Karen Bradley told the House of Commons that the £11.7 billion deal would be investigated over concerns relating to both media plurality and broadcasting standards. The process is likely to take six months.
In recent weeks paperwork has gone between the Department for Digital, Media, Culture and Sport and the regulator Ofcom as Ms Bradley sought clarification on a number of points. There have also been a number of high-profile representations to which she said there had been nothing to change her mind on referring the bid on grounds of media plurality to the CMA.
Of the representations Ms Bradley said around 30 of the 43,000 pieces of correspondence received were “substantive”, but a “significant majority were campaign-inspired, arguing against the merger going ahead, but generally without providing new or further evidence or commenting on Ofcom’s approach”.
One of the issues surrounded the compliance procedures for the broadcast of Fox News in the UK with action only taken after Ofcom expressed concerns. Subsequently, Sky dropped the carriage of the US news channel citing poor audience figures.
“The fact that Fox belatedly established such procedures does not ease my concerns, nor does Fox’s compliance history,” said Ms Bradley.
Corporate governance issues, although overlapping on broadcast standards, will be considered by the CMA.
In a statement, Fox said it had engaged with the regulatory process since the outset and would continue to do so: “The proposed acquisition was originally announced in December 2016 and was formally notified to the European Commission (starting the overall formal review process on March 3, 2017). We are surprised that after independent regulatory scrutiny and advice, and over four months to examine the case, the Secretary of State is still unable to form an opinion. We urge the Secretary of State to take a final decision quickly. We look forward to engaging with the CMA on their in-depth review as soon as possible.”
A spokesperson for Sky also expressed disappointment: “We are 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.”