Commission welcomes dismissal of NZME/Fairfax merger appeal

Commission welcomes High Court’s dismissal of NZME/Fairfax merger appeal

The Commerce Commission has welcomed the High Court’s dismissal of NZME and Fairfax’s appeal against the Commission’s decision to decline their media merger.

In May 2017 the Commission declined the merger on the grounds it would be likely to substantially lessen competition in advertising and reader markets. The Commission also determined it would concentrate New Zealand news media ownership and influence to an unprecedented extent for a well-established modern liberal democracy.

NZME and Fairfax appealed the decision to the High Court in Wellington in October.

In a summary of their judgment released today, Justice Dobson and lay member Professor Martin Richardson dismissed the appellants’ process criticisms and found the Commission was entitled to place significant weight on the prospect of reduced quality of the products produced by the merged entity.

The Court also upheld the Commission’s jurisdiction to consider the material public impact arising from a loss of media plurality.

“On all of the evidence before the Commission, we consider that it is appropriate to attribute material importance to maintaining media plurality. It can claim status as a fundamental value in a modern democratic society… We agree with the Commission that a substantial loss of media plurality would be virtually irreplaceable,” the Court said.

The Court did not uphold the Commission’s view that the proposed merger would be likely to substantially lessen competition in the advertising market for Sunday newspapers, and dismissed the prospect that one of the appellants would introduce an online paywall post-merger.

Commission Chair Dr Mark Berry welcomed the Court’s decision. “The merger determination and subsequent appeal have been a significant and resource intensive piece of work for the Commission over the past 18 months,” Dr Berry said.

“The Court’s ruling confirms we have the jurisdiction to consider detriments beyond those which are economic and that we can consider the wider public benefits when assessing merger authorisation applications.”

The Court indicated the Commission is entitled to seek costs.

The Court’s decision can be found at http://www.courtsofnz.govt.nz/judgments/high-court

Documents relating to the Commission’s original determination can be found here.

Background
In May 2016 Fairfax and NZME sought authorisation to merge their New Zealand operations.

Authorisation applications follow a two-step process under the Commerce Act. Our Authorisation Guidelines provide further detail on the process we use to determine authorisation applications.

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