SEPTEMBER 1995 · VOLUME 16 · NUMBER 9
T H E F R O N T
SEPTEMBER 1995 · VOLUME 16 · NUMBER 9
T H E F R O N T
IN THE LONGEST LIBEL CASE in British history, two activists have stood up to a multinational corporation that rakes in $24 billion annually. The activists are challenging corporate use of the British legal system to elicit apologies from critics by threatening them with costly and time-consuming libel suits.
McDonald's issued writs to Helen Steel and Dave Morris, two environmental activists at London Greenpeace (which preceded and is not connected with Greenpeace International) in 1990 for distributing a six-page leaflet: "What's Wrong With McDonald's -- Everything They Don't Want You To Know."
McDonald's charges that the defendants' leaflet libeled the company by claiming that it is responsible for environmental destruction and contributes to such diseases as heart disease, cancer and diabetes. The leaflet covers issues ranging from environmental concerns and nutrition to employee exploitation and animal abuse.
British libel laws are heavily weighted toward the plaintiff. What has become known as the "McLibel" case is widely seen as a SLAPP (Strategic Lawsuit Against Public Participation) suit. Not only do British libel defendants face extraordinary costs, but they have to prove the truth of their statements without the use of "secondary evidence" such as press releases or photographs. They can only use such primary sources as witnesses and official documents.
The so-called "McLibel Two" have adamantly defended their claims for more than three years. Unfazed by their lack of litigation experience or by McDonald's highly paid legal team, the dynamic duo have converted their homes into offices, where they fight on, backed by an international McLibel Support Campaign.
McDonald's won a major victory early in the trial, when Justice Roger Bell ruled that the company should be afforded a right to trial without a jury. McDonald's lawyers argued that the issues are "too complex" for a jury to understand. It also emphasized that it will not recover its costs and damages if it prevails in the suit, since the defendants are unemployed.
McLibel defendant Dave Morris says McDonald's knew the defendants were unemployed when it slapped the writs on them in 1990 and that did not deter the company then. "By putting forward this argument, they are saying blatantly that you have no right to a fair trial and to justice unless you are rich enough to pay for it."
Chewing the fat
Steel and Morris have defended both their nutritional and environmental claims. In October 1994, Dr. Neal Barnard, president of the Washington, D.C.-based Physician's Committee for Responsible Medicine, testified that McDonald's food contains "significantly more fat than government guidelines and health authorities recommend." In a damning cross-examination, McDonald's Senior Vice President Edward Oakley admitted that the corporation did not have a department solely responsible for nutrition because it does not consider nutrition as important as marketing or communications.
Steel and Morris mounted a strong defense of their contentions that McDonald's was serving unnecessarily packaging-intensive products. The packaging for hamburgers and other hot McDonald's foods contained ozone-damaging hydrochlorofluorocarbons (HCFCs) and is "recycled" in only five of the chain's 550 restaurants in Britain.
Brian Lipsett, director of the Pennsylvania-based Environmental Background Information Center, testified that the problems associated with using styrofoam packaging include the leaching of styrene from the packaging into the foods. Styrofoam production exacerbates smog and damages the ozone layer. Further, the sheer volume of styrofoam used by McDonald's makes disposal difficult, he said.
Professor Graham Ashworth, director general of the Keep Britain Tidy Group, testified that McDonald's was in the "top 1 or 2 percent" of litter-producing companies.
Steel and Morris have also stood by their allegations regarding the environmental impact of McDonald's massive appetite for beef. The fast-food giant, which has 15,000 restaurants worldwide, is the world's largest beef consumer. The McLibel Two contend that some of the beef comes from former rainforests that were cleared for cattle. McDonald's has admitted that some of their beef comes from Costa Rica, where cattle graze on land that was deforested during the 1970s, when Costa Rica had the highest deforestation rate in the world.
According to the duo, leaked internal McDonald's documents also show that the company secretly imported beef from Brazil until the mid 1980s, something which McDonald's denies. The group also used Prince Philip, the Duke of Edinburgh, as a source for this claim, citing comments the Prince made at a 1983 Worldwide Fund for Nature meeting in Canada. Prince Philip has since said that his remarks were based on hearsay.
