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News Navigator: Why are restrictions on foreign investment for broadcasters necessary?

Fuji Media Holdings Inc. President Osamu Kanemitsu explains the company's violation of foreign investment regulations, in Minato Ward, Tokyo, on April 8, 2021. (Mainichi/Hiroshi Maruyama)

The Mainichi Shimbun answers some common questions readers may have about foreign investment restrictions on broadcasters in Japan.

    Question: Recently a problem emerged over a broadcaster's violation of foreign investment regulations. Why do we need regulations?

    Answer: Broadcasters have strong influence and can sway public opinion. If foreign individuals or companies start to interfere in the management of broadcasting stations or their holding companies, it's feared that those foreign entities may misuse the power to sway news in favor of their country. This is why the Broadcasting Act imposes restrictions on the power of these foreign companies to speak out.

    Q: How does it become a violation?

    A: Shareholders are given voting rights to participate in corporate decision-making based on the number of shares they own. If foreign capital -- and thereby the level of voting rights -- exceeds 20%, it is considered a violation of the law and the broadcasting company's business certification and broadcasting license are revoked. The airline industry and Nippon Telegraph and Telephone Corp. also have restrictions stating that foreign investment must remain at less than one-third of the total. In comparative terms, it can be said that the broadcasting industry is more strictly regulated.

    Q: What specific violation was reported recently?

    A: A subsidiary of broadcasting company Tohokushinsha Film Corp. was found to have a level of foreign capital topping 20% at the time of its application for a satellite broadcasting business license, and its license was accordingly revoked. Other past violations have also been made public recently. Fuji Media Holdings Inc., which has Fuji Television Network Inc. under its umbrella, kept its foreign investment ratio at 19.9%, but there were shares that should have been excluded from voting rights which it forgot to do so, and as a result, the ratio exceeded 20% for about two years from 2012 to 2014. The Ministry of Internal Affairs and Communications, which received a report on the violation in 2014, merely issued a verbal warning and did not revoke the company's business license. In that case, the fact that the violation was not immediately publicized is also considered a problem.

    Q: Isn't it strange that the same violation was handled differently?

    A: The ministry cited the fact that in the case of Fuji Media Holdings, the violation had been resolved by the time it was discovered. However, this means that if the violation is corrected before the report is made, there is "no punishment" and the regulation is meaningless. There is a need to strengthen the checking system.

    (Japanese original by Tomofumi Inagaki, Cultural News Department)

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