ACCC to probe News' purchase of ARM regional titles

AUSTRALIA'S competition and consumer watchdog has delayed a decision on News Corp's $36.6 million purchase of APN Australia's regional newspapers in Queensland and NSW.

The Australian Competition and Consumer Commission said the proposed acquisition would combine the two main newspaper publishers in Queensland.

Under the deal, ARM's community and regional publications in Queensland and northern New South Wales would be added to News' extensive portfolio of community, regional, state, and national publications.

"The ACCC is investigating the effect that this would have on competition for both readers and advertisers.

"One area of focus is the loss of competition between ARM's paid regional newspapers and News' The Courier Mail.

"If the proposed acquisition proceeds, News will own both The Courier Mail and the local paid newspaper in nearly every city or town in Queensland.

"This may result in a reduction of quality and diversity of content available to readers.

"Reinforcing that concern is that both News and ARM have a strong presence in online news through their websites associated with the Queensland newspapers," ACCC Chairman Rod Sims said.

"The ACCC is seeking to understand whether the competitive tension between News and ARM is an important factor in maintaining quality and range of content, or whether the threat of readers shifting to alternatives, particularly alternative online news sites, will competitively constrain News after the acquisition."

ARM publishes paid daily regional papers in Mackay, Rockhampton, Gladstone, Bundaberg, Hervey Bay, Gympie, Sunshine Coast, Toowoomba, Ipswich and Warwick.

The ACCC will be looking closely at these areas.

"In particular the ACCC will test how important diversity of content and opinion is to readers when assessing the extent of competition between papers," Mr Sims said.

ARM and News both also publish overlapping community papers in Caboolture/Bribie Island, south west Brisbane, Brisbane northern bayside, Logan, and Tweed Heads/southern Gold Coast.

"These are mostly free papers with a strong local focus. The ACCC is seeking to assess the effect on readers and local advertisers in those areas, and to assess whether the reduction in competition is significant.

"The ACCC will be assessing the importance of diversity of local content in these competing community publications. 

"The ACCC is also seeking to understand whether advertising opportunities on other media platforms, such as local radio, pamphlets, and online, will constrain prices for advertising in the ARM and News community newspapers," Mr Sims said.

The ACCC invites further submissions from industry participants in response to the Statement of Issues by 27 October 2016.

APN News and Media released a statement to the market saying it will "adjust its timeline for the completion of the sale of ARM". 

"APN continues to cooperate with the ACCC and is confident the issues raised can be addressed. APN strongly believes that regional media consolidation is required to help secure the future of regional newspapers in a constantly evolving media landscape," the company said through a market announcement. 

News Corp said it was "giving the statement of issues proper consideration". The company looks forward to working through the issues with the ACCC, it said.

Submissions should be forwarded electronically (preferably in PDF format) to with the title Submission re News/ARM proposed acquisition (attention Lisa Campbell/David Wang).

Alternatively submissions may be forwarded by fax to 02 92315652 or by mail to Mergers Branch, ACCC, GPO Box 3648, Sydney NSW 2001.

The ACCC expects to announce its final decision on 1 December 2016.

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