NZME and Fairfax appeal ComCom ruling

Merger proponents argue commission was wrong in fact and law.

Media companies NZME, Fairfax Media and Fairfax NZ have filed an appeal in the Wellington High Court against the Commerce Commission’s May 3 decision to reject their merger application.

In a statement to the NZX, NZME said: “After careful review and analysis of the NZCC’s reasons, the companies believe the NZCC was wrong in fact and wrong in law to decline clearance or authorisation for the merger.”

The companies have hired Queens Counsel David Goddard to appeal the commission's rejection of their planned merger, hoping his pedigree in the Cavalier wool-scouring authorisation will win the backing of the courts. The media groups cited the long-running case extensively in their application to the regulator, which also drew on the ruling in its decision to reject the merger.  

In their notice of appeal, the companies argued that the commission was wrong in several areas.

Among their arguments, they said the commission was wrong to conclude there were separate markets for online news, Sunday newspapers and community newspapers.

They also argued the commission had failed to consider properly the economics of two-sided markets – such as the separate but interdependent customer bases of advertisers and readers.

The commission had also failed to give enough weight to the competition provided by other news providers, such as NBR, the Otago Daily Times, Listener publisher Bauer, The Spinoff, BusinessDesk, Australian Associated Press and bloggers.

It had erred in concluding there would be a substantial lessening of competition in online news from the merger of the NZ Herald and Stuff websites, in particular by finding TVNZ, MediaWorks and Radio NZ would provide only weak competition.

Some parts of the appeal case were redacted but NZME and Fairfax’s arguments included a complaint that the commission was unfair in allowing submissions against their merger to remain anonymous.

Fairfax Media, the owner of Fairfax NZ, is subject to two takeover proposals from private equity investors. 


RELATED VIDEO: Our panel dissects the rejected StuffMe merger (May 3)
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