News Corporation has raised the prospect of a judicial review deciding the fate of BSkyB after labelling Ofcom’s report into its proposed takeover as “flawed” and one sided.
In its submission to Culture Secretary Jeremy Hunt, which had been made public today, News Corp said Ofcom’s report contained “fundamental flaws in analysis” and should not be relied on by the Secretary of State when making his decision on whether to approve the deal.
Rupert Murdoch’s business also criticised the administrative process leading to the publication of Ofcom’s report, saying it was ‘highly unfortunate’and that it had also been ‘seriously flawed”.
‘The initial decision to intervene in relation to this transaction on the basis of a public interest concern was taken by a Secretary of State for BIS who was biased against the interests of News [Corp] and its shareholders,’the company said in its submission.
Hunt only took on the responsibility of passing judgment over the News Corp deal after the Prime Minister stripped Business Secretary Vince Cable of those powers after reporters from the Daily Telegraph recorded Cable declaring that he had “declared war on Rupert Murdoch” in an undercover sting.
News Corp said it was still unclear to the extent this episode had ‘tainted the wider process’and said it had requested copies of relevant correspondence to establish if there was direct evidence.
In addition to the administrative problems, News Corp accused Ofcom of failing to approach the proposed transaction with an ‘open mind’and claimed it had carried out a review with the intention of identifying concerns.
The media giant’s complaint to the Government claimed Ofcom had been ‘notably more receptive to submissions made by third party complainants’than it had to its submissions and had ‘selectively omitted relevant evidence”.
Ofcom’s report, which was also made public today, ruled that News Corp’s proposed £8bn deal to take control of the 61 per cent of BSkyB it did not currently own could ‘operate against the public interest since there may not be a sufficient plurality of persons with control of media enterprises providing news and current affairs to UK-wide cross-media audiences”.
As such, the broadcast regulator suggested Hunt refer the matter to the Competition Commission for consideration.
New Corp said Ofcom’s report contained ‘serious errors in legal and analytical approach’which undermined the validity of its recommendation.
Any subsequent decision by Hunt to refer the deal based on the Ofcom report would also suffer from legal flaws, the company said.
‘There can be no presumption that rejecting its [Ofcom’s] recommendation for a reference to the CC, on the weight of evidence available to him [Hunt], would be unreasonable,’the letter stated.
‘On the contraryâ€¦the report provides no legitimate basis for a decision that the transaction should be reviewed by the CC in more detail.”
News Corp said it retained the option of seeking legal clarification on the matter should the deal either not go ahead or be referred to the Competition Commission.
‘Pending receipt of all relevant information and a further consideration of its position News reserves its rights as regards the possibility to challenge earlier steps in the administrative process and/or the Report by way of judicial review,’News Corp said.