Under the headline ACCC ‘wrong’ on Foxtel-Ten, the Australian newspaper has moved to defend their position while using the publication to lobby ACCC boss Rod Sim.
The competition watchdog has outlined “preliminary competition concerns” about Foxtel’s proposed acquisition of a stake in Ten Network, postponing its decision until next month. Now News Corporation is rallying the advertising industry to help them overcome concerns.
The main accusation levelled against the ACCC’s 22-page statement of issues is that the investment significantly overstates the power of a Foxtel-Ten merger, while underestimating the impact of overseas-based tech giants such as Google and Facebook, whose local operations are dramatically altering market dynamics by aggressively targeting TV advertising dollars.
News Corp claims that advertising executives representing more than $10 billion of media billings in the Australian market have strongly rejected claims by the competition watchdog that a sales alliance between Foxtel and Ten Network will ?lessen competition.
A survey by The Australian of the nation’s biggest media agencies, whose clients apportion more than 75 per cent of annual advertising expenditure, has found there is overwhelming opposition to the Australian Competition and Consumer Commission’s preliminary findings.
The regulator has outlined concerns the proposed acquisitions “may lessen competition” in the supply of advertising services, and result in increased prices for agencies and their clients – a suggestion denounced as “flawed” and “wrong” by agencies.
Agency chief executives expressed surprise at what they see as the ACCC’s narrow charac?terisation of today’s increasingly complicated media world, with some even suggesting it draws too heavily on submissions from complainants including Fairfax Media and Nine Entertainment Company. All the top agencies submitted evidence to the review.
The Australian said that for media agencies, the proposed acquisitions come at a time they are facing mounting pressure from corporations to deliver better prices or risk losing their advertising accounts altogether.
The advertising industry has seen accounts steadily whittled down in recent years as their clients try to offset slow growth in a tough economic environment with cost cuts. With many agencies, at the behest of clients, in an increasingly frugal mood, they want to see more competition in the TV advertising market, which is about one-third of the total Australian advertising market.
The ACCC has set a September 28 deadline for submissions and will announce a final decision on ?October 22.
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