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FTC reconfirms opposition to SKT’s bid for CJ HelloVision, citing competition concerns

19 Jul 2016

South Korea’s Fair Trade Commission (FTC) has reconfirmed that it will not give its approval for the controversial planned acquisition of cableco CJ HelloVision by SK Telecom, the Korea JoongAng Daily reports.

Speaking at a press briefing yesterday (18 July) Shin Young-sun, secretary general of the antitrust watchdog, explained the reasoning behind the decision, saying: ‘After reviewing SK Telecom’s acquisition of CJ HelloVision and merger between SK Broadband and CJ Hellovision, we concluded that the deal may effectively limit competition in the paid broadcasting market as well as the telecom retail and wholesale markets.’ Meanwhile, responding to questions over why the FTC had opted to oppose the merger, rather than demand a partial stake sale or impose a ban on the enlarged entity raising cable TV subscription rates, Shin argued that such measures would not be sufficient to limit the repercussions of the tie-up.

In response to the FTC’s latest announcement, SK Telecom said it would respect the decision, adding that it would ‘do its best to help the domestic media industry leap one step further in the global arena’. Nonetheless, the mobile market leader said it regretted that it had been unable to persuade the authorities to allow the transaction, adding: ‘Global media companies are waging ‘’borderless warfare’’ in the over-the-top content business [delivery of audio and video content over the internet], and changes and innovations are urgent when Korea cannot be an exception in the competition.’ SK Telecoms rivals have – as might be expected – proved happier with the ruling, with a joint statement issued by KT Corp and LG Uplus stating: ‘We greatly feared more monopoly in the broadcasting and telecom markets and the loss of consumer welfare caused by SK Telecom’s acquisition of CJ HelloVision … So we have been expressing the view that the M&A should be banned, and the FTC’s decision reflects this.’

South Korea, LG HelloVision, SK Telecom (SKT)

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