Wednesday 15 August 2018

Minister: Decision on Fox bid for Sky will not be based on emotion

Karen Bradley said she will come to her conclusion based on findings from the Competition and Markets Authority’s investigation.

Sky takeover
Sky takeover

By Holly Williams and Kalyeena Makortoff, Press Association

The decision on whether to approve 21st Century Fox’s £11.7 billion takeover bid for Sky will be based on evidence and not “personal emotion or feelings”, the Culture Secretary has told MPs.

In a hearing with the Digital, Culture, Media and Sport Committee, Karen Bradley said while she will have the final decision on whether the deal can go through, she will come to her conclusion based on findings from the Competition and Markets Authority’s (CMA) six-month investigation.

Karen Bradley

She said: “The final decision is the decision of the Secretary of State – it is based on evidence.

“It is not based on personal emotion or feelings or views about the people involved.”

She added: “I have to be mindful of the fact there’s two parties who would like to merge for good commercial reasons, while at the same time… ensuring the public interest tests are met to make sure we end up with a media that works for the country.”

The hearing comes a day after the CMA outlined the scope of its wide-ranging investigation into Rupert Murdoch’s bid to buy the 61% of Sky Fox does not already own.

Ms Bradley referred Fox’s proposed takeover of Sky to the CMA for a full inquiry earlier this year after a three-month investigation by Ofcom.

While Ofcom raised concerns over media plurality, it found there was no reason to block the takeover bid on the grounds of broadcasting standards.

But the CMA confirmed its investigation would focus on both media plurality and broadcasting standards.

In the Commons committee hearing, Ms Bradley explained why she changed her mind on whether to refer the deal to the CMA.

At first, she was considering recommending a CMA review based on public interest and media plurality, but not on commitment to broadcasting standards, as Ofcom had been “unequivocal” in its advice that there were no grounds to do so.

“But Ofcom also recommended that there were undertakings in lieu that would mitigate media plurality concerns, and I didn’t accept them because they were behavioural, not structural,” she said.

She also said there were concerns that Ofcom’s threshold for referring a deal such as the Sky/Fox merger to the CMA may have been too high.

By applying a lower threshold, Ms Bradley said it became more likely that an investigation was required.

But she said “the legal advice I received was that that lower threshold did give cause for concern”.

Ofcom boss Sharon White gave evidence to the committee on Tuesday, when she told MPs the regulator found “extremely disturbing” behaviour at Fox News when looking at the bid.

She said the body found “significant corporate governance failures” at Fox News, but decided Sky would continue to be a fit and proper broadcaster despite the situation at Fox News.

One MP questioned why the CMA would be more qualified to investigate the deal on broadcasting standards than Ofcom.

Ms Bradley said: “Let’s wait and see what the report holds. I felt there was sufficient uncertainty based on the Ofcom report that I wanted to make sure we’d explored this as thoroughly as possible.”

The CMA confirmed on Tuesday that in terms of broadcasting standards, it will look at whether the merged group would have a “genuine commitment” to this – including consideration of their track record.

Corporate governance and the treatment of employees in the UK and overseas will come under the scope of the probe.

Press Association

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