ACCC nod for Foxtel's acquisition of Austar

MUMBAI: Australia pay-TV company, Foxtel, has got the go-ahead from Australia Competition and Consumer Commission to acquire Australian telecommunications company Austar.

The ACCC decided not to oppose the merger between the two companies after the competition concerns arising out of the merger were satisfied. However, the final decision on merger hinges on the Federal Court order on 13 April.

"Foxtel’s proposed acquisition of Austar has recently been approved by the ACCC. This is an exciting time because bringing the two businesses together is likely to bring a number of benefits for all Australians. Subject to the approval by the Federal Court on 13th April, we anticipate that Foxtel will take ownership of Austar in late May. Until that time, it is business as usual for us. You can just sit back and relax and continue to enjoy your Austar service," ," the company said in a statement.

The merger was approved after Foxtel accepted court-enforceable undertakings which will prevent it from acquiring exclusive IPTV rights for a range of attractive television programme and movie content, including:

Linear channels supplied by independent content suppliers, including more than 60 linear channels that are currently broadcast by Foxtel and many more that are broadcast internationally;

Subscription Video on Demand (SVOD) rights to current or past seasons of television programs that form part of a linear channel supplied by an independent content supplier;

Movie linear channels (or movies for inclusion in a linear channel) from more than 50 per cent of the eight major movie studios or more than 50% of the eight specified independent movie studios;

SVOD rights to movies, except for an 18 month window in relation to the movie studios from which FoxTel is not prohibited from acquiring exclusive linear rights.

“The proposed acquisition would bring together the two main subscription TV industry players in Australia each with a substantial customer base and significant access to key content. This would in turn give Telstra, FOXTEL‘s largest shareholder, greater market power in regional fixed broadband and telephony markets,” ACCC chairman Rod Sims said.

“By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets. Taking into account the undertaking which has been offered by FoxTel, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition,” Sims said.

However, rival telecommunications company Optus has warned that the merger will have huge ramification as it will limit IPTV competition.

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