UK Government Urged To Refer Fox’s Proposed Sky Takeover To Ofcom

Members of British Parliament raised concerns about 21st Century Fox’s proposed takeover of pay-TV operator Sky on Monday during an urgent question debate which was tabled by shadow culture, media and sport spokesman Kevin Brannan.

Questions of plurality laws were raised and the government was called upon to ensure that the deal does not go ahead unchallenged and should be “properly and independently scrutinized.”

Rupert Murdoch-owned Fox said on Friday that it had struck a preliminary deal worth £11.2B ($24.2M) to buy the 61% of Sky that it does not already own, a deal which would see Murdoch take full ownership of what will be the UK’s largest media company. He already controls the Times and Sun newspapers through News Corp.

A report from Reuters on Monday said that Fox could table a firm cash bid for Sky as early as Wednesday, indicating that the two companies have agreed to press ahead with a court-approved agreement used in friendly takeovers in the UK, which would require just 75% approval from shareholders rather than 90% through a straight takeover.

Murdoch’s earlier approach for Sky in 2011 was rejected when his UK newspaper business was hit by a phone-hacking scandal, a point that government ministers were urged to remember during the debate on Monday.

Speaking in Parliament, Brannan noted that the concerns raised five years ago “were not only about the serious wrongdoing that was being uncovered during the phone-hacking scandal, but they were also about the concentration of media power and media ownership in fewer and fewer hands.”

He added: “Nowhere does it say we should sit quietly for five years and come back again when we’ve all forgotten about it. We haven’t forgotten about it.”

Culture minister Karen Bradley was expected to field questions on the issue but was absent and digital and culture minister Matt Hancock stepped in, repeating throughout the session that a formal notification had not been received by the parties and when it was received, Bradley would have 10 days to decide whether to issue a public intervention notice.

Media regulator Ofcom could then carry out a public interest test on the takeover offer. In 2012, when carrying out a fit and proper person test, Ofcom’s assessment of Fox CEO James Murdoch indicated that he repeatedly fell short of exercising the responsibility that was expected of him.

“The only thing that really matters in this is the public interest,” said MP Chris Bryant, an opposition Labor Party lawmaker and former shadow culture secretary. “When we had a period where one man had control of 40% of the newspapers in this country — the largest daily newspaper, the largest Sunday newspaper and the largest broadcaster by far in value in this country –, that poisoned the well of British politics. So I urge government ministers that as they go through this process in the quasi-judicial manner that they suggest that they keep that very close to the front of their mind.”

Former Labor leader Ed Milliband added: “Compared to five years ago when the House passed a motion unanimously that [Murdoch’s] bid shouldn’t go a head, we still have issues of phone hacking unresolved in the courts and we still have a system of self-regulation that has not satisfied the victims of phone-hacking. What has really changed since the House passed the motion five years ago? In my view, very little. That is why I believe this bid should be rejected.”

Vince Cable, a politician with the Liberal Democrat Party who handled Murdoch’s previous attempt to to takeover Sky five years ago when he was the government’s business secretary, has said the the Fox/Sky takeover would not be in the public interest.

According to BBC and Reuters reports he said: “This is yet again a threat to media plurality, choice, just as it was six years ago when I referred this to the competition authorities and it should be investigated. The ownership of the media, whether you’re looking at press, radio, television is very highly concentrated and this makes it even more concentrated.”

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