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BSkyB, Fox merger proposal referred to competition authorities

MUMBAI: UK’s culture secretary Karen Bradley has said that she is ‘minded to’ refer Fox’s proposed buying of Sky to UK competition authorities. There is concern by critics that 21st Century Fox having control of BskyB would give it too much influence and power in the UK media market.

Speaking in Parliament, Bradley noted that on the question of whether the merger gives rise to public interest concerns in relation to media plurality, Ofcom’s report was unambiguous. It concludes, “The transaction raises public interest concerns as a result of the risk of increased influence by members of the Murdoch Family Trust over the UK news agenda and the political process, with its unique presence on radio, television, in print and online. We consider that the plurality concerns may justify the secretary of state making a reference to the Competition and Markets Authority”.

“On the basis of Ofcom’s assessment, I confirm that I am minded-to refer to a Phase 2 investigation on the grounds of media plurality. The reasoning and evidence on which Ofcom’s recommendation is based are persuasive. The proposed entity would have the third largest total reach of any news provider – lower only than the BBC and ITN – and would, uniquely, span news coverage on television, radio, in newspapers and online.”

Ofcom’s report, she added, states that the proposed transaction would give the Murdoch Family Trust material influence over news providers with a significant presence across all key platforms.

This potentially raises public interest concerns because, in Ofcom’s view, the transaction may increase members of the Murdoch Family Trust’s ability to influence the overall news agenda and their ability to influence the political process and it may also result in the perception of increased influence.

“These are clear grounds whereby a referral to a Phase two investigation is warranted – so that is what I am minded-to do. There, is, however, a statutory process that I must follow. I am required by legislation to allow the parties the opportunity to make representations to me on this position before I reach a final decision. I will now do that and have given them until Friday 14 July to respond.”

However she also said that she is currently minded-not-to-refer to a Phase Two investigation in relation to a genuine commitment to broadcasting standards.

21st Century Fox responding to the statement said, “We are pleased that she is minded not to refer the proposed transaction to the CMA in respect of the commitment to broadcasting standards. While we welcome the Secretary of State’s decision on broadcasting standards, we are disappointed that she does not accept Ofcom’s recommendation stated in its report that “….the proposed undertakings offered by Fox to maintain the editorial independence of Sky News mitigate the media plurality concerns.”

“Separately, 21CF is pleased that Ofcom recognises that Sky, under full 21CF ownership, would remain a fit and proper holder of broadcast licenses.

“21CF will now make representations to the secretary of state regarding her provisional decision and Ofcom’s report, and will continue to work constructively with the UK authorities. In the event that the secretary of state makes a final decision to refer to the CMA, we would expect that the review would take at least 24 weeks. In such an event, the transaction is expected to close by June 30, 2018.”