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ACCC gives Foxtel-Ten tie-up the green light

The Australian Competition and Consumer Commission has cleared the purchase of a 15 per cent stake in Ten Network Holdings by pay-TV company Foxtel, a joint venture between News Corp Australia and Telstra. The regulator announced this morning that it would not oppose the purchase, nor the acquisition of 24.99 per cent stake in Foxtel’s...

The Australian Competition and Consumer Commission has cleared the purchase of a 15 per cent stake in Ten Network Holdings by pay-TV company Foxtel, a joint venture between News Corp Australia and Telstra.

667803610The regulator announced this morning that it would not oppose the purchase, nor the acquisition of 24.99 per cent stake in Foxtel’s advertising agency Multi-Channel Network (MCN).

It also will not oppose Ten’s option to acquire 10 per cent of Presto, a video streaming joint venture between Foxtel and the Seven Network.

ACCC chairman Rod Sims said the acquisitions were unlikely to cause any major reduction in competition.

“While the acquisitions will lead to a greater alignment of Foxtel’s and Ten’s interests, and will increase the degree of influence Foxtel has over Ten, the ACCC considers that the proposed acquisitions, on their own, are unlikely to result in a substantial lessening of competition,” he said.

Mr Sims said the regulator had not found sufficient evidence to establish a link between these minority acquisitions and the competition concerns raised by market participants.

“We will, however, closely examine any future increases in these shareholdings, including where this is made possible through changes to the existing media diversity and control rules.”

“We will, however, closely examine any future increases in these shareholdings, including where this is made possible through changes to the existing media diversity and control rules.”

The regulator took into consideration that Foxtel and Ten would continue to face competition from the remaining free-to-air networks.

“Streaming services were also likely to become increasingly important to the sale of sports rights,” Mr Sims said.

“The ACCC took into account the anti-siphoning regime and considered that it reduced competition concerns with this transaction. With a near monopoly pay TV provider in Foxtel, the anti-siphoning regime could well currently have a positive effect on competition in the market for television viewing.”

In respect to advertising, the ACCC concluded that the MCN acquisition was likely to increase the incentives for Ten and Foxtel to offer bundled advertising packages across their platforms, and to integrate their advertising strategies. However, the acquisition itself would not lead to a substantial lessening of competition.

“The ACCC has not, however, provided clearance for Ten’s agreement with MCN in relation to managing Ten’s advertising sales, which is not subject to the merger provisions of the Competition and Consumer Act 2010.”

The Australian Communications and Media Authority also has approved the deal as it there was no breach of any diversity and control rules.

The principal issue was whether the arrangements would put Lachlan Murdoch in a position to exercise control of commercial television broadcasting licences held by Ten.

This would have been unacceptable as Mr Murdoch was already in a position to control the Nova commercial radio broadcasting licences and News Corporation associated newspapers.

“However, the ACMA considered that, while Mr Murdoch was in a position to exert influence on Ten, that level of influence fell short of ‘control’ as prescribed by the Broadcasting Services Act.”

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