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Concern over media plurality

Bradley ‘minded’ to refer Murdoch’s Sky bid to CMA

UK Culture Secretary Karen Bradley today gave a broad hint that Rupert Murdoch’s 21st Century Fox takeover of Sky will be referred to the competition watchdog.

21st Century Fox is part of a media empire which includes The Times, Sunday Times, The Sun and The Sun on Sunday.

The company owns 39% of satellite broadcaster Sky and Ms Bradley has asked regulator Ofcom to decide if the acquisition of the remaining shares is in the public interest.

It comes amid concerns over media plurality and broadcasting standards. Sky has 22 million customers across Europe.

The deal has been cleared by European Commission competition authorities.

Ms Bradley told the House of Commons today that the merger would increase the Murdoch family’s ability to influence the UK’s news agenda and political process.

This gave “clear grounds” to refer the deal to the Competition and Markets Authority and she told MPs she was “minded to” do so.

The parties can make representations until 14 July, when Ms Bradley will make a further decision.

A previous attempt by Mr Murdoch to buy out the rest of Sky was interrupted by the hacking scandal. He is now offering £11.7bn to seal the deal.

Fox argues that money it invests will benefit the UK’s creative industries.

Labour and the Liberal Democrats oppose the deal but after the hacking inquiry in 2011 Mr Murdoch split the broadcasting and film empire Fox from his newspaper interests News Corp.

In March Ms Bradley asked media watchdog Ofcom to consider whether there would be sufficient plurality of persons with control of the media enterprises; and whether the parties would have genuine commitment to the attainment in relation to broadcasting of standards objectives.

It provided its public interest report to Ms Bradley on 20 June. It found that the proposed transaction raises public interest concerns relating to media plurality.

It identifies a 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.

“Our report says that we consider that these concerns may justify a reference by the Secretary of State to the Competition and Markets Authority,” said Ofcom.

Fit and proper assessment

Ofcom also has an ongoing duty to be satisfied that broadcasting licensees are fit and proper holders of a licence. This means that it can assess a licensee at any time, on its own initiative, as well as being able to respond to concerns raised by third parties.

It announced on 6 March that it would assess Sky’s fitness and properness to hold broadcasting licences in the event of this change of control, and do so within the same timeframe as completing the public interest report.

Ofcom has considered allegations of sexual and racial harassment at Fox News that it says “are extremely serious and disturbing”.

Its report adds: “It seems clear that there were significant failings of the corporate culture at Fox News. In order to have a concern about fitness and properness, we would need to see evidence of misconduct in the parent company, Fox. However, we have no clear evidence that senior executives at Fox were aware of misconduct before it was escalated to them in July 2016, after which action was taken.

“We have concluded that the overall evidence available to date does not provide a reasonable basis for Ofcom to conclude that, if Sky were 100% owned and controlled by Fox, it would not be a fit and proper holder of broadcast licences. Our assessment finds that Sky would remain a fit and proper licence holder in the event of the merger.

“As fitness and properness is an ongoing duty, we can re-examine our position if new evidence comes to light.”

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