The New Zealand Commerce Commission (NZCC) has declined clearance for several proposed mergers and acquisitions in 2017.
To grant clearance on a proposed merger or acquisition, the NZCC must be satisfied that it would not be likely to substantially lessen competition in any New Zealand market. If there would be a substantial lessening of competition, but the NZCC is satisfied that the proposal would bring public benefits outweighing the adverse effect, the NZCC may decide to grant an authorisation.
The Sky TV-Vodafone NZ merger proposal was particularly high-profile, and might have had a dramatic effect on competition in the markets for broadband internet and mobile telecommunications. On 23 February 2017, the NZCC declined clearance.
The merged Sky-Vodafone entity could eventually have led to market foreclosure – perhaps unsurprisingly, given that the merged entity would have owned a substantial portion of NZ mobile and broadband markets, in addition to multiple cable networks and the broadcast rights for most major sports.
The NZCC was clearly influenced by the potential for the merged entity to use live sports content (perhaps in “bundles” with other products) to negatively affect its competitors.
On 3 March 2017, the NZCC also declined clearance for AON New Zealand’s proposal to acquire Fire Protection Inspection Services Limited, noting that the proposed merger would have led to a single company employing most sprinkler inspectors in NZ.
On 3 May 2017, the NZCC declined authorisation on a proposed merger between NZME and Fairfax media. The NZCC was influenced here by the proposed merger’s effects, including that it would result in a single media outlet having control of nearly 90% of the NZ print media market, with the potential for a reduction in news quality and diversity. Accordingly, the proposed merger would not be of sufficient public benefit to outweigh the substantial lessening of competition.