Social media no competition to journalism - ComCom

6:50 pm on 20 October 2017

Traditional media are not as threatened by social media as news managers say, the Commerce Commission says, and there's still demand for properly researched news.

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Photo: RNZ

The Commerce Commission is into day five of a hearing at the High Court in Wellington after it blocked a merger proposal last May that would have combined NZME with Fairfax New Zealand, which is now re-branded as Stuff.

If approved, the merger would create a vast media company comprising the New Zealand Herald, Dominion Post, The Press of Christchurch, Newstalk ZB and many other radio stations and provincial and weekly newspapers.

The Commerce Commission ruled the proposed merger would create an unprecedented concentration of newspapers in New Zealand, at a cost to democracy and to the New Zealand public.

In challenging this, counsel for NZME told a High Court hearing this week that the merger was needed because of competition from social media, which undermined its advertising revenue and readership.

Urgent steps were needed - the two companies had to unite to survive, the lawyers argued.

However, counsel for the Commerce Commission Jim Farmer QC challenged this view in his opening counter-submissions.

He argued new media such as Facebook and blogs were incapable of providing real competition for properly researched journalism.

"To think of a blog as news is an enormous insult to professional journalists who work hard in providing responsible and serious news in an age where we now have something called fake news and all the other noise that the internet produces," Mr Farmer said.

In contrast to this, Mr Farmer said, properly researched journalism was essential for society as a whole and people of all ages were still keen on getting real stories from established media.

"The news media play a vital role as a conduit of reliable information about what is happening in the world and as a way of holding power to account," he said.

"The public continues to rely on mainstream media for their news."

Mr Farmer said there needed to be competition for this vital social function performed by the media to work properly.

If the proposed merger went ahead, the combined company would control 90 percent of New Zealand's newspaper market and over half its radio market.

In their present state, the two chains produced as many news stories as the next three largest news organisations combined.

Maintaining this output would be helped if the two chains competed against each other, as they do now, especially in their online news services.

A loss of competition would lessen this.

NZME earlier cited RNZ and TVNZ as proof there would still be other voices in the media, even if the merger went ahead.

Mr Farmer will continue pressing his case on Monday and the whole hearing will be wrapped up next week.

Justice Robert Dobson is expected to reserve his decision.

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