Mike Love, head of communications at McDonald's UK, refused to comment specifically on the Costa Rican controversy, saying that the company would submit its evidence in court by November 1995. Love denies the defendants' main contentions in general terms, saying McDonald's "refutes all allegations."
Fast-food transcripts
A recent issue in the case is grist for Morris' theory that the weight of gold is upsetting the balance of justice. Daily court transcripts, which normally take three weeks and $33 to acquire, are being professionally produced by McDonald's on the same day at a cost of $576. Until recently, McDonald's gave copies to both the defendants and the judge. But on July 18, McDonald's cut the defendants off. According to Richard Rampton, McDonald's lawyer, the company will only give copies to the defendants if they submit a written statement saying they will not read or copy any extracts to any defense witnesses, journalists or legal advisers. Rampton says this policy is designed to prevent dissemination of transcripts to journalists. Dave Morris denounces this as an attempt to "gag the press."
Love says McDonald's will drop the suit if the two defendants acknowledge that their allegations are untrue and promise never to repeat them. But Dave Morris and Helen Steel say they will press ahead until three conditions are met. McDonald's must:
-- Kanika Singh
IN JUST TWO SHORT DAYS, the U.S. media and entertainment industry transformed itself from a market with already limited competition into a perilously concentrated one.
Critics warn that the $5.4 billion takeover of CBS by Westinghouse and the $19 billion takeover of Capital Cities/ABC by Disney significantly diminish entertainment localism and broadcasting diversity.
"Corporate concentration in the media requires that we ask more questions about the voices that are driven out of the major outlets," says Elizabeth Thoman, executive director of the Los Angeles-based Center for Media Literacy. "Corporate control of the media means less community oversight."
Although both mergers are contingent upon approval from the Justice Department, the Federal Communications Commission (FCC) and shareholders, the takeovers are expected to be consummated. An FCC statement on the Disney-ABC merger sounds more like a congratulatory note than a regulatory statement. "Disney-ABC will have the finances, program resources and economies of scale to better serve the public," Commissioner James H. Quello gushed. "They will be better able to compete with other communication giants such as Time-Warner, Viacom-Paramount, GE-NBC, and Fox with their programming interests."
Such media mergers have found an equally receptive climate in Congress. Recent telecommunications bills passed by the House and Senate pave the way to massive ownership consolidation in the entertainment and broadcasting industry. These bills would lift significant restrictions on vertical integration in the media industry, meaning, for example, that broadcast networks could own a larger stake in local stations or in production companies that develop television shows.
Current regulations prohibit one company from owning more than 12 stations nationwide or from owning stations that reach more than 25 percent of the population. Westinghouse-CBS would reach roughly one third of all U.S. households, an amount that will only be legal if a permissive telecommunications deregulatory bill is enacted.
Many analysts view the Disney and Westinghouse mergers as the tip of the iceberg. "Mergers allowed in all sectors of the industry flushed with cash will reintegrate monopolies that will be worse than Ma Bell," says Brad Stillman, media policy director of the Consumer Federation of America. "Vertical integration will increase costs to consumers because of a lack of competition. You can expect a proliferation of pay services that traditionally had no subscribers' fee."
Programming costs are likely to increase as broadcasters charge for pay-per-view and data transmissions. New fees may price some audiences out of the public airwaves.
Near-total market penetration
If the ABC-Disney merger is approved, Disney will become the first single corporation to own all four key distribution channels: filmed entertainment, cable television, broadcasting and telephone wires (through its joint venture with three regional Bell operating companies). Disney will have access to more than 99 percent of U.S. homes to distribute and promote its films, videos and merchandise. The merger combines the nation's most-watched television network -- which includes eight television stations, 225 affiliate stations and the largest radio network -- with Disney holdings that include the world's most popular amusement parks, a major movie studio and the Disney Channel. This merger is the second largest in U.S. history, surpassed only by the hostile $25 billion RJR Nabisco takeover by leading leveraged-buyout boutique, Kohlberg, Kravis Roberts and Co., in 1989.
Disney President and Chief Executive Officer Michael Eisner assured other programmers and networks that ABC will not receive exclusive preference for Disney productions. "It would not make sense for us to force programming onto the schedule that in any way reduces the size of our audience," he said in comments to the trade press. "[We] are not looking to dominate ABC's prime time schedule." But Disney reported to the Securities and Exchange Commission that it will provide ABC with "a full slate of Saturday morning programming designed for the children's market."
