INDEPENDENT NEWS

ComCom went outside its role in rejecting StuffMe merger

Published: Mon 16 Oct 2017 05:46 PM
ComCom went outside its role in rejecting StuffMe merger, court hears
By Sophie Boot
Oct. 16 (BusinessDesk) - The Commerce Commission overreached its statutory mandate when it rejected a possible merger between New Zealand's two largest print media companies, Wellington's High Court has heard.
David Goddard QC, the media companies' lawyer, said the regulator placed an emphasis on the importance of plurality in media in its decision to reject the merger, as it was concerned it would lead to a reduced number of voices and viewpoints discussing important issues, but that is not within its statutory function under the Commerce Act.
The act is an economic statute concerned with the economic welfare of New Zealanders as consumers, not as citizens, he said.
"Those detriments fall outside the scope of the Commerce Commission's sphere of responsibility," Goddard said. "It has neither the mandate to take that into account, nor the ability to do so. It's not the sort of analysis the Commerce Commission should be undertaking."
Goddard accepted diminishing quality of news coverage would be under the Commerce Commission's remit to consider, but said there would be strong pressures on the merged firm to maintain and enhance the quality of its content in order for it to sustain its readers' attention.
Even if the legislation was broad enough for the regulator to consider plurality in the way that it has, the commission's approach had been "essentially speculative" and not supported by the evidence, Goddard said.
He outlined the media companies' arguments on the three markets which the regulator had competition concerns about - online coverage, Sunday newspapers and 10 community papers where the two companies overlap.
Goddard reiterated concerns about the shrinking advertising market for online news websites, as they struggle with Facebook and Google "eating their advertising lunch", and said it was "not for is to sit in judgement and say consumers should be reading more about Winston Peters and his decision this week and less about the Kardashians."
Social media has led to a radical change in the way most people read news, Goddard said, with many clicking through from their Facebook feed but returning to Facebook after, rather than staying on the news website.
On the prospect of a paywall, which the commission discussed in its decision, Goddard said the regulator had been wrong to find that there was any real prospect of one being introduced on the New Zealand Herald website and not on Stuff.
"There was absolutely no supporting evidence of a New Zealand Herald-wide paywall," Goddard said. "The cost of doing that in terms of foregone reader attention was too great."
Goddard said news media overseas have had unhappy experiences with paywalls, and no organisations would put in place a paywall that cost more in reach than it brought in revenue. If a paywall were put up, such as one for a specialised subsection such as business, it wouldn't result in any real lessening of competition, but would just be a rebalancing of prices, he said.
The case continues this afternoon. Before the lunch break, Goddard said he wanted to play a video to show the court how a modern news consumer reads news, although the Commerce Commission's lawyers intend to argue it shouldn't be shown.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Norris steps down as Fletcher chair after $486M provision
By: BusinessDesk
Concerns with suggestion to “scrap” fishing monitoring
By: WWF
Genesis’ plan to keep coal burning until 2030 stuns
By: Genesis
NZ Prime Minister recognises science that saved kiwifruit
By: Plant and Food Research
Fund encourages lower-emissions technology
By: New Zealand Government
Formica may be non-core, saleable asset for Fletcher
By: BusinessDesk
Investors have 4-month wait for 'new-look' Fletcher Building
By: BusinessDesk
MARKET CLOSE: NZ shares dragged lower by Fletcher Building
By: BusinessDesk
UPDATE: Fletcher stock drops 13% as Norris steps down
By: BusinessDesk
Fletcher extends trading halt until Wednesday
By: BusinessDesk
Scale of Fletcher debacle “gobsmacking”
By: E tu Union
Sub-Contractors: Fletcher's Needs to Place Blame on Doorstep
By: Specialist Trade Contractors' Federation
Embattled Fletcher Building to face protest tomorrow
By: Save Our Unique Landscape
We welcome refusal to bail-out Fletcher Building
By: New Zealand Taxpayers' Union
Fishing boss admits it's "commonplace" to not report bycatch
By: Forest and Bird
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media