Culture Secretary Jeremy Hunt has delayed a decision to refer News Corporation‘s proposed takeover of BSkyB to the Competition Commission to enable him to consider ‘undertakings’which could clear the way for the deal to go ahead.
Hunt confirmed this morning that he intended to follow Ofcom’s advice and refer News Corp‘s £8bn bid to buy the 61 per cent BSkyB it does not already own to the Competition Commission.
The Culture Secretary said the proposed merger “may operate against the public interest in media plurality”; however, he would first consider undertakings from News Corp that “could sufficiently alleviate the concerns” before confirming the reference to the Commission.
The broadcast regulator Ofcom would then be asked, Hunt said, whether measures suggested by News Corp were sufficient to address its concerns over media plurality.
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Hunt said: “If this process produces undertakings in lieu which I believe will prevent or otherwise mitigate the merger from having effects adverse to the public interest, and which I propose to accept, I will then publish the undertakings in lieu and (as required under the Act) begin a formal 15-day consultation period during which time all interested parties will be able to express their views.”
An alliance of media businesses wrote jointly to the Government in October asking it to reject Rupert Murdoch’s attempt to take full control of BSkyB.
The chief executives of Telegraph Media Group, Trinity Mirror, Associated Newspapers, Guardian Media Group, Northcliffe Media, BT and Channel 4 and BBC director general Mark Thompson claimed a merger of the country’s biggest newspaper group, the Murdoch-owned News International, and Sky could harm media plurality
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Hunt said this morning he was unable to give a clear timetable of each of the steps that would now take place.
“My main concern is not to work to an arbitrary timetable but to ensure that I reach my decision in a fair and even-handed way which is transparent and ensures that all concerns are properly considered,” he said.
Hunt made his announcement this morning as he published Ofcom’s report on the public interest issues relating to the proposed acquisition of BSkyB that was sent to him on 31 December.
He has also published letters between his office, BSkyB and News Corp over the proposed deal and confirmed meeting with senior figures from News Corporation to discuss the deal.
“As a result of these meetings and my consideration of the Ofcom report and subsequent submissions from the parties involved I still intend to refer the merger to the Competition Commission,’Hunt said.
‘On the evidence available, I consider that it may be the case that the merger may operate against the public interest in media plurality…
“News Corporation says that it wishes me to consider undertakings in lieu which it contends could sufficiently alleviate the concerns I have such that I should accept the undertakings instead of making a reference.
“It is appropriate for me to consider such undertakings. In considering whether to accept undertakings in lieu, I will ask the Office of Fair Trading…to be involved in the process from this stage. I will also ask Ofcom for advice whether undertakings in lieu address the potential impact on media plurality.”
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 Corporation issued a statement this morning saying it continued to believe its proposed acquisition of the shares in BSkyB it does not own would not lead to there being insufficient plurality in news provision in the UK.
“The company has put forward extensive and detailed evidence that the level of plurality in the UK has increased since 2003 (when the Communications Act was enacted) – and since the ITV plurality review in 2007 when no concerns were found about the sufficiency of plurality,” News Corp said.
“News Corporation believes that Ofcom’s analysis is deficient in a number of ways.
“While Ofcom acknowledges that the combination of News Corporation and BSkyB would have a minimal impact on consumers and would not enhance News Corporation’s ability to influence the news agenda, it nevertheless concludes that the transaction may be expected to operate against the public interest.
“News Corporation has made a submission to the Department of Culture, Media and Sport setting out a number of issues with the Ofcom report.
“However, in the interests of progressing to a transaction, News Corporation has submitted an undertaking that we believe addresses Ofcom’s concerns.
“We will continue to engage constructively with the regulatory process.”
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