the imposition of statutory requirements for balance and fairness for news media broadcasters.

1.44The cross-fertilisation of ideas that has been possible as a result of these numerous parallel reviews has been invaluable. Throughout this report we consider their findings in greater depth and draw on a number of them in shaping our own recommendations. In turn, the Finkelstein Inquiry has drawn on aspects of our work.45

1.45However, it is important to emphasise that our proposals are a response to the specific problems we were asked to address and reflect our own unique context

25Statistics New Zealand Internet Service Provider Survey (12 October 2012).
26New Zealand Bill of Rights Act 1990, s 14.
27A recent example of an agenda-setting story being first broken by a blogger occurred in October 2012 when news of a security flaw in the Ministry of Social Development’s computer system was first revealed on the current affairs website PublicAddress by blogger Keith Ng. Stories broken by prominent blogger Cameron Slater on his website Whale Oil Beef Hooked are also frequently picked up by mainstream media.
28See for example <www.stuff.co.nz/stuff-nation> an interactive sub-brand of Fairfax Media’s Stuff news website launched in September 2012. The initiative allows users to submit their own material for publication on the general news website under the masthead Stuff Nation. Readers are encouraged to undertake reporting assignments, discuss stories and collaborate with Fairfax journalists.
29Currently all New Zealand broadcasters are subject to the provisions of the Broadcasting Act 1989, which includes requirements to maintain programme and presentation standards consistent with the observance of good taste and decency; the maintenance of law and order; the privacy of the individual; and balance in the treatment of controversial issues of public importance. Print media are not subject to statutory standards but to their own ethical and professional codes backed by an industry led complaints body, the Press Council.
30Law Commission The News Media Meets ‘New Media’: Rights, Responsibilities and Regulation in the Digital Age (NZLC IP27, 2011) [Issues Paper].
31The submissions to this review are available on the Law Commission’s website at <www.lawcom.govt.nz/project/review-regulatory-gaps-and-new-media>.
32Simon Collins and Vaimoana Tapaleao “Suicide link in cyber-bullying” The New Zealand Herald (online ed, New Zealand, 7 May 2012); Submission of New Zealand Police (March 2012); Submission of New Zealand Post Primary Teachers’ Association (March 2012).
33The Rt Hon Lord Justice Leveson Report of An Inquiry into the Culture, Practice and Ethics of the Press (The Stationery Office, London, 2012) [the Leveson Report].
34See Leveson Report, Executive Summary at fn 2, noting that by October 2012 there had been over 90 arrests in connection with the various police inquiries into alleged illegal practices by sections of the press, police and public officials. These included 17 arrests in connection with Operation Weeting (interception of mobile phone messages); 52 arrests in connection with Operation Elveden (payments to public officials); and 17 arrests in conjunction with Operation Tuleta (dealing with other complaints of data intrusion such as computer hacking and access to personal records).
35Leveson Report, Executive Summary at [8].
36At [6] – [7].
37At [10].
38At [42].
39The Hon R Finkelstein QC Report of the Independent Inquiry into the Media and Media Regulation (Report to the Minister for Broadband, Communications and the Digital Economy, Canberra, 2012) at [1.2] [Finkelstein Report] describes the inquiry’s terms of reference as requiring investigation of:
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 online 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.
40At 103 – 124.
41At 8.
42At 8.
43Australian Law Reform Commission Classification – Content Regulation and Convergent Media (ALRC R118, 2012) [Classification Review].
44Australian Government Convergence Review (Final Report to the Minister for Broadband, Communications and the Digital Economy, Sydney, 2012) [Convergence Review].
45For example, see Finkelstein Report, above n 39, at [8.47].