Gordon Crawford, an investor with the Capital Group, which owns stock in both companies, reports that, "Over time, a decent portion of the programming on the [ABC] network could be from Disney, I'd say something like half."
It's a small world, after all
Disney's access to overseas markets was a major consideration in the ABC takeover. ESPN and the Disney Channel will travel "together around the world" in Eisner's words. Although ABC is considered an amateur in international markets, ABC's ownership of ESPN and ESPN International Networks, which reach 70 million homes in 130 countries, was an attractive asset that complements Disney's global outlook.
Disney products are popular in many international markets because they shy away from political controversy and are easily dubbed into foreign languages. The Disney Channel already has 14 million viewers in the United States, Europe, Asia and Latin America. When combined with ABC's co-production deals with local television programs, Disney will have the largest distribution network in the world.
"When you further the growth of corporatism, you demand the largest possible audience at the lowest possible price," says Ben Bagdikian, author of Media Monopoly, the book that warned of rapidly increasing media concentration. "To assure this, use your own products on your own delivery system. These products will invariably consist of sex and violence because it exports well and can be easily reproduced as well as fixes your attention."
While Disney has sought to project a wholesome image, its aggressive expansion has brought increasingly violent and sexual programming that runs afoul of conservative groups. "Disney has created a situation where families can no longer trust every Disney product," says Bob Smithoser, editor of Parental Guidance Newsletter, published by Colorado Springs, Colorado-based Focus on the Family. "Arms of the company such as Miramax have distributed films like 'Pulp Fiction,' 'Kids,' 'The Crying Game,' 'Clerks,' and 'Priest' that insult our intelligence and undermine traditional family values."
Stillman of the Consumer Federation of America attributes increased sex and violence in the media to a shrinkage of entertainment localism. "Programming represents the values of specific communities," he says. "The further away decisions are made about programming, the less likely it will reflect what the local community desires."
Just the start
The trend toward consolidation will not end soon. In the week after the two mega-mergers, NBC followed the lead of its rival networks by quickly buying three additional television stations in top-50 markets from Outlet Communications, Inc. Similarly, Dow Jones & Co. and ITT Corp. agreed to pay $207 million for a New York station and Chancellor Broadcasting Co. bought 19 radio stations from Shamrock Broadcasting Co. for $395 million.
Congressional approval of a deregulated telecommunications bill may create new rules for media acquisitions and mergers. All four networks -- NBC, FOX, ABC, and CBS -- are now under the control of corporate conglomerates. Some analysts predict that 10 or 12 companies could own all major media and entertainment outlets by the year 2000.
Some observers worry that increasing corporate concentration in broadcast media will result in homogeneous programming that weeds out dissenting voices. "Consumers must realize the business interests' impact on the media culture," says Elizabeth Thoman of the Center for Media Literacy. "Corporate interests make the most for stockholders while the rest of the culture, including minority and alternative voices, continue to be shut out. We need to challenge these corporate entities so that a full array of voices is heard according to a democratic society."
"There is a real threat that news coverage will be further watered down by the entertainment ethic," says Jim Naureckas of Fairness and Accuracy in Reporting (FAIR). "This is especially dangerous when two major networks own controversial technology in nuclear power. An actual conflict of interest arises when companies that have a direct stake in public policy own all of the outlets for public information. Westinghouse and GE [which owns NBC] sell large amounts of military weapons abroad. I doubt there will be any hard-hitting coverage on [such sales to] Indonesia, China or South Korea."
"Our broadcasting history points to the separation between news gathering and the other parts of our business," Westinghouse public relations officer Roy Morrow says. "Westinghouse has a history of excellence in programming through its stations and we plan to continue that tradition through the programming excellence at CBS."
While a Disney spokesperson declined to respond to repeated questions from Multinational Monitor, an ABC spokesperson says, "It is very unlikely that there will be any change in the content of the news as a result of the merger. The ABC news department is a separate entity that will not tolerate corporate intrusion. A smart operator understands that a good newscaster will leave if they feel they are being bullied."
Ben Bagdikian disagrees. "Media power is political power," he says. "There is a dangerous change in the philosophy of the airwaves to permit the growth of corporations and the deregulation of the government to the point of decimating the consumer."
-- Charles Carbone