Competing Views on Media Mergers: A Comparative Analysis of New Zealand Competition Law

Abstract

Recent merger activity and academic commentary has renewed public interest in the treatment of media mergers around the world. Yet, it is difficult to formulate robust competition policy for media mergers when there is a fierce divergence in views between businesses and regulators as to the current competitiveness of the media industry. This paper engages with this issue by examining two recent media mergers in New Zealand, the NZME/Fairfax and SKY/Vodafone mergers, which were controversially declined by the Commerce Commission. Through taking a comparative approach with United States antitrust law and how it was applied in the AT&T/Time Warner merger, the paper suggests there are weaknesses in the New Zealand competition law framework and how it is applied. These exacerbate already challenging conditions for New Zealand media firms, faced with tough competition from large international competitors, by limiting their ability to merge and seek economic efficiencies. The paper concludes that Government intervention is required to address these issues in competition policy.

Keywords: antitrust, AT&T, authorisation, clearance, Commerce Act 1986, competition law, Fairfax, media, mergers and acquisitions, NZME, post-Chicago, SKY, Vodafone

JEL Classification: K00