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«COMMERCIAL RADIO INQUIRY Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Pty Limited February 2000 Sydney ISBN 0 642 ...»

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representatives of sponsors of Messrs Jones and Laws. For instance, 2UE submitted that:

many of the statements of opinion emanate from the interviewee. The interest of the interviewee is made clear from his position. Listeners know by whom they are being persuaded.28 While the interviewee’s position may be declared, neither Messrs Jones nor Laws’ interests are disclosed. The fact of the commercial agreement may affect the nature of the questions asked of the interviewee, and affect listeners’ perceptions of the questions asked and of the entire interview. Listeners’ views as to whether an interview is ‘hard’ or ‘soft’ may be affected by the disclosure of a commercial agreement between the interviewer and interviewee.


In relation to programs for which 2UE received payment, 2UE submitted that this matter was advertising, and as such, Code 2 does not apply. The Panel does not accept this submission.

Clause 3.1(b) of the Codes provides that advertisements broadcast by a licensee ‘must comply with all other Codes of Practice so far as they are applicable’.

Where program matter characterised as an advertisement also has the characteristics of a current affairs program, the program may be examined under both Codes.

In relation to some of the broadcasts, 2UE and Messrs Laws and Jones submitted that there was no evidence that the sponsor caused the material to be broadcast. The intervention of 2UE, or the presenter’s producer before material went to air were cited as relevant breaks in the causal chain. While the intervention in each case must be considered, the Panel is of the view that, if material going to air relates to a sponsor or the business of a sponsor, and there Submission, Mr Jones, para. 172.

Colonial State Bank Submission, paras 24.2, 24.4; 2UE Submission, paras 6, 41; Submission, Mr Laws, passim; Submission Mr Jones, paras 59, 140.

2UE Supplementary Submission: Alan Jones Broadcasts – Breach of Clause 2.2(d) of Code of Practice;

2UE Supplementary Submission: John Laws Broadcasts – Breach of Clause 2.2(d) of Code of Practice exists a relevant commercial agreement between the presenter or their producer and the sponsor for valuable consideration, and the existence of that agreement is not disclosed as part of the broadcast of that material, then that material is presented in a misleading manner.




The Panel received submissions about the meaning that should be attributed to the phrase ‘material must not be presented in a misleading manner’ which cited arguments based on the interpretation of similar phrases in the TPA. The TPA deals with, among other things,

misleading or deceptive conduct. Section 52 of the TPA states, in part:

(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Clause 2.2(d) is intended to ensure that material prepared for and presented on a current affairs program does not misrepresent viewpoints or mislead.

For present purposes, the Panel is concerned with the presentation of material ‘in a misleading manner’. This part of the clause specifies three ways in which the presentation of material would be considered to

be misleading. Those three ways are:

♦ by giving of wrong or improper emphasis;

♦ by editing out of context; or ♦ by withholding relevant available facts.

If the material broadcast fits one of the above categories then it would be considered, by reason of that fact, to be presented in a misleading manner. Thus, material presented on any program on any radio station would be misleading if it were shown that a relevant available fact was withheld.

It should be noted that, for the Authority to determine a breach of clause 2.2(d), it is not necessary to ascertain whether the material has actually misled the audience. The Authority need only make a finding that the material has been presented in a misleading manner to determine that a breach of the Codes has occurred.

In his submission to the hearing, Mr Jones took the Panel to case law relating to provisions of the TPA dealing with misleading or deceptive conduct.29 In particular, the Panel was taken to Winterton Constructions Pty Limited v Hambros Australia Limited,30 where Hill J


Obviously, it is difficult to see how a mere silence could, of itself, constitute conduct which is misleading or deceptive or likely to mislead or deceive. However, if the circumstances are such that a person is entitled to believe that a relevant matter affecting him or her adversely would, if it existed, be communicated, then the failure to so communicate it may constitute conduct which is misleading or deceptive because the person who ultimately may act to his or her detriment is entitled to infer from the silence that no danger of detriment existed. Thus, where a duty to speak is imposed, silence may constitute misleading and deceptive conduct.31

–  –  –

While the Panel notes the assistance of Hill J’s judgment in Winterton, the Panel also notes the judgment of Bowen CJ in Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty

Limited,32 where his Honour said:

Where silence is relied on in order to show a breach of s.52 it will depend on the circumstances whether the silence constitutes conduct which is misleading or deceptive. As in the case of other sections of the TPA the court may gain assistance from consideration of cases at common law and in equity dealing with related types of situations. However, the court is not confined by such cases because it is concerned with the interpretation and application of the words of the particular statute.

The provisions of clause 2.2(d) differ from section 52 of the TPA. Notably, section 52 of the TPA does not provide guidance as to the circumstances in which conduct may be said to mislead or deceive (or be likely to mislead or deceive). On the other hand, clause 2.2(d) of the Codes lists the ‘circumstances’ referred to by Hill J in which material might be said to be misleading. The Panel finds that the comparison with the TPA, while informative, is not conclusive.


Talkback hosts have strong opinions on many subjects and often forcefully express these opinions on-air. Listeners can be expected to realise this. The Panel believes, however, that listeners cannot be expected to know that a particular talkback host has a direct commercial interest in a subject being commented on or discussed. Further, the Panel believes listeners are entitled to be told of the existence of such a direct commercial interest and, if they are not so told, to assume that no direct commercial interest exists. In other words, they are entitled to assume presenters are disinterested. The revised edition of the Macquarie Dictionary defines ‘disinterested’ as ‘unbiased by personal involvement or advantage’.

