CMA conditionally clears Getty Images-Shutterstock merger

(Sharecast News) - The Competition and Markets Authority conditionally cleared Getty Images' merger with Shutterstock on Friday, after concluding that the deal can proceed if Shutterstock sells its global editorial business to a suitable buyer.

The CMA's independent inquiry group found that the merger did not raise competition concerns in the global supply of stock content, but said it would reduce competition in the supply of editorial content to UK media outlets.

Editorial content includes images and video of news events, sport, celebrities and landmarks.

The CMA said UK media customers need both global and UK-specific editorial material, and that Shutterstock is one of the few meaningful alternatives to Getty, the market leader in the UK.

The regulator said the loss of competition between Getty and Shutterstock could reduce choice for UK media organisations and lead to higher prices, with possible knock-on effects for consumers who rely on high-quality editorial content to stay informed.

"Editorial images, which cover everything from red carpet and celebrity images to pictures and videos of sports or major breaking news events, are used every day by media outlets, publishers and filmmakers to bring stories to life for UK audiences," said Margot Daly, chair of the independent inquiry group.

"Any loss of competition could be strongly felt by these customers."

The CMA said its concerns would be addressed by the sale of Shutterstock's global editorial business, which operates under the Shutterstock Editorial, Backgrid and Splash brands and competes with Getty across live and archive news, sport and entertainment content.

"This deal can proceed if the businesses sell Shutterstock's editorial business to a suitable buyer to ensure that UK media outlets and their customers aren't worse off as a result," Daly said.

"We will continue to work with Getty and Shutterstock throughout any sales process."

Getty and Shutterstock had first offered to sell Shutterstock's entire global editorial business at the end of the CMA's phase one investigation, describing it as peripheral to Shutterstock's core operations.

At that stage, the CMA said the remedy did not address all of its concerns, including those relating to stock content, and referred the deal for a phase two review.

After the CMA published its interim report in February, the companies proposed a narrower sale limited to Shutterstock's Backgrid and Splash celebrity entertainment businesses.

The inquiry group rejected that proposal, saying it would not restore the competition currently provided by Shutterstock's broader editorial business.

The CMA said no third party told it the reduced remedy would be effective.

The merger can proceed once the sale of Shutterstock's editorial business is completed to a CMA-approved purchaser.

Getty and Shutterstock said the deal would generate annual cost synergies of $150m to $200m.

Reporting by Josh White for Sharecast.com.