Australia: Media sector consolidation and the ACCC

The changes to the media diversity rules

On 16 October 2017, the Broadcasting Legislation Amendment (Broadcasting Reform) Act 2017 (Cth) was enacted to amend Australia's media cross-ownership rules, also known as the 'diversity rules'. Relevantly, the Act repealed the '2 out of 3' rule and '75% reach' rule with effect from 17 October 2017. Three media diversity rules still remain, as summarised below:

Name Rule Status
'2 out of 3' rule A person must not be in a position to exercise control over more than two out of the following three types of media platforms in any CRB licence area:

  • a commercial television broadcasting (CTVB) licence;
  • a commercial radio broadcasting (CRB) licence; or
  • an associated newspaper (essentially a significant local newspaper)
Repealed from 17 October 2017
'75% reach' rule A person, either in their own right or as a director of one or more companies, must not be able to exercise control of CTVB licences whose combined licence area population exceeds 75% of the Australian population. Repealed from 17 October 2017
'One-to-a-market' rule A person, either in their own right or as a director of one or more companies, must not be able to exercise control over more than one CTVB licence in a C licence area. Still exists
'Two-to-a-market' rule A person, either in their own right or as a director of one or more companies, must not be able to exercise control over more than two CRB licences in the same CRB licence area. Still exists
'4/5' rule (also known as the 'minimum voices' rule) Under a complex points-based system, at least five independent media 'voices' must exist in a metropolitan CRB licence area and at least four 'voices' must exist in a regional CRB licence area. If there are already less than the minimum number of 'voices', then the number of 'voices' cannot be further reduced. The metropolitan CRB licence areas are the mainland state capital cities. A 'voice' is a CTVB licence, CRB licence, an associated newspaper, or a group of two or more media operations. Still exists

The repeal of the '75% reach' rule will allow consolidation of control between metropolitan and regional broadcasters. The rule historically prevented the owners or controllers of any one of the major metropolitan commercial networks (Seven, Nine and Ten) from gaining control of (or merging with) any one of the regional commercial networks (Prime, WIN and Southern Cross Austereo). Following repeal of the rule, such consolidation may now occur.

The repeal of the '2 out of 3' rule will allow a person that controls two regulated media platforms in a licence area to acquire control of additional regulated platforms in the same licence area. For example, Fairfax Media could not historically control a commercial television licence in Sydney or Melbourne unless it divested its commercial radio or associated newspaper in the relevant licence area. However, in most licence areas, no single entity controls media assets from two of the three regulated platforms so repeal of this rule may have little practical impact.

The elevated role of the ACCC

The Australian Competition and Consumer Commission (ACCC) has always been a gatekeeper for media sector consolidation. The merger rule in section 50 of the Competition and Consumer Act 2010 (Cth) applies to all sectors of the economy to protect against excessive concentration of market power. Media sector acquisitions continue to be prohibited if they have the effect, or are likely to have the effect, of substantially lessening competition in any Australian market.

In practical effect, the relaxation of the media diversity rules has elevated the role of the ACCC. Some consolidations that were historically prevented by the '75% reach' and '2 out of 3' rules are now permissible. The ACCC has recently released updated Media Merger Guidelines (Guidelines) which outline the ACCC's approach to media mergers and highlight key issues. The Guidelines update the previous version, dating from 2006, and supplement the ACCC's standard merger guidelines.

In the Guidelines, the ACCC identifies that common areas of competitive overlap in the media sector typically involve one or more of the following activities:

  • the supply of content to consumers, either directly or via a firm which acquires and aggregates content for supply to consumers;
  • the supply of advertising opportunities to advertisers; and/or
  • the acquisition of content from content providers.

The ACCC defines the relevant markets in light of these core activities by considering the extent of substitution, consistent with its usual approach. In doing so, the ACCC will consider substitution between modes of delivery (such as print, radio broadcasting, free-to-air television broadcasting, digital media platforms, and over-the-top video streaming) as well as the extent of convergence between those modes. The ACCC will also consider substitution between different types of content or advertising opportunities (such as sport, entertainment, and quality news content).

Within these markets, the ACCC will consider potential adverse effects arising from any reduction in competition to develop a 'theory of harm'. Consistent with the ACCC's standard merger guidelines, the ACCC will focus on unilateral effects (such as price rises, reduced service quality, and reduced incentive to innovate) and co-ordinated effects (such as greater risk of price co-ordination). It is within this general framework that the ACCC will focus on bespoke issues that tend to be more prominent in media mergers than in other mergers.

