Published: Thu, September 14, 2017
Culture | By Marion Pratt

Fox's Sky bid set to be referred to competition watchdog over standards

Fox's Sky bid set to be referred to competition watchdog over standards

However, after requesting fresh evidence from the media watchdog Ofcom, Ms Bradley today told MPs that she was also minded to ask the CMA to investigate whether the deal raised concerns over broadcasting standards.

In a blow to Fox's plans, Britain's culture minister on Tuesday signaled she was leaning toward asking the Competition and Markets Authority to more closely scrutinize the acquisition. Ofcom is the regulator of record for broadcast standards, and it would be hard for the CMA to ignore its advice entirely.

The announcement made on Tuesday caused shares in Sky to plummet 5 percent.

An earlier attempt to buy the remaining shares was scuttled by the 2011 phone-hacking scandal that rocked Mr Murdoch's British newspapers and led him to close the 168-year-old News of the World. At issue is whether the deal gives the Murdochs, who control 21st Century Fox, too much influence over British media. "Extra reasons have been added as to why it is being referred to the CMA, such as broadcasting standards and corporate governance, but from a practical standpoint it doesn't hugely change things", said Liberum Capital's Ian Whittaker. At the time the Culture Secretary agreed.

Bradley said she was "not confident that weaknesses in Fox's corporate governance arrangements are incapable of affecting compliance in the broadcasting standards context".

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However, in a statement to the Commons on Tuesday she said that none of the representations she received had allayed her concerns. These, she said, were matters the CMA may wish to consider in the event of a referral.

Key to the decision was a perceived lack of procedures for broadcast compliance in the United Kingdom for Fox News, 21st century Fox's controversial and highly partisan news channel.

Sky said in a statement that it was "disappointed by this further delay", and pointed out that Bradley had overruled Ofcom's view as regards broadcasting standards.

Ofcom said Fox's record of compliance with the United Kingdom broadcasting code had been "good" and that overseas broadcasts were not relevant. Under the Enterprise Act she has discretionary powers to disregard the regulator's advice. That scrutiny followed several resignations at Fox News over allegations of sexual harassment, as well as a lawsuit alleging that the network worked with the Trump administration to push a conspiracy theory about a murdered Democratic National Committee staffer.

But Bradley, who has remained United Kingdom culture secretary in May's new government, has been seen as being under pressure to not wave the deal through given that the topic of the Murdochs and their political power has been a hotly discussed topic in Britain.

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"I have given the parties 10 working days to respond".

The CMA would have up to six months to review the deal. "The new investigation into the Murdochs" bid for Sky TV is a "golden opportunity' to uncover new evidence against the Sky takeover", said campaign group Avaaz, which had threatened Bradley with legal action.

European regulators have previously given the takeover the green light.

"Nevertheless we will continue to engage with the process as the Secretary of State reaches her final decision".

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