Court of Appeal rejects merger

The Court of Appeal has dismissed NZME and Fairfax’s (now Stuff) long-running appeal against the Commerce Commission’s decision to decline their media merger.
 
The Court’s ruling upheld the earlier High Court judgment that supported the Commission’s May 2017 decision that the merger would be likely to substantially lessen competition in advertising and reader markets in New Zealand, and that it should not be authorised as it did not create benefits that outweighed this lessening of competition. The Commission considered that the merger would concentrate New Zealand news media ownership and influence to an unprecedented extent for a well-established modern liberal democracy.
 
Commission Deputy Chair Sue Begg welcomed the Court’s ruling. “We are pleased the Court has again upheld our decision and look forward to reviewing the judgment.”
 
In May 2016, Fairfax and NZME sought authorisation to merge their New Zealand operations. The Commission declined the merger in May 2017 and the High Court in Wellington upheld the Commission’s decision in December 2017. The appellants have 20 working days to seek leave from the Supreme Court to bring a final appeal.
 
NZME chief executive Michael Boggs expressed disappointment the Courts didn’t share the company’s view that the merger would work in the best interests of both its shareholders, and the New Zealand media industry as a whole. He said that, during the appeal process, NZME had focused on growing audience and engagement, returning advertising revenue to growth and growing new revenue streams including the OneRoof platform and paid digital subscriptions on nzherald.co.nz.
 
Likewise, on its web site, Stuff chief executive Sinead Boucher told staff in an email, “The process has spanned more than two years, and in the meantime we have forged ahead with our own strategy of growing our Stuff and Neighbourly platforms, and new digital ventures, complemented by a strong portfolio of newspapers and magazines.”.
 
The Court has awarded costs to the Commission.
 
Click here to see the full judgment