UK competition watchdog: Fox's takeover of Sky would be 'against the public interest'

BEVERLY HILLS, CA – MARCH 11: Lachlan Murdoch, Rupert Murdoch and James Murdoch attend The Television Academy’s 23rd Hall Of Fame Induction Gala at Regent Beverly Wilshire Hotel on March 11, 2014 in Beverly Hills, California. (Photo by Jason Kempin/Getty Images)

  • 21st Century Fox announced plans to take over Sky in 2016. The deal was referred to the UK Competition and Markets Authority (CMA) last September.
  • CMA said Tuesday the deal is “against the public interest” as it would give the Murdoch family too much control over UK media.

LONDON – The UK’s Competition and Markets Authority (CMA) has raised concerns about Sky’s planned takeover by 21st Century Fox, saying the deal would give media mogul Rupert Murdoch and his family too much control over the UK news media.

The CMA said in a statement on Tuesday that it believes the deal would be “against the public interest” because there needs to “be a sufficient plurality of persons with control of the media.” Rupert Murdoch is a majority shareholder of both Sky and 21st Century Fox and a merger would centralise his control.

The watchdog is concerned that the deal could “reduce the diversity of viewpoints available to and consumed by members of the public.”

“The specific concern is that the Transaction might reduce the independence of Sky’s news and current affairs content on Sky News, and this, in turn, could lead to a reduction in the diversity of viewpoints across the news and current affairs offerings operated by the media 6 enterprises controlled by the MFT [Murdoch Family Trust], including Sky News, The Sun, The Sun on Sunday, The Times, and The Sunday Times,” the CMA wrote.

“The Transaction might make it more likely that Sky News and the newspapers owned by News Corp could take a similar approach on specific topics or issues, push certain stories, or downplay others. These concerns do not rely on full editorial alignment, but rather the potential for increased editorial alignment.”

The CMA notes that the Murdoch family already have significant sway when it comes to influencing public debate in the UK.

“In addition to this perception of influence, we have noted that members of the Murdoch family and representatives of News Corp have met with government ministers significantly more frequently than other newspapers owners over the past two and a half years,” the report said.

Sky and Fox’s response

Sky acknowledged the verdict in a brief statement on Tuesday morning, saying it would look at the CMA’s recommendations.

Fox said in a statement: “We welcome the CMA’s provisional finding that the Company has a genuine commitment to broadcasting standards and the transaction would not be against the public interest in this respect.

“Regarding plurality, we are disappointed by the CMA’s provisional findings. We will continue to engage with the CMA ahead of the publication of the final report in May.”

Fox is already a minority shareholder of Sky and the US company announced plans for a full takeover in December 2016. The deal was referred to the CMA in September last year for review. Sky has already threatened to close down Sky News to force through the merger.

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