There is a difference between the commercial agreements between a sponsor and a radio station, and the commercial agreements between sponsors and individual presenters.

Disclosure during a program of a commercial agreement between a sponsor and radio station does not carry with it any indication that there may also exist a commercial agreement between a sponsor and the presenter of that program. The Panel is of the opinion that such a disclosure may in fact suggest the reverse. As Counsel Assisting the Authority said in his closing submission: ‘If anything, that disclosure would deflect attention from the possibility of other, undisclosed, financial arrangements’.33 In a memo of 27 July 1998 to all on-air broadcasters, the Chairman of 2UE, Mr Conde wrote:34.

a concern does arise in relation to any arrangement which could give rise to a suggestion that an announcer is obliged to a third party to broadcast promotional material over and above advertisements booked and paid for through the usual and appropriate channels.

… I cannot stress highly enough the potential damage to the integrity and reputation of 2UE should it be perceived that the content of 2UE broadcasts may be dictated by the marketing imperatives of third parties.

(1986) 12 FCR 477 at 489-90.

Submission, Counsel Assisting the Authority, para. 3.


The Communications Law Centre has suggested one of the public policy concerns raised following the allegations of the ‘Media Watch’ program on 12 July 1999 was that ‘the credibility of all views expressed on talkback radio by other announcers suddenly seemed questionable’.35 Throughout the hearing, both Mr Laws and Jones portrayed themselves as broadcasters of integrity and independent thought whose opinions could not be bought, and who would never express an opinion that was not genuinely held. In the opinion of the Panel this increases rather than decreases the listeners’ entitlement to an assumption of disinterestedness. A listener accepting such a self-portrayal would be entitled to assume that these broadcasters would have no undisclosed commercial agreements with parties that are being commented on or discussed. Disclosure of agreements of this nature, therefore, becomes more (rather than less) important.36 The Panel believes it only natural for a person to be well disposed towards an organisation or person, or to be influenced towards a certain mode of behaviour or way of thinking, (however subtle or sub-conscious that influence may be) when they are receiving financial reward or other valuable consideration from that person. Nevertheless, the Panel is of the opinion that the question as to whether on-air behaviour has been influenced in any way by the existence of commercial arrangements with third parties is irrelevant in any consideration of whether it is reasonable for listeners to assume presenters do not have commercial interests in the matters they discuss on air.

In its closing submission the Communications Law Centre stated its position regarding this


We think it is important to recognise and acknowledge at the outset the nature of commercial radio. It is funded by people who are trying to sell things. Its audiences know it is funded by people who are trying to sell things. Commercial radio is very popular with those audiences and it deserves credit. Its survival depends on its ability to attract advertisers and sponsors through the presentation of programs which rate well in the advertiser’s target demographic.

But radio listeners deserve to be looked after as well. What we want to suggest is a simple proposition, that radio listeners are entitled to know by whom they are being persuaded. That proposition, borrowed from the Applicability of Sponsorship Identification Rules in the United States, is really what underpins everything we want to say about this matter. Radio listeners are entitled to know by whom they are being persuaded. They should not have to fight for that.

They should not have to pay for it. They should not have to tune into Media Watch on Monday night to uncover it. They have a right to know by whom they are being persuaded.

While those borders are blurry, we think it is critical that we try and draw some clear lines between them so that listeners are not misled about the nature of the content they are receiving.

Counsel Assisting stated in his opening address that ‘As a matter of ordinary human observation, one would have to say that a person who is known to be paid by a sponsor is likely to be listened to with a little more scepticism than a person who is thought to be making the observations entirely gratuitously.’ That proposition seems to apply to both on-air and offair promotional agreements and we would endorse it. The ABA should be concerned that listeners are not being misled. Listeners are going to be misled if the announcer or the station has a relevant interest in the subject matter of the program and listeners are unaware of that relevant interest.

Submission, Communications Law Centre, p. 3.

See also Submission, Counsel Assisting the Authority, para. 6.

The announcer’s viewpoint is misrepresented because the audience has not been made aware of the commercial arrangements regardless of whether the announcers were in fact influenced by them.

The Panel agrees with this analysis. The ordinary reasonable listener should be able to assume, in the absence of appropriate disclosure, that the presenter of a current affairs program is disinterested.

In relation to the allegation of breaches of clause 2.2(d), 2UE made the following general

submissions in relation to each broadcast:

The alleged assumption of disinterestedness, including the factors which may affect its scope and degree, have not been established by any evidence.

The alleged assumption of disinterestedness, if it exists, is not a relevant available fact for the purposes of Code of Practice 2. Code of Practice 2 is concerned with the content of broadcast material and not with the affiliations of an announcer.

The broadcast was not put to the announcer, other witnesses, actual/ potential listeners or experts so as to identify the alleged assumption of disinterestedness and the factors which may affect its scope and degree.

No evidence has been adduced as to the context in which the broadcast was made. The material immediately preceding and succeeding the broadcast has not been put before the panel. It is impossible to safely conclude that the broadcast may have misled listeners without considering contextual detail.37 The Panel notes the submission of 2UE in relation to the assumption of disinterestedness and Code 2. 2UE states Code 2 is concerned with the content of material broadcast and not with ‘the affiliations of an announcer’. While it is correct that Code 2 is concerned with the content of a broadcast, the Code is also concerned with the withholding of relevant available facts, as these might affect the accuracy and fairness of a particular broadcast.

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