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In an extremely challenging market for television broadcasters, New Zealand's largest paid satellite television broadcaster has taken proactive action and brought numerous actions against third parties for copyright infringement. As a result, "media law" remains an interesting, topical and developing area in New Zealand.
Fairfax-NZME Attempted Merger
The attempted merger between Fairfax New Zealand Ltd (Fairfax) and NZME Ltd (NZME) involved New Zealand's two largest newspaper publishers and online news sites. Fairfax owns and operates various national and regional newspapers and websites, including Stuff.co.nz (a news website with a monthly reach of approximately 3.5 million New Zealanders).
NZME is similarly one of New Zealand's largest news and media organisations, with a monthly reach of around 3.2 million people. It owns the country's most widely circulated newspaper, the New Zealand Herald (and its associated website), as well as major radio stations.
The parties first approached the NZCC with the merger proposal in 2016 seeking authorisation. When reviewing an authorisation application, the NZCC is required by the Commerce Act 1986 to take a two-step approach. The NZCC must first examine whether the merger, if successful, would substantially lessen competition in a particular market.
This analysis sees the NZCC compare the likely state of competition in that market if the merger proceeds against the likely state of competition in that market if the merger does not proceed. If the NZCC is satisfied that a substantial lessening of competition would not occur, it must grant clearance.
If not, it moves to consider whether or not the public benefits of the transaction (most commonly synergy/ efficiency benefits) would outweigh any detriments. If the NZCC is satisfied that the benefits outweigh detriments, then the NZCC must grant authorisation.
The NZCC ultimately rejected the application for the merger on the basis that:
The parties appealed the decision to the High Court, which substantively agreed with the NZCC's reasoning. In response to the argument that concerning itself with the plurality of New Zealand's media landscape fell outside the NZCC's jurisdiction (given "detriments" had previously been considered to mean detriments to competition, not broader non-competition issues), the High Court held that such concerns were justified due to the "material importance" of maintaining media plurality. The parties are appealing the Commission's finding to the Court of Appeal later in 2018.
Sky is New Zealand's largest provider of paid television services, and hosts a range of exclusive channels (such as movie and sports channels). As in other countries, it is a challenging time to be a provider of paid television services; and that challenge has been compounded by the arrival of Netflix in New Zealand.
The traditional paid television services model is under severe pressure, and there is significant disruption to the paid film, TV, and sports media space. Recognising that one of its key selling points is the exclusive rights it holds to various television content (such as sporting events, and certain films and TV shows), Sky Television has taken action against a number of third parties it considers have breached its copyright.
Action Against Individuals
In 2017, Sky took action against individuals who were caught streaming a boxing match. The match, a heavyweight title defence between New Zealander, Joseph Parker, and challenger Razvan Cojanu, was broadcasted exclusively on Sky on a pay-per-view basis.
Various individuals around New Zealand streamed this fight (for example, by setting up their mobile phone video cameras to create a live-stream of the fight to their personal Facebook pages). Following Sky's successful 2016 prosecution, of seven individuals caught streaming a boxing match between Joseph Parker and Alexander Dimitrenko, Sky was again successful in prosecuting a number of individuals for illegally streaming the fight. These individuals were fined almost NZD 3,000.
While the amounts fined may not be significant, Sky generated significant publicity with its approach and one would think it has put future potential infringers "on notice".
Action Against "Pirates"
Sky has also been involved in High Court proceedings against two businesses it says are selling hardware and software that allows individuals to illegally pirate Sky-exclusive content. The companies, My Box and FibreTV NZ, sell set-top devices containing programmes that allow users to stream licenced content (including content licenced to Sky).
In late 2017, Sky successfully obtained an interim injunction against FibreTV NZ that required the company to stop selling its devices (with a summary judgment hearing pending). Sky's court proceedings against My Box are ongoing, with My Box arguing that it cannot be held responsible for what consumers choose to do with the My Box technology they purchase.
Further, Sky has attempted to secure a site-blocking injunction against some of New Zealand's largest internet service providers (including Spark, Vodafon, Orcon, and 2Degrees). The injunction Sky seeks would essentially require internet service providers to block particular websites Sky has identified as assisting piracy, within 10 days of receiving notice to do so from Sky Television. This issue is ongoing, with internet service providers arguing that it represents censorship of the internet.
Action Against "Media"
Sky also recently initiated court action against four of New Zealand's media providers raising issues under New Zealand's Copyright Act and, specifically, the "fair dealing" exceptions to copyright in that legislation. This is a controversial issue as New Zealand undergoes copyright legislative reform, while the courts and businesses are still dealing with provisions enacted in 1994 that are not appropriate for the digital age.
Sky has objected to the use of short video footage of major sporting events exclusively broadcast on Sky (such as footage from the ICC Cricket World Cup and the Rugby World Cup, as well as the 2016 Olympic Games) in news broadcasts and online articles by TVNZ, Fairfax, Mediaworks and NZME-owned enterprises.
Sky argued that these media providers were unfairly profiting from Sky's exclusive licence to this content, and that their actions have resulted in a loss of Sky's subscribers and a downturn in advertising revenue.
In response, the media providers argued that the short video clips were used because they were showing newsworthy events, and that their use was permitted under the New Zealand Copyright Act's "fair dealing" exceptions to copyright (which provides that copyrighted footage may be used to report on current events). The case has yet to proceed to trial, and it is possible all parties will settle without any precedent being set. This, however, remains an area to watch.
The examples discussed in this article reflect the changing media law landscape in New Zealand. News, media, and broadcasting companies, facing an increasingly fragmented and cannibalised market, are attempting to secure their future survival and carve out strategies to grow.
2018/ 2019 is likely to see further developments in this area.
Media Law Updates from New Zealand
It has been a busy time for New Zealand's media agencies and regulators, and there have been significant developments in the country’s media law landscape. 2016 saw New Zealand's two largest newspaper publishers attempt to merge, only for issues to be raised by national competition regulator, the Commerce Commission (NZCC), and subsequently by the High Court.
Rayhan Langdana is a Solicitor in Russell McVeagh's Litigation team. He has acted for some of New Zealand's leading companies, and has worked on a wide range of media law, privacy, and intellectual property issues.
Joe Edwards Joe Edwards is a Partner in Russell McVeagh's Litigation group, and heads the firm's Media, Marketing Law, and Intellectual Property team. He has extensive experience acting for some of New Zealand's largest domestic and multi-national companies on a diverse range of issues relating to media, privacy law, consumer law, and defamation issues. He also regularly presents on issues relating to media law, marketing, and intellectual property.