Potential ACCC concerns with media mergers

In the Guidelines, the ACCC has identified five key issues to which it may attribute greater prominence in media merger assessments. Where concerns arise, the ACCC will normally be receptive to the parties offering a remedy, usually by way of court-enforceable undertaking:

  1. Competition and media diversity

    The ACCC views media diversity through the prism of market concentration and competition. A merger that increases market concentration will reduce the number of 'voices', reduce choice for consumers and potentially reduce quality of content, thereby reducing media diversity. In a media context, the ACCC will therefore be concerned not only with adverse price impacts of a merger, but also on non-price impacts, particularly any adverse impacts on the quality of content for consumers.

    A recurrent issue will be the way the ACCC assesses mergers involving different modes of content delivery. In clearing the proposed joint bid for interests in Ten Network Holdings Limited by Birke Pty Ltd and Illyria Nominees Television Pty Ltd in July 2017, the ACCC considered convergence between different modes of content delivery, but did not form a concluded view as to whether free to air TV, print newspapers and online news sites were in the same or separate product markets. The converging nature of different modes of content delivery is clearly a difficult issue that the ACCC will face in considering future mergers.

  2. Impact of technological change

    The media sector is inherently dynamic. The ACCC will assess media mergers in light of potential changes over the foreseeable future (typically one or two years). In doing so, the ACCC may consider the scope for technological convergence in that time frame as well as market innovations that may facilitate competitive entry. However, the ACCC will require credible evidence that such changes will occur and will give little weight to mere speculation.

    Similarly, the ACCC will consider the disruptive effects of new technologies. The ACCC may give disproportionate weight to new market entrants with low market shares if there is credible evidence that such firms will quickly become vigorous and effective competitors. In doing so, the ACCC may look at international trends and examples.

    While digital disruption has been viewed as a key driver of competition, the mere presence of digital competitors may not resolve all ACCC concerns. For example, the proposed merger between APN Outdoor and oOh!media was abandoned after the ACCC expressed concerns about impact on competition in the out-of-home advertising market. The ACCC considered that online platforms were not a substitute for traditional billboards, in respect of the supply of advertising opportunities to advertisers.

  3. Access to key content

    The ACCC has historically considered that insufficient access to premium or compelling content can be a barrier to entry. Such premium content can have a 'halo' effect and attract significant numbers of customers. Consequently, such content may be subject to exclusive supply arrangements that favour larger providers with deeper pockets at the expense of smaller market entrants.

    In considering mergers, the ACCC will consider the extent to which the merger may prevent third party competitors from acquiring access to key content, thereby reducing competition. This is not a new consideration for the ACCC. For example, to be permitted to proceed with its purchase of Austar in 2012, Foxtel provided an undertaking to address ACCC concerns about access to exclusive content.

    The ACCC will also consider the way content holders may have countervailing power such that they may choose alternate platforms for their content.

  4. Two-sided markets and network effects

    A two-sided market is one in which a platform or intermediary brings together two distinct groups of users which interact with each other. Two-sided markets often arise in the context of services which generate revenue through advertising. Many Internet services involve two-sided platforms, often in the context of a free service. For example, Google provides a free 'search' function to consumers, but also sells advertising space to advertisers around the 'search' results to target those consumers.

    Network effects are present in a market if the value a user places on a product or service increases as the number of users of that product or service increases. For example, the benefit to an individual from using a social networking site increases if all their friends also use that site. Network effects can raise the barriers to entry and expansion, and impede effective competition from developing. In such cases, the 'winner takes all'.

    By raising barriers to entry, network effects may be important in assessing the competitive effects of some media mergers. The level of such barriers to entry may depend on the context. Platform-to-platform competition, for example, can sometimes be viewed as competition for the market rather than in the market if the network effects are sufficiently transient.

  5. Bundling and foreclosure

    Bundling (or tying) refers to the practice of supplying or offering to supply complementary products as a package. The practice of bundling may be efficient, and the ACCC is only concerned where these strategies are likely to have the effect of substantially lessening competition. Cross-platform media mergers may provide the merged entity with the opportunity to bundle or tie the supply of products or services, for example content or advertising opportunities, across multiple platforms

    The ACCC will also closely examine any media merger that enables the merged entity to leverage its market power in one market to substantially lessen competition in another market. For example, a vertical merger between a content supplier that produces premium content and a free-to-air network may raise competition concerns if rival networks or competitors on other platforms need access to premium content to compete effectively.


The reforms to the media diversity rules create new opportunities for consolidation in the Australian media sector. A key opportunity involves the potential consolidation of regional and metropolitan operations following the repeal of the '75% reach rule'.

Because of the reforms, the ACCC's role in media market mergers has become more important than has historically been the case. The ACCC has responded by updating its Guidelines. The Guidelines are sensible, but illustrate some of the complexities that the ACCC will face when assessing dynamic markets that are subject to continued innovation and convergence. Watch this space...

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions