Media24 (with Paarl Coldset) has been allowed to take over the Natal Witness, subject to a flotilla of conditions aimed at ensuring that Media24 is not able to exclude small community newspaper publishers from accessing printing capacity. Chris Charter gives a legal opinion.
The theory of harm was predicated on the notion that Media24’s control of Natal Witness, a large publishing house, may skew Media24’s competitive incentives towards the larger publishing business at the expense of its smaller printing business. This may lead it to discriminate in favour of Natal Witness when it came to printing, thus making it difficult for smaller publishers to remain competitive.
This concern related to competition, but also to the plight of small businesses, a public interest factor close to the regulator’s heart.
The focus on small businesses is perhaps an attempt to exclude Caxton from the remedies. Caxton intervened in the merger (and not for the first time in media mergers) but did not escape unscathed as it is implicated in veiled allegations of market division and co-ordination, which the Tribunal saw fit to mention but not explore fully.
The Tribunal imposed the following conditions:
· An investment in Media24’s printing business to maintain its current printing capacity and the installation of additional printing capacity at Natal Witness.
· Access by small, independent publishers to printing services at certain maximum prices and other conditions of supply.
· The separate governance of the merged entity’s community newspaper publishing and printing businesses in the relevant geographic areas so that strategic decisions on the publishing side do not drive the printing decisions.
· The future notification by Media24 of all ‘small’ mergers relating to community newspaper publishing and printing in the relevant geographic areas.
· Continued support by the merged entity of the Media Development and Diversity Agency (MDDA) that provides non-financial and limited financial support to small community newspaper publishers.
The conditions imposed are certainly among the most onerous imposed on merging parties and will clearly impact Media24’s strategy for some time to come, indicating that the Tribunal will not be shy in future to impose conditions that meaningfully restrict the conduct of the post-merger business.
Chris Charter is director, Competition, at Cliffe Dekker Hofmeyr
