ACCC delays call on Seven-News deal in WA amid complaints over competition

The ACCC has again postponed a decision on Seven’s planned purchase of The Sunday Times and PerthNow from News Corp.

Seven West boss Tim Worner laid out the group’s defence of any claims the deal would dampen competition by saying the acquisition was necessary to help fend off new online rivals. (Jane Dempster/The Australian)

The ACCC has again postponed a decision on Seven West Media’s planned purchase of News Corporation’s The Sunday Times newspaper and PerthNow website after receiving complaints about a potential softening of the competitive environment in the WA media sector.

The competition watchdog delayed a decision last month as it sought more information from the parties to the deal, with its latest move more significant given it comes with a statement of issues that has the ACCC pondering the changing media landscape.

As first reported in The Australian, the deal will see Seven West — which owns The West Australian newspaper — expand its publication schedule to seven days a week through the addition of News’ once-a-week Sunday Times to its stable.

The two operations are the only major newspapers published in Perth.

Seven West (SWM) will also secure control of news website PerthNow.

It is believed the final sale price will be between $12 million and $15m.

The crux of the concerns for the ACCC is that the deal will see the combination of the two highest-circulating WA print newspapers and related online news sites, with the watchdog weighing the effect on both advertisers and readers.

“A number of interested parties have expressed concern about the reduction in competition and the impact this would have on quality and diversity of content. A number of advertisers have also raised concern about the loss of competition for advertising opportunities in the print newspapers,” ACCC chairman Rod Sims said.

“WAN and News appear to be each other’s closest competitors in print and online news in Western Australia. They compete strongly with each other to attract readers and advertisers.”

In a statement following the update, News Corp said it was “considering the issues raised” and would “respond in due course”.

The decision will test the ACCC’s view on the impact of burgeoning competition from global entities, with the likes of Google wading into media sector and other offshore alternatives more readily available.

“The ACCC is seeking to understand whether the competitive tension between WAN and News is a key factor in maintaining quality and diversity of content for readers, or whether the threat of readers shifting to alternatives, particularly alternative online news sites, will competitively constrain WAN after the acquisition,” Mr Sims said.

In announcing the deal in May, Seven West boss Tim Worner laid out the group’s defence of any claims the deal would dampen competition by saying the acquisition was necessary to help fend off new online rivals.

“This proposed acquisition will allow our company to be in a stronger position to compete with the increasing presence of global content and platform businesses in the delivery of news and information,” he said.

The firm also looked to allay potential ACCC worries about the competitive impact by saying the move to a seven day a week publishing schedule would benefit advertisers, while expansion of printing operations could also be on the cards.

The once a week publishing of The Sunday Times is also considered to be unsustainable and may factor into the ACCC’s decision.

In a statement of issues on the deal the ACCC said it was trying to ascertain whether competition will constrain print advertising pricing at The West Australian, with a particular focus on the impact for advertisers focused on an older demographic.

The ACCC has called for submissions on its statement of issues by August 18, with a final decision now slated for September 15.