Australian Regulator Clears the Way for Foxtel-Austar Deal

SYDNEY: The Australian Competition and Consumer Commission (ACCC) has approved Foxtel’s proposed takeover of Austar United Communications, though several conditions have been imposed.

The conditions include that Foxtel is prevented from buying exclusive Internet TV rights for a range of TV and movie content, including from Nickelodeon and National Geographic channels. The conditions also prevent Foxtel from acquiring exclusive mobile rights to specified content where competitors also want to deliver the programming on mobile. The undertaking does not prevent Foxtel from acquiring exclusive rights in relation to individual sports.

“The proposed acquisition would bring together the two main subscription TV industry players in Australia each with a substantial customer base and significant access to key content,” said Rod Sims, the ACCC’s chairman. “This would in turn give Telstra, Foxtel’s largest shareholder, greater market power in regional fixed broadband and telephony markets.

“By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets…. Taking into account the undertaking which has been offered by Foxtel, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition.”

Sims added, “The proposed undertaking has been offered by Foxtel to address the harm to competition which is likely to arise as a result of the proposed acquisition.

“However it is not intended to resolve competition or structural issues that may already exist in the relevant markets and are unrelated to the proposed acquisition.”

He continued, “The ACCC remains alive to competition concerns in existing and emerging media markets. It will continue to consider these issues as part of its usual functions under the Competition and Consumer Act, including consideration of whether exclusive content arrangements have the purpose or effect of substantially lessening competition or involve a misuse of market power.”

“The ACCC will also continue to consider whether there is a need to advocate for regulatory intervention in these markets.”