Sky TV and Vodafone set out their grounds for taking on regulator over blocked merger

Sky TV and Vodafone have not given up on their proposed merger.

Sky TV and Vodafone have not given up on their proposed merger.

Sky TV and Vodafone will go to the High Court to argue the Commerce Commission got it wrong when it said their merger might substantially lessen competition.

Spark, which objected to the merger, said it might go into bat on the side of the commission.

Sky released details on Thursday of the grounds on which the companies plan to appeal the competition watchdog's refusal in February to clear their merger.

Commerce Commission Mark Berry blocks the Sky, Vodafone merger in February. Now the commission will have to go over its ...
KEVIN STENT/FAIRFAX NZ

Commerce Commission Mark Berry blocks the Sky, Vodafone merger in February. Now the commission will have to go over its reasoning again in the High Court.

Law firm Bell Gully, acting for Sky and Vodafone, said the regulator was wrong to think that Vodafone's rivals in the broadband and mobile markets might need access to Sky Sports to effectively compete against the merged firm.

READ MORE: Sky and Vodafone pressing ahead with merger appeal

The appeal claim said the commission misjudged a lot of incentives on the merged firm and failed to consider the prospects of the merged firm offering its programming to rival telecommunications providers on competitive terms.

A commission spokesman said it could not comment as the matter was before the court.

It is understood that if other parties, such as Spark, wanted to join the action on the side of the commission, that would likely be raised at a case management hearing late next month.

Some of the arguments set out in the eight-page amended notice of appeal filed by Bell Gully were redacted to "remove confidential information".

The commission failed to place sufficient weight on the benefits of the proposed merger, including the possibility that the merger would help Sky and Vodafone develop new products and achieve "dynamic efficiencies", the notice claimed.

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Sky and Vodafone also alleged the commission made errors in law.

The companies will ask the High Court to reverse the commission's decision to refuse clearance for their merger.

Spark spokesman Richard Llewellyn said its views on the merger had not changed.

The Commerce Commission's ruling left "very little room for doubt" about the harm the merger would cause to New Zealand consumers, he said.

Llewellyn said Spark would review the grounds on which Sky and Vodafone were making their appeal. "If there is a role Spark can play as an 'interested party' in supporting the court in this matter we will do so," he said.

Vodafone and Sky would not say how they might divide the costs of the appeal. Sky spokeswoman Kirsty Way said those costs would be "immaterial" compared to the costs of the proposed merger to date "and the potential benefit for shareholders".

Sky spent just over $13m progressing the planned merger in its financial year to June 2016.

 - Stuff

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