* Regulator proposes anti-monopoly rules that could block
Next Media sale
* Public worries mount that media deals by China-linked
tycoons could promote Beijing agenda
* Regulator blocks cable TV deal by Tsai, Taiwan tycoon with
mainland business empire
By Clare Jim and Yimou Lee
TAIPEI/HONG KONG, March 11 Taiwan regulators,
under pressure from a public worried that Beijing may meddle in
their media, have begun talking tough on TV and newspaper deals
by Taiwanese businessmen with strong ties to the mainland.
The island's media watchdog has proposed new anti-monopoly
rules that could scuttle the $601 million sale of Next Media
Ltd's Taiwan operations to a Taiwanese group including
Want Want Holdings owner Tsai Eng-meng, who runs a
multibillion dollar snacks-to-property empire in China.
Academics and media professionals, as well as the political
opposition, fear Tsai and others who make their fortunes on the
mainland will push a pro-Beijing bias on Taiwan's free-wheeling
media. Tsai, who already owns a top-four Taiwan daily, has
denied any pro-China agenda but has attracted controversy as a
vocal proponent of Taiwan unification with the mainland.
In January, the island's independent media regulator opposed
an anti-monopoly amendment drafted by the opposition that would
have blocked the New Media sale, saying it was too strict.
Parliament rejected the measure and called on the regulator to
draft a new bill.
That sparked a public backlash, and now the National
Communication Commission seems to be changing its tune, showing
more sensitivity about China's perceived influence in the media.
"Whether or not a group is leaning too much towards China
would affect the extent of the health of the market," an NCC
official, who declined to be named due to the sensitive nature
of the issue, told Reuters. "We don't want to see the market
overly dominated by a certain group."
Taiwan's Free Trade Commission, which will also have to sign
off on the print portion of the Next Media deal, said it was
well aware of public concerns and would make the review process
as transparent as possible.
Perceptions of mainland influence in the media have stirred
political controversy on an island that mistrusts China yet
depends heavily on it for trade and investment opportunities.
China claims sovereignty over Taiwan - although many on the
democratic and self-ruling island of 23 million want assurances
on future independence - making the media battle for Taiwanese
hearts and minds especially vital to Beijing. Chinese entities
are prohibited from investing directly in Taiwanese media.
Around 100,000 people took to the streets of Taipei in
January to protest against President Ma Ying-jeou's
China-friendly government, in large part disgruntled with the
state of the economy, but many carried signs and chanted slogans
decrying the proposed Next Media deal.
In an interview with the Washington Post in January of last
year, Tsai denied that he was trying to please Beijing to
further his China business interests, but said that closer
integration with China would be beneficial to all. "Whether you
like it or not, unification is going to happen sooner or later,"
he was quoted as saying.
The sale would add Next Media's print business - including
the top-circulation Apple Daily - to Tsai's two Taiwan TV news
stations and three newspapers.
Five years ago, Tsai paid nearly $700 million for the China
Times Group, which includes the China Times, another of Taiwan's
four big national dailies, as well as TV channels and other
publications. Two years later, he agreed to pay $2.4 billion for
cable TV operator China Network Systems, which would give him an
additional 28 percent share of Taiwan's cable subscribers.
Taiwan's media sector, which burgeoned after martial law was
lifted a quarter century ago and boasts seven major all-news TV
channels, has seen several big M&A deals in recent years
involving private equity as well as Tsai and other tycoons with
But the regulators showed their willingness to stand firm
against Tsai last month when the NCC officially blocked the
cable deal, ruling that he failed to meet onerous requirements -
imposed when the deal got conditional approval last July - that
would sharply reduce his involvement in news broadcasting.
The NCC official told Reuters that concerns over Chinese
influence in the media were a factor in the decision.
Critics worried about Tsai's rising media influence and his
China ties had protested against last year's approval, fearing
regulators would give the deal a pass despite the conditions.
The most recent anti-monopoly proposal, announced late last
month and considered likely to pass given the regulators'
blessing, could also thwart Tsai's media ambitions as it
prohibits a print media tie-up with any TV news business
commanding an audience share of more than 15 percent.
Several academics and media professionals said the impact
would depend, however, on how audience share is calculated.
Association of Taiwan Journalists President Chen Hsiao-yi,
who has criticised monopolisation in the media and found the
regulators' proposal lacking, said the total audience share for
all news channels in Taiwan would be less than 5 percent.
"It is in fact a law that protects media monopoly," Chen
said in a statement after the proposal was announced.
Tsai declined to speak to Reuters when contacted after the
Other mainland-connected participants in the bid for Next
Media's assets include Chinatrust Financial Holdings Co
, a bank with plans to branch out in the mainland, and
Formosa Plastics Corp, which owns petrochemical
factories across China.
Chinatrust did not return phone calls seeking comment.
Formosa Plastics Group spokesman Frank Fu played down the
possibility that the company might be susceptible to influence
from Beijing, saying it has no financial backing from China.
Fuelling the protests and the pressure on regulators are
charges that Tsai's existing newspapers have unduly favoured
Chang Chin Hwa, a media professor at National Taiwan
University, said her research showed that China Times' coverage
of the June 4, 1989, Tiananmen Square killings has greatly
diminished since 2009, after Tsai took over the publication.
"They stopped reporting on overseas protests and memorials
to the June 4th incident, and they used to give widespread
coverage on that," Chang said.
China Times Editor-in-Chief George Wang declined to comment
on claims that the newspaper's editorial policy favours China.
Tsai has rejected accusations of a pro-China bias, writing
in an open letter in the China Times last November that rivals
had distorted his intentions in running that paper.
(Additional reporting by Faith Hung in Taipei, James Pomfret in
Hong Kong; Editing by Edmund Klamann)