Grupo Clarín Battles Argentina Government Over Media Law
A legal showdown between major media conglomerates and the Argentinian government is quickly brewing after the Argentinian government stated that it planed to seize and auction-off certain broadcast licenses as well as cable TV and fiber-optic Internet networks owned by media companies. The sell-off is being carried out pursuant to a recent media law. The stakes are high as a Supreme Court battle is about to unfold wherein free speech, antitrust, and private-property rights issues will be raised.
The media law in question is a 2009 federal law which disallows cable TV companies from holding more than 24 broadcast licenses nationwide. Grupo Clarín SA, a major media company who owns Cablevisión, who is openly defying the law, has between to 237 and 158 licenses nationwide. Other conglomerates, like Uno Medios, also surpass the 24-license cap imposed by the 2009 law.
While all media companies have been granted an injunction staying the sell-off, this injunction is set to expire on December 7th 2012. After this deadline, the federal agency created to enforce the law is set to begin sell-offs of both media licenses and infrastructure – a move that is seen by some as an expansion of the law which had been thus-far interpreted to cover only licenses.
Opponents of the law, like Clarín and Uno Medios, have called the law unconstitutional on grounds that it violations private-property rights and free speech. As a response, last week, Argentina’s Congress passed a law that allows the government to present its case directly the Argentinian Supreme Court, bypassing the typical channels through federal trial and appeals courts. Some have criticized this move and question whether direct Supreme Court appeal will only worsen an already dysfunctional federal appeals system. Last week’s law came on the same day that Mr. Martin Sabbatella, a government agent, approved the sell-off plan.
Grupo Clarín, one of the only media companies that doesn’t depend on government advertising or public funds, believes it is unfairly targeted by the 2009 law. The government, spearheaded by President Kirchner, has countered by saying that Clarín’s defiance is an attempt to undermine the anti-monopoly law and the December 7 deadline, which apply to all media companies equally. The law is intended to give broadcast licenses to local communities and requires theatres to show more local films.
Grupo Clarín is a media conglomerate which own newspapers, magazines and television and radio stations and provides cable TV. It is slated to petition the Supreme Court to rule on the constitutionality of the 2009 law. There is a strong likelihood, however, that the Supreme Court, dominated by the President Kirchner’s nominee’s, will refuse the case and could simply send it down to a lower court judge.
NOTE: Photo from Wall Street Journal.