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Spark says decision gives opposing parties time to consider options if competition watchdog approves tie-up.
New Zealand’s High Court on Wednesday ordered a brief delay to Vodafone’s merger with Sky Network Television in the event that the Commerce Commission approves the deal.
The decision is a victory for incumbent Spark and altnet 2degrees, which petitioned the court for the delay on Monday.
In its decision document, the court agreed with Spark’s assertion that if the Commerce Commission approves the deal, Vodafone and Sky can complete the transaction before the court has time to grant effective relief in the event that the Commission’s approval process is found to be flawed.
"The transactions have the potential to directly affect consumers in the markets affected by the Commission’s decision. There is therefore a significant degree of public interest in the outcome of the clearance decision," the court said.
Under the court’s ruling, Vodafone and Sky are prohibited from completing their merger until midnight on the third day after the Commission issues its decision, which is due on Thursday.
The delay will be extended if Spark or any other party applies for judicial review of the Commission’s decision during that period. If no application is made, then Vodafone and Sky will be free to merge once the court-ordered delay period expires.
"The stay is important for natural justice and fairness: as it will ensure all interested parties have a chance to properly consider the Commission’s reasoning and make informed decisions on whether to seek a judicial review if there is a clearance decision," said John Wesley-Smith, general manager of regulatory affairs at Spark.
"Without this stay, there was a risk that Sky and Vodafone would immediately take steps to implement the merger and make it a fait accompli – which would render any future legal review a meaningless exercise," he said.
The Commerce Commission is due to issue its decision on whether to approve the NZ$3.44 billion deal tomorrow.
Sky and Vodafone New Zealand agreed to merge in June 2016. Each company applied for merger clearance later that same month; both parties insisted that the residential broadband and pay TV markets would remain unharmed because Vodafone and Sky do not already compete with one another.
The Commerce Commission was initially due to issue a decision by 11 November. However, it was pushed back, reflecting lingering concerns about the implications for competition, and the large volume of submissions relating to the deal from multiple third parties.
"We and others believe the proposed merger will be bad for consumers – resulting in poorer choice and higher prices for consumers, especially when it comes to sports content. That was at the heart of our decision to take this Court action," said Wesley-Smith.
