The competition watchdog’s recent decision to News Corp and Telstra’s proposed merger of Foxtel and Fox Sports the thumbs up has drawn the ire of three rival companies.
Under the merger, Foxtel and Fox Sports will be brought together under common ownership, with News holding 65 per cent of the merged entity. Telstra will hold the remaining 35 per cent interest. The merged entity will also enter a number of agreements with Telstra.
The Australian Competition & Consumer Commission (ACCC) gave the merger the green light last week after finding the commercial incentives of Foxtel, Fox Sports, News, and Telstra will not be substantially altered.
“Therefore, the change in ownership structure is unlikely to substantially lessen competition,” ACCC chairman Rod Sims said.
However, rival companies Fetch (which has partnerships with Optus, iiNet, Dodo and iPrimus) Vodafone (which has a partnership with streaming service Stan) and Optus made the ACCC well aware of their issues with the deal, and were perplexed by the competition watchdog’s decision-making process, according to The Australian Financial Review.
Fetch CEO Scott Lorson said a statement of issues and further public inquiry into the Foxtel-Fox Sports merger was warranted, given the coalition it would form between News Corp and Telstra.
“We see [last week’s] decision as a missed opportunity by the ACCC to utilise the Section 50 review process to easily address industry concerns,” Lorson said.
“Focus will now shift exclusively to Section 46 as the last line of defence in the event of anti-competitive behaviour.”
Section 46 is concerned with the misuse of market power.
An Optus spokesperson told the AFR that the telco questioned whether it was a missed opportunity for the ACCC to review broader competition implications from the merger, given its long-standing concerns about the Telstra-Foxtel relationship.
Vodafone Hutchison Australia chief strategy officer Dan Lloyd said the company was surprised by the ACCC’s reasoning for its decision on the merger, as it assumes Foxtel content would always be exclusive to Telstra.
“This is a substantial extension of the exclusive tie-ups between Australia’s dominant premium content, premium sports rights and telco players and can only reduce choice for Australian consumers,” Lloyd told the AFR.
“Once again, dominant players are allowed to stitch up side deals which tilt the playing field overwhelmingly in their favour.”