She pointed to “the impact of Facebook and Google on the financial viability of news and journalism in Australia”, the subject of the ACCC’s landmark digital platforms inquiry.
“Broadly speaking, conduct would need to have the purpose, effect or likely effect of substantially lessening competition in a market for it to raise concerns under competition laws,” the spokeswoman said.
ACCC chair Rod Sims told The Australian the watchdog was “having a look” at the closure but, noting it was a decision by majority shareholders, said it was “not easy to show there’s been a breach of law by closing down a business they own”.
James Chessell, executive editor of The Sydney Morning Herald and The Age, told staff on Wednesday the economics of the newswire had become “seriously challenged” as media outlets cut back their subscriptions and people accessed content for free online.
“This meant AAP’s shareholders effectively subsidised those remaining organisations who subscribed to the newswire’s journalism,” Mr Chessell said.
AAP produces a broad range of news content that is syndicated by international and local media, with strong demand for its on-the-ground breaking news reporting and photography.
About 600 employees stand to lose their jobs. Nine and News Corp have signalled some jobs will be created at their organisations with the money previously invested in the newswire.
Industry sources told the Herald and the Age AAP chief executive Bruce Davidson had suggested bringing in new investors to save the newswire but the idea was rejected by existing shareholders. The board had been weighing up closure for some months before announcing the move.
On Thursday, Media, Entertainment and Arts Alliance official Marcus Strom said there appeared to be a “sinister motive” in shutting down AAP. Mr Strom said it seemed Nine and News Corp wanted to “deliberately harm their print and online rivals who subscribe to AAP” and questioned why the major shareholders didn’t try to sell the newswire instead of shutting it down.
AAP chairman and News Corp executive Campbell Reid said on Thursday creative industries were being “eaten alive by tech platforms profiting from other people’s content” and criticised the journalists’ union for its statement.
Mr Reid also criticised The Guardian for “gob-smacking hypocrisy” in reporting that Nine and News Corp were seeking to punish smaller outlets.
“It is one of the very companies that slashed the amount it was prepared to pay for AAP. It is one of the organisations whose decisions have contributed to the closure of AAP and it and the MEAA’s leadership should confront the bigger, tectonic forces our entire industry faces rather than trot out this arrant nonsense,” he said.
Fergus Hunter is an education and communications reporter for The Sydney Morning Herald and The Age.