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Fries queries ACCC Austar stance

July 28, 2011

By Colin Mann

Liberty Global president and chief executive Mike Fries has criticised the Australian Competition and Consumer Commission (ACCC) over its preliminary view that Foxtel’s proposed A$1.9 billion acquisition of regional pay-TV group Austar is anti-competitive

Fries, who is also Chairman of Austar, noted that Australia is the only market that does not consider pay and free-to-air television stations as direct rival. He told the Australian Financial Review that he was “puzzled” and “confused” by the ACCC statement which said the proposed Foxtel-Austar merger would risk limiting competition in the pay-TV, TV content and telecommunications markets

“Everywhere we operate, it is well accepted that free-to-air TV players compete head-to-head with pay-TV providers for content and for viewers,” he said. “In fact, the free-to-air networks in Australia have been advertising Freeview as a free-to-air direct alternative to pay TV for almost two years. Our recent sales and penetration figures reflect this. The regulator’s position on this is hard to understand, to say the least.”

Fries said he was confident that once the ACCC actually considered the material put in front of it, there would be “a reasonable result” .

The Gold Coast is the only region where both companies are in direct competition, with Foxtel focusing on capital cities and Western Australia, while Austar operates primarily in the remainder of regional Australia.

The ACCC’s preliminary view, outlined in a Statement of Issues paper, is that the merger would substantially lessen competition in pay-TV, the market for buying programmes and that for the supply of telecommunications products because Foxtel is half owned by Telstra. Foxtel chief executive Kim Williams says the telco is considering taking legal action against the ACCC if it is unsuccessful in overturning the regulator’s decision.

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