SNAP: ComCom sticks to its guns in rejecting NZME-Fairfax NZ merger

Wednesday 3rd May 2017

The Commerce Commission has stuck to its guns in rejecting a proposed tie-up between the country's major news publishers Fairfax New Zealand and NZME, reiterating its concerns that while the merger could buy the companies some time it would concentrate too much media influence in one entity.

The antitrust regulator affirmed its draft decision in rejecting the proposed merger, saying its primary concern was that the deal would reduce the quality of news produced and the diversity of voices available to the public.

"In our view, the merged entity’s competitors would not be able to constrain it in any real way from making cost-cutting decisions that reduce quality and plurality," chairman Mark Berry said in a statement. "The extent of internal plurality is also discretionary on the part of the media owner and we do not regard promises to maintain current levels as a sufficient safeguard on future editorial decisions."

The regulator indicated in its draft decision last November that it wouldn't allow it a transaction that would "result in an unprecedented level of media concentration for a well-established liberal democracy" with the potential loss of multiple media voices. Since then, Fairfax and NZME have worked hard to convince the commission they'd got it wrong in their draft determination to reject the deal over fears the aggregated soft power wasn't worth the economic efficiencies from laying off staff, cutting duplication, and pooling their resources in a more targeted fashion.

(BusinessDesk)

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