SEC moves to shut down Rappler

Philippine media outlet Rappler is facing closure after the Philippine Securities and Exchange Commission (SEC) en banc revoked the company’s registration for allegedly violating the country’s Constitution.  The watchdog has also accused them of violating the Anti-Dummy Law, the Corporation Code and the Securities Regulation Code.

“The En Banc finds Rappler, Inc. and Rappler Holdings Corporation, a Mass Media Entity and its alter ego, liable for violating the constitutional and statutory Foreign Equity Restriction in Mass Media, enforceable through laws and rules within the mandate of the commission,” read the decision dated January 11, published on Monday, January 15.

The Philippine Constitution says that mass media companies must be fully owned by Filipinos, forbidding any overseas ownership.  The SEC claims that Rappler had violated those rules by taking funds from Omidyar Network, a self-described philanthropic investment firm created by eBay founder Pierre Omidyar, a non-Filipino.

Rappler argues that the investors provided funding through a Philippine Depository Receipt (PDR) which essentially allow companies to invest in media companies without becoming owners.  Many national companies are said to use PDRs.

In a response statement published on Rappler’s website Monday, the company described the ruling as “pure and simple harassment” and said, “the SEC’s kill order revoking Rappler’s license to operate is the first of its kind in history — both for the Commission and for Philippine media.”

“What this means for you, and for us, is that the Commission is ordering us to close shop, to cease telling you stories, to stop speaking truth to power, and to let go of everything that we have built — and created — with you since 2012,” said the statement.

Rappler argued that in 2015, the SEC had itself accepted the Omidyar-related documents submitted by Rappler.

“Every year since we incorporated in 2012, we have dutifully complied with all SEC regulations and submitted all requirements even at the risk of exposing our corporate data to irresponsible hands with an agenda,” the statement added.

“Transparency, we believe, is the best proof of good faith and good conduct.”

Other government officials and news agencies were quick to defend Rappler, including Philippine Vice President Leni Robredo and Amnesty International.

Robredo, who has also been critical of Duterte, said, “Yung media, sila ‘yung inaasahan na maging watchdog…  Kung wala nang bantay, ano ‘yung makakahadlang sa pang-aabuso ng mga opisyal ng gobyerno (The media, they are expected to be watchdogs… Without watching, what will prevent the abuse of government officials)?

Amnesty International called the ruling “an alarming attempt to silence independent journalism.”

Presidential spokesperson Harry Roque denied the move as being an attack on press freedom, but about the compliance of the Filipino ownership rules.

“The issue at hand is the compliance of 100 percent Filipino ownership and management of mass media,” said Roque.  “It is not about infringement on the freedom of the press.”

“No one is above the law,” he added.  “Rappler has to comply.”

In an interview on Tuesday, January 16, Roque said that the Philippine Department of Justice (DOJ) may file charges against Rappler due to having “legal basis” brought forth by the SEC.

“It’s up to the DOJ now.  Of course they have the legal basis to do so because the SEC decision is very clear.  This is a possible violation of the Anti-Dummy Law,” said Roque.

Those in violation of the Anti-Dummy Law face imprisonment of five to 15 years.

Rappler’s acting manager editor Chay Hofilena told AFP that Rappler intends to file a court appeal against the SEC’s ruling which is due to take effect in 15 days.

Media confrontation

This isn’t the first time media companies have faced confrontation by the Philippine government.  In March of last year, Duterte attacked media outlets Philippine Daily Inquirer and ABS-CBN, calling them “sons of whores journalists.”

“I’m not threatening them but someday their karma will catch up with them,” Duterte said.

Inquirer said in a following statement that they took exception to his remarks and that they “upheld the highest standards of excellence in journalism.”

Four months later, the outlet revealed that its owners were in talks of selling the publication.  Ramon Ang — the country’s tenth wealthiest man according to Forbes — disclosed his plan to buy Inquirer shortly after.  Ang was a big supporter of Duterte’s presidential campaign in 2016, including fiscally.

Last year, ABS-CBN was threatened by Duterte to have its operating franchise renewal blocked — the permit requires congressional approval.

But for Rappler, the battle seemed to officially begin in December 2016 when the SEC was ordered by the Office of the Solicitor General to conduct an investigation on Rappler over its PDRs.

By July 2017, the SEC had created a committee to investigate the issue.  In a state of the nation address (SONA) that month, Duterte made his first public comment against the news site, calling them out for being “fully owned by Americans”.

Rappler has since maintained that they are 100 percent Filipino owned, even if PDRs are used.  The company has noted that outlets ABS-CBN 2 and GMA 7 also used PDRs.

“Philippine Depositary Receipts do not indicate ownership.  This means our foreign investors, Omidyar Network and North Base Media, do not own Rappler.  They invest, but they don’t own.  Rappler remains 100 percent Filipino-owned,” read a statement following the SONA comment.

Age of “fake news”

On Tuesday, January 16, Duterte made his latest remarks against Rappler during a speech for a new air traffic management system’s inauguration in Pasay City.

“For your information, you can stop your suspicious mind from roaming somewhere else.  But since you are a fake news outlet then I am not surprised that your articles are also fake, “ said Duterte in an interview.

“Sumobra kayo (you went too far), you are not only throwing toilet paper, you are throwing shit at us,” he added.  His answers were in response to recent articles published about the Special Assistant to the President Bong Go, which claim Go had been meddling in warship acquisitions.

Formed in 2012, the media company has grown to become the tenth most visited website in the country, according to Alexa.  The company has nearly seven million followers across its social media account and has expanded its local coverage to Indonesia.

The issue of “fake news” has become a burning topic in the recent media landscape, especially in the Philippines where nearly 97 percent of online Filipinos use Facebook which has proven to be a powerful platform for sharing information as evident by both Rappler and Duterte’s administration.

Headlines once linked to a report from Facebook that called Duterte the “undisputed king of Facebook conversations.”

In an in-depth article by Bloomberg, Rappler’s CEO Maria Ressa was quoted being open to the opportunities Facebook offered in politics.

“At the beginning I actually loved it because I felt like this was untapped potential,” Bloomberg quoted Ressa saying.

Ressa and Duterte had once sat across from each other for a question and answer Rappler forum called #TheLeaderIWant that was broadcasted on 200 television and radio stations, and live streamed at viewing parties in over 40 colleges across the nation.

“Duterte’s campaign on social media was groundbreaking,” she added.

But in the following months, the company found itself under attack for its coverage of the administration’s war on drugs, its social media practices, and general ruling style.

After writing an article titled “Propaganda War:  Weaponizing the Internet” in October 2016, Ressa said she almost immediately began receiving hate messages, many of which were violent.  And armed guard was hired to stand outside her office.

Shortly after, a campaign for unfollowing Rappler was launched, causing the outlet to lose approximately 52,000 Facebook followers.

The campaign was promoted by public figures like singer-dancer turned assistant secretary of the Presidential Communications Operations Office, Mocha Uson who was personally mentioned in the Rappler piece.

Ressa wrote in an article published last November after the company was recognized by the National Democratic Institute, that she had received more threats since founding Rappler than in the three decades she has worked as a conflict reporter and war zone correspondent.

She also expressed concern over Facebook’s role in monitoring fake news.

“They haven’t done anything to deal with the fundamental problem, which is they’re allowing lies to be treated the same way as truth and spreading it,” Ressa wrote.  “Either they’re negligent or they’re in state sponsored hate.”

But now, the priority has shifted heavily on the SEC decision.  On a post to the company’s Instagram handle, Ressa said, “We are prepared.  Bring it.  We will continue to fight it and we will continue to push the government to respect and to maintain the rule of law.”

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