ComCom says Nyet

The Herald reports:

Two of New Zealand’s biggest media companies should not be allowed to merge, the Commerce Commission said today.

In a draft determination released this morning, the Commerce Commission has proposed to decline the NZME/Fairfax merger. In a tweet it hashtagged the proposed merger as #StuffMe.

Heh love the hash tag. A good description of what may have happened if approved. I suspect it refers to NZME and Fairfax’s Stuff but still amusing.

The Commission said in its preliminary view, the merger would be likely to substantially lessen competition in a number of markets, including the markets for premium digital advertising, advertising in Sunday newspapers and advertising in community newspapers in 10 regions throughout New Zealand.

“It also considers the merged entity would be likely to increase subscription and retail prices for Sunday newspapers and introduce a paywall for at least one of its websites,” the Commission said in its draft determination.

The two media companies made a joint statement to the NZX this morning, saying the Commission’s concerns relating to plurality of media were “unquantified.”

“The parties’ view is that the NZCC has failed to properly take into account the diversity of opinions that will continue post-transaction in an increasingly converged digital world,” the statement said.

The media companies actually cited Kiwiblog as one of their competitors and as a reason for the merger to be approved. While flattering, I don’t think you can compare blogs to media companies with hundreds of staff.

I’m glad the provisional decision is to say no, as the merger would have resulted in a lot of job losses. But if the final decision is also no, that doesn’t mean the status quo will continue. Both companies are likely to continue reducing staffing numbers regardless.

Commission chairman Dr Mark Berry said the merger would result in one media outlet controlling nearly 90 per cent of New Zealand’s print media market.

This would be the second highest level of print media ownership in the world, behind only China, he said.

The merged entity would also control New Zealand’s two largest news websites – nzherald.co.nz and stuff.co.nz – which together had a population reach more than four times larger than the next biggest domestic news website.

Further, the merged entity would own one of New Zealand’s two largest commercial radio companies. “All this would result in an unprecedented level of media concentration for a well-established liberal democracy,” Dr Berry said.

Doesn’t make it sounds like a close call.