Fairfax-NZME merger faces investigation

  • 14/06/2016
Fairfax-NZME merger faces investigation

The Commerce Commission will look at whether there are separate digital and print media markets as part of its vetting of the proposed marriage of the country's two biggest newspaper publishers.

The antitrust regulator has identified preliminary issues facing the deal between Fairfax and NZME and wants to make a decision by August 22 -- although that may get pushed out.

Among those is whether there are separate product markets for the supply of online and print advertising and content, and whether there's a material overlap in online advertising and the supply of news and entertainment via Fairfax's and NZME's websites.

A number of media companies both internationally and within New Zealand were now charging for content through paywalls, the commission said.

"We will assess whether or not the merged entity would have the ability and incentive to introduce such a paywall and whether or not this would encourage other content providers to follow suit."

The two media companies pushed the idea that they can't compete in the online ad space against the likes of Google and Facebook without combining their resources, and that audiences and advertisers are agnostic as to the platform they use to get information.

"We will examine the extent to which both advertisers and readers view different media as substitutes," the regulator said.

It will also assess whether Fairfax and NZME are competing with the likes of Facebook and Google, and if that rivalry would constrain a merged entity's ability to raise prices.

The commission will also examine how much competition TVNZ's and MediaWorks' websites offer readers, and also what comparable content is provided by international media groups.

Other areas of overlap the commission singled out were in the Sunday papers, Hawke's Bay and the Waikato, and in free community publications.

The regulator also said it would look at the impact of the merged entity's increased stake in online ad exchange KPEX, which is also owned by MediaWorks and TVNZ.