Competition Authority to Probe Fox-Sky Deal

U.K. Culture Secretary Karen Bradley is planning to refer the proposed merger between 21st Century Fox and Sky to the Competition and Markets Authority (CMA) for review.

Bradley said that she was minded to refer the merger to the CMA on the grounds of media plurality and broadcasting standards.

“Turning first to the question of media plurality, I can confirm that none of the representations received have persuaded me to change my position,” she said.

Regarding broadcasting standards, “I have taken careful account of all relevant representations and Ofcom’s advice and have, today—as required by the legislation—written to the parties to inform them I am now minded to refer the merger to the CMA on the grounds of genuine commitment to broadcasting standards,” she added.

Questions were raised about the threshold for referral. “The legal threshold for a reference to the CMA is low,” said Bradley. “I have the power to make a reference if I believe there is a risk—which is not purely fanciful—that the merger might operate against the specified public interests.”

One of the issues involves the lack of procedures for broadcast compliance in the U.K. for Fox News. The concern was raised in Ofcom’s public interest report: that Fox did not have adequate compliance procedures in place for the broadcast of Fox News in the U.K. and only took action to improve its approach to compliance after Ofcom expressed concerns. Ofcom has said that it considers this to raise “non-fanciful concerns” that they are not sufficiently serious to warrant referral. “I consider that these non-fanciful concerns do warrant further consideration,” Bradley said. “The fact that Fox belatedly established such procedures does not ease my concerns, nor does Fox’s compliance history.”

Concerns have also been raised about the potential “Foxification” of Fox-owned news outlets internationally. “On the evidence before me, I am not able to conclude that this raises non-fanciful concerns,” said Bradley. “However, I consider it important that entities which adopt controversial or partisan approaches to news and current affairs in other jurisdictions should, at the same time, have a genuine commitment to broadcasting standards here. These are matters the CMA may wish to consider in the event of a referral.”

Sky has said in a statement that it is “disappointed by this further delay and that the Secretary of State is now minded to refer the proposed acquisition to the CMA in relation to broadcasting standards despite Ofcom, as the independent broadcast regulator, maintaining its advice that there are not sufficient concerns to justify such a reference. Nevertheless, we will continue to engage with the process as the Secretary of State reaches her final decision.”