ACT leader David Seymour has labelled the Commerce Commission an "outmoded dinosaur" following its decision to block the planned Fairfax-NZME merger.
The combined entity would have held 90 percent of New Zealand's print media market, but Mr Seymour says this virtual monopoly is preferable to the status quo.
"What you've got is a media reality that is quite different from the way the Commerce Commission sees it," he told The AM Show on Thursday.
"They don't know if the new entity would have survived, they don't know what will happen now - whether there will be de facto mergers with other entities or if some of their assets will be sold off to each other or private equity or whatever. But what they've basically done is delay the change for almost two years, and as a result they've done massive damage to New Zealand journalism."
ACT prides itself on backing competition and free markets, but Mr Seymour says there's plenty of competition in the New Zealand media already.
"You're still going to have four different newsrooms - you've got Newshub, you've got TVNZ, you've got Radio NZ and you'd have the new entity. Four national newsrooms in a country the size of basically a large city - that would have been more than adequate competition."
Without the merger, he says small regional papers are likely to be the first to go.
Both NZME chief executive Michael Boggs and Fairfax managing director Andrew Boyle said they were disappointed with the decision, with Mr Boyle saying it showed the Commerce Commission has a "lack of understanding" about the effect the internet has had on the news industry.
Much of the advertising money that used to go to newspapers and websites is now being spent on Google and Facebook.
"The pace at which our global competitors are dominating advertising spend and changing the rules for others is not slowing. New ways forward are essential," said Mr Boyle.
Mr Seymour said the Commerce Commission was a "great idea at the time", but since then "the internet's happened", pitting small New Zealand companies against global giants.
Newshub.
