WELLINGTON, Nov. 8 (Xinhua) -- New Zealand's monopolies watchdog on Tuesday signalled it would likely reject a merger of two of the country's biggest media firms.
The Commerce Commission issued a draft determination on the application by NZME and Fairfax, the country's two biggest print news companies, to merge their media operations.
The proposed merger would bring together the newspaper networks and two largest news websites and a radio network.
The commission said the merger would be likely to substantially lessen competition in a number of markets, including premium digital and newspaper advertising, as well as increase subscription and retail prices.
The merger would result in one media outlet controlling almost 90 percent of New Zealand's print media market, the second-highest level of print media ownership in the world after China, commission chairman Mark Berry said in a statement.
The merged entity would also control New Zealand's two largest news websites, which together had a population reach more than four times larger than the next biggest domestic news website, and own one of the two largest commercial radio companies.
Together this would form a potential "single editorial voice."
"NZME and Fairfax each play a substantial role in influencing New Zealand's news agenda. Competition between the parties drives content creation, increases the volume and variety of news available in New Zealand and assists with objectivity and accuracy in reporting," said Berry.
"Our view is that the removal of this competitive tension would likely lead to a reduction in the quality and quantity of New Zealand news content both online and in print, with potential flow-on effects in television and radio."
The main opposition Labour Party and journalists union E tu welcomed the preliminary finding.
"We acknowledge the challenges facing the print media, but again agree that the downside of concentration of media ownership of 90 percent of the print media by one entity outweighs other matters," Labour broadcasting spokesperson Clare Curran said in a statement.
NZME and Fairfax, both owned by Australian parent companies, filed their merger application in May.
Fairfax operates the largest print media network in New Zealand, with nine daily and three weekly newspapers, 61 community publications, 10 magazine titles and six websites.
NZME owns eight daily and two weekly newspapers, 24 community publications, six magazine titles, 10 radio stations and 38 websites.
NZME and Fairfax are also joint venture owners, with state-owned commercial broadcaster TVNZ and private broadcaster MediaWorks, in KPEX Ltd., an advertising exchange to sell digital advertising inventory.
Both companies have suffered in recent years from competition with new media and the decline of traditional newspapers, which has seen advertising revenues steadily diminish.
