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ACCC’s role in the changing media landscape

Recent reforms to media ownership laws are likely to result in many new merger proposals across Australian media companies, and media diversity will be a fascinating issue, ACCC Chairman Rod Sims said today.

Speaking at a CAMLA event in Sydney, Mr Sims says the ACCC must assess any potential merger under the substantial lessening of competition [SLC] test, regardless of the sector.

“In the media context, the quality and range of diversity or supply of news are important factors we consider as outcomes of competitive rivalry, but they are not standalone considerations,” Mr Sims said.

The ACCC’s approach in this area is set out in its updated Media Merger Guidelines, which explore various competition issues associated with mergers that reduce the number of rivals, the role of premium content, and the impact of technological change and media innovation. The guidelines were last updated in 2006.

“The media landscape in Australia has completely and irrevocably changed since we last issued our media merger guidelines in 2006. We want to ensure that as an agency, the ACCC continues to keep pace with the rapidly evolving media market when considering these matters,” Mr Sims said.

Mr Sims also spoke of the impact that digital platforms like Google and Facebook are having in driving technological and cultural change and the companies’ impact on the market, particularly in relation to the digital advertising market.

“We are in a period of transformation of the media sector and there is a growing concern that the market position of Facebook and Google is significantly affecting online advertising revenue for traditional media,” Mr Sims said.

“We are aware of the concerns in the industry about the ability for traditional media to keep local newsrooms running and journalists producing new content and to ensure we continue to have a range of diverse voices making up the Australian media landscape. There could well be a market failure here and it’s something we are keen to take a look at if asked to do so.”

Mr Sims also discussed a range of issues arising from the ACCC’s communications sector market study draft report, released yesterday.