The Australian Competition and Consumer Commission's review of the merger began in October this year and commission chairman Rod Sims says the commission won’t oppose the merger after finding that 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.
“Foxtel and Fox Sports have a close and long-standing relationship, operating within the ownership of News and Telstra. Given News’ current interests in both Foxtel and Fox Sports, it would be unlikely that Fox Sports would be made available to competitors of Foxtel in the absence of the merger.”
And the merged entity will also enter a number of agreements with Telstra.
Sims says the ACCC considered how the merger would affect a number of different markets and took into account feedback from a range of market participants in reaching its decision.
“We focused on the acquisition of sporting content and concluded that the proposed merger was unlikely to substantially lessen competition in this market,” Sims notes.
The ACCC also considered the effect of the merger and related agreements on the supply of triple play bundles of voice, broadband, and audio visual content by broadband and mobile providers.
As part of the merger transaction, Telstra is appointed the exclusive telecommunications agent for Foxtel’s digital products, and Sims said an important consideration was that consumers “will still be able to access Foxtel’s digital products even if they acquire broadband or mobile services from Telstra’s competitors”.
“Also, generally, where triple play bundles are offered consumers still have to pay to acquire premium packages and there are alternative sources of content for other telecommunications suppliers wanting to offer triple play bundles.”
Commenting on the ACCC decision, Telstra said:”Telstra today welcomed the Australian Competition and Consumer Commission’s decision to clear the combination of Foxtel and Fox Sports into a new company.
“The transaction remains subject to the conclusion of definitive agreements and the satisfaction of certain other conditions.”