SYDNEY Australia's competition regulator will scrutinize the supply of content and advertising opportunities when it rules on takeovers in the nation's 21.1 billion Australian dollar, or $16 billion, media industry, it said Wednesday.
Graeme Samuel, chairman of the Australian Competition and Consumer Commission, issued takeover guidelines that it will apply when restrictions on takeovers end next year. The government is ending a 19-year ban that has stopped television owners like James Packer's Publishing & Broadcasting from buying a newspaper publisher like John Fairfax Holdings.
With lines between media forms blurring as television broadcasters expand on the Internet and print publishers stream audio and video through their Web sites, the regulator said it had to find new ways to decide if takeovers would reduce competition.
"In the past, the ACCC has regarded the media as four distinct products - free-to-air television, pay TV, radio and print," it said in a statement. "Convergence of technology means we can no longer take that view."
The regulator will instead assess how proposed combinations would change the number of advertising opportunities, limit the supply of news content for consumers and affect the acquisition of news and entertainment from content providers. It will examine whether consumers and advertisers have alternatives to the combined company.
"The ACCC will also consider whether a merged-media business could exercise market power by reducing the quality of the content it provides to consumers," the commission said.
It will also look at takeovers beyond newspapers, radio and television to prevent companies from dominating the Internet.
"If traditional media companies emerge as the dominant players in new media and control the key content, then the potential for emerging players to provide competition is at risk," the regulator said.
The government of Prime Minister John Howard plans to abolish so-called cross-media restrictions and allow companies to own three forms of media - newspapers, television and radio - in each major city, rather than the current limit of one. The changes must be ratified by parliament, where the government holds a majority in both houses.
A cap limiting overseas investors to owning 25 percent of a metropolitan newspaper publisher and 15 percent of a TV broadcaster will also be abolished.
To assure diversity of opinion, metropolitan areas will have to be served by at least five media companies, and regional areas by at least four, Communications Minister Helen Coonan said. The commission said it would take into account that the smaller, regional markets are more vulnerable to a lack of competition than large cities.
Lawmakers in the rural-based Nationals party, the junior partner in the ruling coalition, have voiced concerns that reforms may reduce the number of media serving regional Australia.
Treasurer Peter Costello will have to approve investments by overseas companies. The antitrust regulator has the power to block takeovers on competition grounds.
