High Court rejects NZME/Fairfax NZ appeal, upholds regulator's plurality ruling
By Paul McBeth
Dec. 19 (BusinessDesk) - The High Court has rejected NZME and Fairfax New Zealand's attempt to overturn a Commerce Commission ruling against a proposed merger of the country's dominant newspaper publishers and upheld the regulator's right to rely on the shrinking number of voices in the market.
Justice Robert Dobson and lay member Professor Martin Richardson yesterday dismissed the appeal, finding the regulator was entitled to place significant weight on the loss of media plurality if the merger went ahead, a key point of contention raised by the publishers. The court issued a media release today summarising the decision with the full judgment to follow once commercially sensitive information has been redacted.
The statement includes a comment from Justice Dobson on the issue of plurality, saying "we consider it is appropriate to attribute material importance to maintaining medial plurality" and that the risk of losing a wider voice "is clearly a meaningful one, and if it occurred, it would have major ramifications for the quality of New Zealand democracy."
The media companies appealed the decision at a hearing in October, claiming the regulator took too narrow a view in deciding a merger would create a monopoly and that the unquantified detriments were substantially outweighed by the net gains of a tie-up.
The court found the merger would restrict competition in four of the six markets tested, being the reader markets for online national news and Sunday newspapers, and in both the readers' and advertisers' markets for community newspapers in the North Island. It didn't uphold the commission's view that the advertisers' markets for Sunday newspapers faced reduced competition and dismissed the prospect of a paywall being introduced.
The court indicated the commission was entitled to costs.
NZME chief executive Michael Boggs said he was disappointed with the decision and that the company is reviewing the judgment, including the option to appeal.