Media firms appeal decision

Media companies Fairfax New Zealand and NZME are appealing the Commerce Commission’s decision this month to block their proposed merger. The companies announced they would go to the High Court yesterday morning, saying the commission had made errors with facts and law.

Fairfax NZ acting managing director Andrew Boyle said the commission’s ruling was a ‘‘breach of natural justice and procedural fairness’’.

He said the appeal process would ‘‘take some time’’.

NZME said in a statement to the NZX that it had carefully reviewed the commission’s ruling. It set out the grounds for the appeal in a 12-page document.

A key issue in the appeal will be whether the commission overstepped its remit by basing its decision on the impact the merger would have on media diversity (plurality).

Law firm Russell McVeagh, acting for the media firms, said the watchdog was an ‘‘economic regulator’’.

Even if the commission was allowed to have regard to ‘‘social and political considerations’’, it had got its assessment of the impact of the merger wrong, it said. The companies complained about ’’procedural’’ issues with the commission’s ruling. They said the commission acted unfairly by giving too much ‘‘anonymity and confidentiality’’ to parties that submitted against the merger.

The watchdog gave Fairfax and NZME too little time to respond to its assessment of what would likely happen if the merger did not proceed, setting out its thoughts in March – just three weeks before the then due-date for the ruling, they said.

The media firms will also argue the commission defined the markets in which the merged company would compete too narrowly, failing to take into account the competition it would face from online competitors.

The commission also underplayed the competition that would be provided by traditional rivals Television New Zealand, Radio NZ and MediaWorks, they said.

The notice of appeal said the watchdog was wrong to believe it was likely the merged firm would introduce a paywall for online news, while adding it didn’t properly assess the benefits that could follow if that did indeed happen.

A Commerce Commission spokesman said it could not comment on matters that were before the court.