Media company 21st Century Fox’s bid to take full control of European pay-television operator Sky is set to be referred to the UK competition regulator, it emerged today (Thursday).
Karen Bradley, the UK Secretary of State for Media, Culture and Sport, said that she was “minded to” refer to the deal to the Competition and Markets Authority (CMA) for a more detailed ‘phase two’ study that would take six months on the basis of concerns surrounding media plurality.
Following the study, the regulator will make a decision on whether to clear the deal, approve it with conditions, or block it. Bradley added that the government sees no material issues in the proposed deal and said that it would confirm its own decision, before the CMA reports back, on July 14.
Earlier this week, Fox received regulatory approval in the Republic of Ireland for its proposed takeover of Sky, a major sports broadcaster in Austria, Germany, Italy and the UK and Ireland. The deal has already been cleared by regulators in all of the markets in which Sky operates, apart from the UK.
Bradley was speaking following a three-month investigation by media regulator Ofcom into Fox’s bid to acquire the 61 per cent of the company it does not own.
“Ofcom’s report is unambiguous,” Bradley told the UK parliament. “The transaction raises public interest concerns as a result of the 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.”
However, Ofcom’s report itself concluded that there was no need for a phase two investigation by the CMA into whether the merged group would commit to the regulator’s broadcasting standards.
A separate fit-and-proper probe by Ofcom acknowledged “extremely serious and disturbing” allegations of sexual and racial harassment at Fox News in the US, but added that there was insufficient evidence to conclude that a Fox-owned Sky would not be fit and proper for a UK broadcasting licence.
“It seems clear that there were significant failings of the corporate culture at Fox News,” Ofcom said. “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. Our assessment finds that Sky would remain a fit-and-proper licence holder in the event of the merger.”