19.04 Update: News Corp’s ownership of BSkyB, Sky Italia and Sky Deutschland will not have a significant effect on the European pay-TV market, according to the European Commission, which has given its approval to News Corp’s proposed acquisition of BSkyB.
In a statement the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
“I am confident that this merger will not weaken competition in the UK. The effects on media plurality are a matter for the UK authorities,” said Commission Vice-President and Commissioner for Competition Joaquin Almunia.
In a statement BSkyB said it welcomed the decision and would continue to co-operate with the UK regulatory process.
Despite clearing the European regulatory hurdle BSkyB must wait to hear whether the UK Government will take action on grounds of media plurality, a task given to Ofcom by the business secretary Vince Cable. The role of Cable has been called into question after the BBC obtained a recording made by two Daily Telegraph reporters posing as constituents. The business secretary is said to have told the reporters he had “declared war on Rupert Murdoch” and planned to block his efforts to take full control of BSkyB.
Although Cable has retained his post, Prime Minister David Cameron has ruled that matters involving BSkyB, and all responsibility for policy issues relating to media, broadcasting, digital and telecoms sectors, should in future be handled by the culture secretary Jeremy Hunt.
As part of its investigation the Commission studied whether the proposed transaction would either prevent or significantly limit access to pay-TV content. However, while finding market concerns over BSkyB’s existing deals with the six Hollywood majors, it concluded a BSkyB entirely in the hands of News Corp would do nothing to worsen the situation currently in existence. It also found nothing to indicate that News Corp’s full involvement in BSkyB would do anything to hamper the supply of movie and regular TV content to pay-basic channels. It found that News Corp would continue to have the incentive to acquire content from its competitors to have the most attractive retail packages.
Concerns over the newspaper and advertising sectors were also dismissed.