Rupert Murdoch’s 21st Century Fox takeover of Sky would be against the public interest, says Competition and Markets Authority (CMA)
An initial report from the competition watchdog has found the merger of Fox and Sky in its current form would result in the Murdoch family and too much influence over public opinion and news providers in the UK.
Rupert Murdoch’s 21st Century Fox plans to take control of the 61 per cent of shares it does not own in Sky.
Following a referral from the secretary of state for digital, culture, media and sport, the Competition and Markets Authority (CMA) had been investigating the proposed deal on two grounds: media plurality and commitment to broadcasting standards.
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The CMA said today it had provisionally found that Fox taking full control of Sky is not in the public interest due to media plurality concerns, “but not because of a lack of genuine commitment to meeting broadcasting standards in the UK”.
Anne Lambert, chair of the independent investigation group, said:
Media plurality goes to the heart of our democratic process. It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.
We have provisionally found that if the Fox/Sky merger went ahead as proposed, it would be against the public interest. It would result in the Murdoch family having too much control over news providers in the UK, and too much influence over public opinion and the political agenda.
Our in-depth investigation also considered whether the deal would be against the public interest regarding broadcasting standards. Due to their existing track record in the UK, and the range of policies and procedures the companies involved have in place to ensure broadcasting standards are met, we did not find public interest concerns in this regard.
Reasons why it’s not in the public interest
The CMA said if the deal went ahead as currently proposed, it would lead to the Murdoch Family Trust (MFT) – which controls Fox and News Corporation, increasing its control over Sky, so that it would have too much control over news providers in the UK across all media platforms. By extension, that would mean too much influence over public opinion and the political agenda.
The watchdog noted the MFT’s news outlets are watched, read or heard “by nearly a third of the UK’s population”, with a combined share of the public’s news consumption that is far greater than all other news providers, except the BBC and ITN.
What next?
The CMA has set out a series of potential options for addressing the problems identified and is open to “proposed possible remedies”.
It will review these, including other changes such as Fox’s sale of certain assets, including its interests in Sky, to Disney ahead of the finalised report which will be provided to the secretary of state by 1 May. He will then make the final decision on the proposed deal.
Fox said it was “disappointed by the CMA’s provisional findings” regarding plurality and that it will continue to engage with the watchdog ahead of the final report in May. It said it expects regulatory approval of the deal by 30 June.
In a statement Sky said: “Sky notes the provisional view of the CMA, that the transaction is not likely to operate against the public interest on broadcasting standards grounds.
“Sky also notes the CMA’s provisional view that the Transaction may be expected to operate against the public interest on media plurality grounds, but, at the same time, that the CMA has set out possible remedies relating to these concerns, and is seeking submissions on these.”
The firm said it would make a further announcement “as and when appropriate”.
Sky shares rose nearly three per cent in early trading.
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