Competition viability tops ComCom's preliminary issues for Fairfax-NZME merger

The Commerce Commission has outlined specific aspects of the Fairfax and NZME merger application it will assess in deliberating whether to give clearance to the venture.

A statement of preliminary issues has been released, which indicates the ComCom will investigate whether the proposed merger is likely to substantially lessen competition in relevant advertising and reader markets.

It will also consider whether the merged entity will be able to raise the price of or reduce the quality of services it provides to readers and advertisers.

In the media companies’ merger application document, they noted a potential aggregation of paid Sunday papers, several paid metropolitan newspapers, free community publications, the supply of online advertising and the supply of digital news and information content.

The merger application contained several pages of online competitors to their respective businesses, from Newshub and TVNZ to Pinterest and Instagram.

“We will assess the extent to which websites such as TVNZ.co.nz and Newshub.co.nz compete with the merging parties for readers, and the extent to which international media companies are able to offer comparable content to New Zealand-based parties,” the ComCom says.

The ComCom will also consider “the without the merger scenario” – what will happen to relevant markets if the merger is declined.

“The applicants have suggested that the appropriate scenario without the merger is the status quo. We will consider to what extent (if any) Fairfax and NZME intend to reposition or expand their offering without the merger,” the competition regulator says.

Further key points to be assessed include the ability for a merged entity to restrict access to programmatic advertising company KPEX, and whether a merged entity will be able to implement a paywall.

The statement of preliminary issues also emphasises the importance of local content despite international competition for broader news and information.

A decision is due on August 22. Submissions can be made by emailing registrar@comcom.govt.nz with the reference NZME/Fairfax in the subject line.