New Zealand’s two biggest news media companies have accused the competition watchdog of stepping beyond its jurisdiction in considering their proposed merger.
Publishers say that a focus of the NZ Competition Commission on media plurality as part of its deliberation has nothing to do with competition and is beyond its remit.
The accusation is made in a joint response by Fairfax NZ and NZME to a draft determination that signaled the merger would be denied.
Potential loss of media plurality “weighed heavily” on its decision, the commission said.
Publishers’ responded in their submission: “The Commission’s view that media regulation in New Zealand is insufficient to protect media plurality post-merger is a social policy judgment that the Commission is not permitted to make, let alone treat it as outweighing economic efficiency gains.
“Even if the Commission had jurisdiction to consider and seek social policy outcomes, Fairfax and NZME do not agree the merger will give rise to a material reduction in plurality of voices.”
The Commission will hold a two-day public conference on the issue next week.
It is likely to focus on whether the move would reduce commercial competition, enable price increases and reduce the quality and quantity of news content with potential flow-on effects for TV and radio.
Stakeholders and the general public can attend the Wellington conference if they registered before December 2. However, they will not be able to ask questions or voice opinion unless called upon.
Almost 100 public submissions have been made and a final decision is due on or before March 15.
A series documents and videos featuring executives has been included in the publishers’ response.
The publishers argue as “meaningless from an economic perspective” the Commission’s concern about the merger creating an entity controlling nearly 90 per cent of the print market.
They say daily newspapers do not compete with each other and only 13 per cent of New Zealanders get their news from print.
This data comes from a Fairfax NZ customer survey.
Publishers also spin the plurality argue back on the Commission. They say plurality would be lost if either were forced to significantly reduce investment in journalism.
“This would result in a loss of plurality, particularly as these cut backs would impact ‘niche’ areas, including regional and community reporting,” the submission stated.
Sinead Boucher, group executive editor of Fairfax NZ, said the merger would support the continuation of local journalism by creating synergies through the consolidation of back office functions.
The publishers also argue the nature of media competition has been misunderstood as they compete against digital businesses, TV and radio.
Fairfax is the nation’s largest print media network, featuring nine daily and three weekly newspapers, 61 community publications, 10 magazine titles and six websites, including stuff.co.nz. It also has a minority shareholding in social media site Neighbourly.
NZME owns eight daily and two weekly newspapers, 24 community publications, six magazine titles, 10 radio stations and 38 websites, including nzherald.co.nz. As well as websites related to its print and radio offerings, NZME owns a number of individual websites such as Grabone, Shop Green and Adhub.
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