FTC clears acquisition of Hana by CJ cable unit

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FTC clears acquisition of Hana by CJ cable unit

After two years of review, the antitrust agency on Monday gave the green light to a CJ Group affiliate to acquire a major local cable company in South Gyeongsang, with conditions attached.

The move will allow CJ HelloVision, the nation’s leading cable TV distributor, to dominate the cable TV market in South Gyeongsang.

The Fair Trade Commission on Monday said it is allowing CJ HelloVision to own 100 percent stake in Hana Broadcasting System, which the conglomerate bought in December 2016 for 22.5 billion won ($), under several conditions.

CJ HelloVision will not be allowed the hike its service charges more than the inflation rate for the next two years. Also, it will not be allowed to deny group subscriptions or cancel such subscriptions, which would be considered forcing subscribers to pay higher fees.

Without specific reason, CJ HelloVision will not be allowed to reduce the number of channels it offers and must provide full information about the broadcasting offerings on its websites.

With the acquisition of Hana Broadcasting System, CJ HelloVision will be the dominant cable broadcast distributor in South Gyeongsang province, with a 53.63 percent market share. It will have a 21.98 percentage point gap with the region’s No. 2 cable provider.

In July 2016, the FTC denied a similar move by CJ HelloVision when it tried to buy out SK Broadband, the nation’s No. 2 IPTV service provider. Just seven months prior to the FTC decision at the time, CJ HelloVision was optimistic about the antitrust agency approval, albeit with conditions attached.

But the FTC raised concerns about a monopoly in some neighborhoods. The government estimated that CJ HelloVision would control market share of as little as 46.9 percent and as much as 76 percent through the merger nationwide.

The major difference came in the fact that the FTC deemed the competition concern would be limited to South Gyeongsang whereas the SK Broadband acquisition would have had an impact nationwide.

According to a government study, as of the first half of this year, cable TV accounts for 45.76 percent of total TV subscriptions, a drop of 1.04 percentage points compared to the first half of 2016.

On the flip side, IPTV’s market share has added 1.19 percentage points during the same period to account for 43.71 percent.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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