New Zealand court rejects media merger appeal

WELLINGTON: New Zealand’s High Court on Tuesday upheld the corporate watchdog’s decision to reject a merger between the country’s two largest media companies, saying it could pose a “meaningful” risk to democracy.
NZME and Fairfax NZ had appealed the Commerce Commission’s decision, arguing the body overstepped its authority in May this year when refusing to let the plan proceed.
The commission said the merger would concentrate media ownership to an extent that was unhealthy in a liberal democracy, creating a giant that would dominate print and online news.
Australian-owned Fairfax NZ publishes titles such as Wellington’s Dominion Post and the Christchurch Press, as well as running New Zealand’s most popular news website stuff.co.nz.
NZME owns the New Zealand Herald, which operates the country’s second-largest news website, and a string of radio stations.
The companies’ appeal said the regulator’s job was to examine financial and economic issues, not set policy on wide-ranging topics such as how media diversity could affect democracy.
The court dismissed the argument, saying the merger could pose a “meaningful” risk to democracy and the commission was entitled to consider this when making a decision.
“We agree with the Commission that a substantial loss of media plurality would be virtually irreplaceable,” the court said in a judgment released Tuesday.
Fairfax NZ’s Australian parent, Fairfax Media, said the decision was “disappointing.”
“While the merger brought synergies that would have sustained journalism at scale in New Zealand for many years, our New Zealand business has continued to implement its own strategy and shape a separate future,” Fairfax chief executive Greg Hywood added.
Both Fairfax and NZME have cut newsroom jobs in recent years as revenues fall across the media sector.
They said when unveiling the merger plan that it would help them compete for digital advertising against global giants such as Google and Facebook.