The Australian Communications and Media Authority today filed an application in the Federal Court of Australia seeking a civil penalty order against Radio 2UE Sydney Pty Ltd for breaching a condition of its licence.

The 2UE breaches relate to 13 failures by the licensee of 2UE to ensure that on-air announcements disclosing a commercial relationship were made during broadcasts of the John Laws Morning Show.

ACMA has reached agreement with Fairfax Media Limited (the current owner of 2UE) that 2UE will consent to civil penalty orders in the Federal Court in relation to the breaches and that both parties will submit to the Court that an appropriate penalty would be $130,000. It is ultimately a matter for the court to determine the civil penalty.

ACMA has taken the step of applying for civil penalty orders against 2UE, having earlier tried to address 2UE’s compliance failures through other means. These latest breaches occurred at a time when 2UE had given ACMA an enforceable undertaking to improve its performance, particularly in relation to the John Laws Morning Show,’ said Chris Chapman, ACMA Chairman.

An enforceable undertaking was offered by 2UE and accepted by ACMA in September 2007 in response to ACMA’s findings that 2UE breached the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 (the Disclosure Standard) 20 times during a broadcast in August 2006. The broadcast included extended discussion of the issue of Telstra’s privatisation. Compliance with the Disclosure Standard is a condition that applies to all commercial radio broadcasting licences.

‘ACMA notes that Fairfax Media only acquired control of 2UE late in the period during which the breaches occurred, and acknowledges the cooperation of Fairfax inherent in conceding these breaches and working to improve compliance at 2UE,’ said Mr Chapman said.

‘However, ACMA —and the Australian Broadcasting Authority before it— has emphasised in previous findings against 2UE that the obligation to comply with program standards lies with the licensee itself; in fact it goes to the heart of a licensee’s obligations.

‘Broadcasting licences are not given out lightly by government and convey significant benefit to those to whom a licence is granted. It is a licensee’s unrelenting responsibility to manage its business, including its presenters and production staff, so as to ensure satisfactory compliance with the regulatory requirements.

‘Company management put at real risk the retention of these licences when they allow on-air personalities or other staff to breach the rules. One consideration informing the Authority’s agreement to consenting to the civil penalty order was its assessment that Fairfax genuinely accepts that proposition,’ Mr Chapman said.

ACMA’s findings in relation to the breaches in October and November 2007 are set out in the Compliance Assessment Report – Radio 2UE Sydney Pty Ltd, published on the ACMA website.

Media contact: Donald Robertson, ACMA Media Manager on 02 9334 7980.


The Disclosure Standard
The Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000 (the Disclosure Standard) requires a licensee to cause a disclosure announcement to be broadcast during a current affairs program when the name, products or services of a presenter’s sponsor are mentioned. A licensee must keep a register of commercial agreements between presenters and sponsors and must provide ACMA with details of those agreements.

Compliance by 2UE with the Disclosure Standard
In September 2007 ACMA found that 2UE failed to cause disclosure announcements on 20 occasions in August 2006 when Mr Laws mentioned a sponsor, Telstra, including during an interview with the then Prime Minister.

ACMA’s findings followed earlier findings by the former Australian Broadcasting Authority in December 2003 that 2UE had breached the Disclosure Standard on 19 occasions (in relation to sponsors Telstra and NRMA). At that time, the ABA also found six breaches of the special licence conditions imposed on 2UE in March 2000, following the Commercial Radio Inquiry.

In response to ACMA’s findings of September 2007, 2UE offered ACMA an enforceable undertaking under which the John Laws Morning Show would be monitored and 2UE would take action if disclosure statements were not made when sponsors were mentioned.

Under the terms of the undertaking the licensee agreed to implement a number of measures in regard to the John Laws Morning Show which were designed to ensure compliance with the commercial radio standards. One such measure was the provision of periodic monitoring reports. An independent reviewer was appointed by the licensee to review samples of the John Laws Morning Show and provide ACMA with regular reports on 2UE’s compliance with the Disclosure Standard.

The first monitoring report was provided to ACMA on 18 October 2007 and the final report was provided shortly after Mr Laws retired from broadcasting on 30 November 2007. In total, the reports presented a sample of 17 programs over two months.

Fairfax Media acquired 2UE from Southern Cross Broadcasting in November 2007, after most of the breaches had occurred.

Compliance Assessment Report – Radio 2UE Sydney Pty Ltd
ACMA reviewed the monitoring reports for compliance with the undertaking and compiled a Compliance Assessment Report (the report). ACMA identified 13 incidents, all amounting to breaches of the Disclosure Standard, when no disclosure announcement had been made. As 2UE had either failed to take action in relation to these breaches, or had failed to report the breaches to ACMA (or both), ACMA found that 2UE had breached its enforceable undertaking on these occasions.

ACMA also found that 2UE had breached a standard licence condition set out in the Broadcasting Services Act 1992 (the BSA). One of the standard conditions for commercial radio licences, set out at section 8(1) of Schedule 2 to the BSA, is the requirement that the licensee will comply with program standards applicable under Part 9 of the BSA. As the Disclosure Standard is a program standard made under Part 9, and ACMA found that the licensee breached the standard on 13 occasions, ACMA also found that the licensee breached the standard licence condition on 13 occasions.

Civil penalties under the Broadcasting Services Act
Subsection 140A(3) of the BSA provides that a commercial radio broadcasting licensee must not breach a condition of its licence. Subsection 140A(7) states that subsection (3) is a civil penalty provision.

ACMA can apply to the Federal Court for a civil penalty order to be made under section 205F of the BSA for breach of the licence condition.

ACMA is taking action in this matter against the licensee, Radio 2UE Sydney Pty Ltd. Under the Disclosure Standard and the licence conditions that apply to commercial radio services, it is the licensee’s responsibility to ensure compliance.

Fairfax Media acquired full operational control of 2UE on 9 November 2007, following the acquisition of Southern Cross Broadcasting (Australia) Limited by Macquarie Media Group (MMG) and MMG’s sale of 2UE and other commercial radio licences to Fairfax Media. Most of the breaches of the licence condition occurred before Fairfax Media acquired full control of 2UE, and Fairfax Media cooperated with ACMA in investigating the breaches. Fairfax Media has since taken a number of steps to improve compliance at 2UE.

Although Fairfax Media only gained operational control of 2UE on 9 November 2007, the licensee has not changed and its enforceable undertaking of 24 September 2007 continues to apply. Fairfax Media has assumed responsibility for compliance with the undertaking and all the other regulatory and legislative obligations attaching to the broadcasting licence.

ACMA and Fairfax Media have reached agreement that an appropriate level for the penalty would be $130,000, comprising $10,000 for each of the 13 breaches.